I’m often asked, “Is it okay for a church to be in debt?” And if so, “How much?”

In most cases, they’re really asking about the prudence of taking on a mortgage to build a campus or expand facilities.

I’m always surprised how many lay-leaders and church boards think the correct answer is, “Absolutely not!

Ironically, most of these same folks have a mortgage on their own home. But they think the church is different. It should be debt free. At all costs. They equate taking on debt with a lack of faith and trust in God’s provision.

But I’ve found that rigid rules and policies against debt are usually far more harmful than helpful. They’re neither prudent nor biblical. They’re simply idealistic. And though usually well-intended, they are far more likely to bring a growing ministry to a screeching halt than to bring it to new levels of faith and trust in God’s provision.

For instance, I watched one large and land-locked church in the Northeast with a rigid cash-only policy spend a decade trying to raise enough money to build a much needed parking structure. While they waited for all the money to come in, their parking remained woefully inadequate. Not surprisingly, attendance plateaued.

Within a few years, the plateau turned into a decline. The congregation shrunk back to a size that perfectly fit its parking capacity. That in turn led to cut backs in staffing and programing, which led to the loss of even more people. It was a slow death spiral for what had once been a high flying church.

Yet, ironically, as the church’s attendance nose-dived, the parking fund continued to grow. It eventually reached millions of dollars. But it still wasn’t enough to fully fund the new parking garage. So the church ended up with a large stash of cash, but no money for ministry.

Oddly, the leadership of this same church was willing to lease a building in a strip mall down the street to house a new thrift shop and community outreach center.

In other words, they had no qualms about paying someone else’s mortgage (plus the landlord’s built-in profit), but they wouldn’t take on or pay a mortgage of their own.

I found that quite strange. And fiscally irresponsible.

Whenever a rigid aversion to debt results in overflow rooms, weird service times, stacked parking, and other things that tell visitors, “We are too full for you,” you’ve unintentionally put up a “No Room In The Inn” sign. And the word on the street will soon become, “Don’t bother to go there, they don’t have any room for you.”

But worst of all, as the church in the story above found out, much to its dismay, by the time all the money was raised and the structure built, it was too late. No one was pounding on the door anymore. The people who had once tried so hard to get in had stopped trying. They’d either given up in their search for God or found another church with a sign that said, “Welcome. We have room for you.”

The church ended up with a nice parking garage, but nobody to park in it.

I’m pretty sure that’s not what they, or God, had in mind.

What do you think?


  1. JohnF on August 13, 2012 at 6:05 pm

    A sincere question coming from a pastor of a church: Does your church sponsor Dave Ramsey’s Financial Peace University? If so, does your church follow the 15-year mortgage recommendation? The reason I ask is we are helping in our church get out of debt and I’m thinking ahead how I would explain a church getting into debt at the same time.

  2. Larry Osborne on August 13, 2012 at 6:11 pm

    Yes, we offer the Dave Ramsey courses. But no, we don’t follow his 15 year recommendation. Instead, we aim to keep any church debt at an amount equal to or below what we would pay if we were leasing comparable property (as we did when we started out).

    As an individual, I want to leave an inheritance to my children’s children – so having low or no debt is a personal priority (Proverbs 13:22).

    As a church, I don’t want to sit on a pile of equity, I want to put that money to work for the kingdom (Matthew 25:24-27).

  3. Pastor Lester Zimmerman on August 17, 2012 at 11:33 am

    I agree. We have followed this pattern at our church. How do I contact you for a possible speaking engagement at our annual leaders conference?

    • Larry Osborne on August 17, 2012 at 7:42 pm

      Just contact my assistant: [email protected] – She will send you a speaking request form as she is the one who books all of my speaking and consulting.

  4. I really like your thinking on this topic of debt. If my church stood on the “only pay cash” principle, there would be a lot fewer names in the Lamb’s Book of Life right now. Yes, you have to make room for them or they won’t come. We had Thom Rainer http://www.thomrainer.com evaluate our church’s health some years back and one of his strongest recommendations to us was to add more parking to make room for new people. We had to incur debt to make that happen but it truly was God’s design for how to go about making the needs become reality.

    On a side note, I haven’t visited your site in over a year. A co-worker at my church, one of our pastors, just mentioned your “Sticky Church” book which reminded me of your website and how much I have gleaned from it over the years, so I’m back!!!! You are an amazing teacher! Keep up the good work!!!

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