1 of 16

Fueling Church Mission Through Smart Financial Tools

Mike Kocolowski, Chief Stewardship Officer

Christian Financial Resources

2 of 16

Fueling Church Mission Through Smart Financial Tools

Disclaimer: CFR and Mike Kocolowski do not offer tax or investment advice. Please talk with your tax advisor and/or financial advisor about your unique situation.

Reminder: Everything is a stewardship decision! (You’re managing resources and life!)

3 of 16

Fueling Church Mission Through Smart Financial Tools

Legal Stuff: Please note that this is neither an offer to sell nor a solicitation of an offer to buy Christian Financial Resources securities. Such an offer is made by an Offering Circular and only in those states where Christian Financial Resources securities may lawfully be offered or sold.

Christian Financial Resources securities are subject to certain risk factors as described in the Offering Circular and are not F.D.I.C. or S.I.P.C. insured nor are they bank deposits.

4 of 16

Fueling Church Mission Through Smart Financial Tools

Borrowing Sensibly
Investing Strategically
Giving Wisely

Our B.I.G. Topics

5 of 16

Borrow Sensibly

Warnings

Realities

Recommendations

Warnings:

Borrowing creates obligation and loss of freedom.

Proverbs 22:7— “The rich rule over the poor, and the borrower is slave to the lender.” (NIV)

Borrowing makes presumptions (some evidence) and assumptions (no evidence) about the future.

James 14:13-14— “Now listen, you who say, “Today or tomorrow we will go to this or that city, spend a year there, carry on business and make money.”

Why, you do not even know what will happen tomorrow. What is your life? You are a mist that appears for a little while and then vanishes.” (NIV)

Realities:

Most people need to borrow money to buy their first house…and most growing churches need to borrow money (at some point) to expand their ministry.

NOTE: If you have a personal conviction that you should never borrow money, then don’t do it. But don’t hold other people accountable to YOUR convictions that are not clear Biblical mandates. (Trouble)

Recommendations:

To the Borrower: Be Careful & Responsible

Psalm 37:21— “The wicked borrow and do not repay, but the righteous give generously…” (NIV)

Faith versus Foolishness (or empire building)

To the Lender: Be Wise and Reasonable

Evaluate the loan request comprehensively

Don’t create a burden by lending too much

Don’t exploit or take advantage of the poor or vulnerable

Exodus 22:25— “If you lend money to my people, to any of the down-and-out among you, don’t come down hard on them and gouge them with interest.” (MSG)

6 of 16

What Matters to Lenders

Loan to Value
Debt Service Ratio
Income/Expense Ratio
Weeks of Cash on Hand
Giving Concentration
Giving Trajectory

Purpose of the loan
Pastors/Leaders
Trends
History
Growth Potential
Capital Campaign

Qualitative Factors

Quantitative Factors

QUANTITATIVE FACTORS

1. Loan to Value

A lower number means more equity (50% is better than 90%)

“It’s worth $1,000,000 but we’re only paying $500,000…can’t the equity be our downpayment?”

Asset lending versus cash flow lending

“Our property is appraised at $2,000,000, why can’t we borrow $500,000?”

2. Debt Service Ratio

What’s ideal?

What’s reasonable?

3. Income/Expense Ratio

Where are the dollars coming from?

Tithes & offerings

Designated giving

Missions

Special offerings

Campaign

Lease income

Other

4. Weeks of Cash on Hand

If giving stopped completely, when would you run out of money? (COVID, Hurricane, Blizzard, Flood, etc.)

5. Giving Concentration

The Pareto principle (80/20 rule)

What would happen if your top 1% or 2% of givers left? Example:1% (18 families) gave about 26% of the total income.

Widespread giving versus concentrated giving

6. Giving Trajectory

What do the last several years look like? Is there drastic change?

Decreasing

Flat

Increasing

QUALITATIVE FACTORS

1. Purpose of the loan?

Refinance current loan

Financial distress

Church split

Poor financial management

Uninsured loss

Unexpected event

Deferred maintenance

Leaking roof

Aging HVAC system

Building renovation

Vacant land

Multisite campus

New space

First permanent facility

2. Pastor/Leaders

Who are the people leading, guiding, and making decisions

Tenure

Experience

Debt philosophy

Spiritual maturity

Leadership ability

3. Trends/History/Growth Potential

T-What are the church attendance trends?

T-What are the population trends?

H-What loans has the church taken out in the past?

GP-Where are the facilities?

In the middle of nowhere or in a growing community?

GP-Church’s assumptions about growth

It’s always a multivariable equation!

4. Capital Campaign

Is the church going to begin a capital campaign or generosity initiative?

“I said I’d never do another campaign”

What is the history of past capital campaigns?

7 of 16

What Should Matter to Churches

Missional Alignment

Trusted Track Record

Flexible and Creative Solutions

8 of 16

Questions & Discussion

9 of 16

Invest Strategically

How much should a church keep in reserves?

Where should a church keep those dollars?

When expenses exceed income…

CONCERN
WATCH
WARNING
EMERGENCY

How much should a church keep in reserves?

There might be varying opinions here, but most Financial Advisors will recommend to you personally to keep a minimum of 3-6 months in an emergency fund (White paper)

Joseph stockpiled grain for the coming famine (Genesis 41:49)

The Proverb ant stored and harvested provisions (Proverbs 6:8)

David had silver and gold tucked away (1 Chronicles 29:3)

Where should a church keep those dollars?

Under a mattress? Invested in the stock market or cryptocurrency?

Real estate speculation?

Secular institution?

There are millions of dollars sitting in secular institutions that could be leverage for the Kingdom if you kept them at an organiztion that was funding ministry. (Like CFR)

Account for Short-term needs: we recommend your bank checking account (for 2 months of operating expenses) and beyond that keep in some kind of Savings account.

