Black Bankers President Warns Churches: 'Change the Way You Do Business'
Hazel Trice Edney | , Special to Informer | 6/17/2012, 8:16 p.m.
WASHINGTON - (TriceEdneyWire.com) - The head of a national Black bankers organization is warning that growing foreclosures upon churches across America indicate that houses of worship must quickly change the way they do business or possibly face a national crisis.
"A trend in church foreclosures is causing national leaders representing African-American communities all over America to focus their attention on potential solutions to avert an impending crisis," writes Michael Grant, president of the National Bankers Association in a three-page report, released exclusively to the Trice Edney News Wire. "With the advent of the mega-church as a phenomenon, church leaders are being forced to rethink their growth strategies."
At least 138 church properties were sold by banks last year and about 270 around the nation since 2010, according to CoStar, a Washington, D.C.-based real estate information company. Ninety percent of the sales reportedly result from foreclosure.
On March 6, Reuters reported, "Banks are foreclosing on America's churches in record numbers as lenders increasingly lose patience with religious facilities that have defaulted on their mortgages, according to new data...The surge in church foreclosures represents a new wave of distressed property seizures triggered by the 2008 financial crash, analysts say, with many banks no longer willing to grant struggling religious organizations forbearance."
According to Grant, whose organization has a membership of 37 banks, he sees no major disparity between the numbers of foreclosures upon Black and White congregations. However, he writes, "A preliminary analysis of many African-American churches that pursued aggressive expansion strategies has yielded a few interesting and common patterns."
He ticks off the patterns as follows:
*Expansion efforts were not usually directed by financial plans constructed by individuals who had the expertise to give church leaders sound financial advice.
*Many financial decisions by those who oversee aggressive expansion strategies were not rooted in frugal planning or monitored by systems of accountability.
*Record-keeping is often not dictated by accepted accounting practices.
*Lending institutions are oftentimes not contacted early enough to avail the church of bank assistance in the forms of loan modifications or forbearance.
*Many church leaders mistakenly believe that bank assistance is available after foreclosure procedures have begun. In reality, by the time the church is being foreclosed on, the bank has exhausted all of the remedies at its disposal.
Grant concludes that though many church decisions are made based on faith and visionary leadership, "The church must be thought of as a business."
He states, "Just as the hospital exists to promote physical health and wellness, it is nonetheless a business. The church's business is to promote spiritual health and well-being. It is also a business. If sound business principles are not adhered to, the church jeopardizes its ability to provide a valuable benefit to its congregants."
Church leaders across the nation are being impacted by the economic crisis, not only causing a shortage in the collection plate, but the decreased ability to help parishioners in financial trouble and difficulty paying its own bills, including staff salaries and mortgages. Though small and middle-sized congregations are seeing more foreclosures, even mega-churches have not been exempt from drastic measures.