Long-term needs: time certificate….lock in for longer duration for a higher rate

When expenses exceed income…

4 categories to cover

CONCERN: Yellow Flag: 3 months operating expenses

WATCH: Orange Flag: <3 months of operating expenses

WARNING: Red Flag<1 month of operating expenses

EMERGENCY: White Flag< 2 weeks of operating expenses

If things gets worse than that you wave the Checkered Flag, because you’re finished.

10 of 16

Questions & Discussion

11 of 16

Give Wisely…and Generously!

Ephesians 5:15-16a

Proverbs 11:25

Acts 20:35

Audience Survey

12 of 16

Give Wisely

What is a Giving Fund (Donor-Advised Fund) and how does it work?

Growing in popularity

AI Summary: Over the past decade, donor-advised funds have grown from a modest giving tool into a $300+ billion philanthropic powerhouse, with assets more than tripling, contributions quadrupling, and millions of new accounts created.

What is a Giving Fund (Donor-Advised Fund) and how does it work?

The IRS defines it “as a separately identified fund or account that is maintained and operated by a 501(c)(3) organization, which is called a sponsoring organization.”

Think of it like a “Charity Checking Account”

Growing in Popularity-QUOTE

Donor-advised funds are one of the fastest-growing charitable giving vehicles in the United States, growing in popularity due to the flexibility and ease with which they streamline donors’ giving.” (Giving USA Special Report, Spring 2018: “The Data on Donor-Advised Funds: New Insights you need to know.

AI Summary of what’s been happening: Over the past decade, donor-advised funds have grown from a modest giving tool into a $300+ billion philanthropic powerhouse, with assets more than tripling, contributions quadrupling, and millions of new accounts created.

13 of 16

Advantages of Giving Funds

Simplifies Giving
Tax-Smart
Give Anonymously
Maximum Kingdom Impact
Leave a Legacy

Is a Giving Fund Right For You?

What About a Church Giving Fund?

Give Wisely

Advantages of Giving Funds

Simplifies Giving

I know people who concentrate almost all their giving on their home church. And I have friends who in addition to that support a variety of other ministries. They spread their giving out to five or ten or more charities. Some of them are local, maybe a food bank or homeless shelter, or sports program or something that supports the community. And some people are very interested in international missions or theological training. So, the number of charities can add up.

One major benefit of a GF is Streamlined recordkeeping. With a giving fund, you get one tax receipt at the end of each year. So, you don’t have the hassle of tracking and waiting for multiple receipts from every single organization to which you give. This feature can save a lot of time and frustration, especially when you give to a large number of different charities.

Tax-Smart

Opportunity for tax savings. Since the Tax Cut and Jobs Act took effect in 2018 and the standard deduction increased, most Americans are unable to itemize and claim a charitable contribution deduction on their taxes. ($2K for 2026). One creative strategy used by givers is called “batching” or “bunching”, where essentially you itemize every other year. This can be accomplished when you increase your charitable deductions by “frontloading” all your giving for the next two years (or more) in the current calendar year. You simply place the assets you’re planning to give away over two years in a giving fund this year, usually in a lump sum, then distribute your giving through grant recommendations over the course of the next two years (or any period of time, really).

Here's another way you might be able to save on your taxes. If you’ve owned equities for a long time, chances are very good that they have appreciated in value. Now, some people only own stocks inside their 401k or 403b or IRA, and that doesn’t count for these purposes. It has to be outside of your retirement accounts.

A huge tax saving strategy comes from giving appreciated stocks, or other appreciated assets, by transferring them directly to your giving fund. When you do this, you can avoid any capital gains taxes you would have been liable for, so this can be a massive benefit. At CFR we like to say “Friends don’t let friends give cash (Unless that’s all they have)”

Give Anonymously

You can Give anonymously with a giving fund. You simply indicate this desire when you make any particular grant recommendation. Now, You’re likely not always going to choose this method, but occasionally you might want to do so. Suppose you feel led to support a cause on a one-time basis and you don’t want that charity to know who you are. Because if they know your identity, they will spend time and money encouraging you to give another gift and you don’t want them to use their resources to do that. Or you may just truly wish to remain anonymous for other personal reasons. You have that option to do so with our giving funds. (One of our giving fund account holders gave $3M)

Maximum Kingdom Impact

Money at CFR loaned out

No management fee

Leave a Legacy

You know, it’s easy to overlook the influence we can have on our posterity when it comes to generosity, so it’s a good thing to think about from time to time. A giving fund is a helpful tool you can leverage to create a legacy of generosity. You can help inspire the next generation of givers in your family by involving your children or grandchildren. I’m actually personally very excited about this feature. We four children and seven grandkids.

We started something new a few years ago at Thanksgiving, because we wanted to do something different. So, we involved our adult kids and their families in our own charitable giving conversations. We told each family they would have a certain amount of dollars to give away from our CFR giving fund, to the charity of their choice. The only stipulation was they had to share why they selected the particular charity they chose, and what they hoped would be the outcome of their donation. My older grandkids got very excited. Hopefully, this will be one small step in their own personal giving journeys, and those little ones begin to learn the importance of generosity in their lives.

A Giving Fund may be right for you personally if…

7 reason why

You support multiple charitable organizations.
You ever want to give anonymously.
You want to simplify your year-end tax preparation (and who doesn’t).
You would be able to itemize on your taxes by using the bunching strategy.
You would like to give more to your favorite charities.
You own appreciated stock outside of a qualified retirement plan.
You want to create a legacy of generosity and involve your children and grandchildren in your giving.

Giving Funds for Churches

A way to accept stock and crypto gifts

Missions giving

Can grant the funds back to the church

14 of 16

Give Wisely: Age Has Its Benefits (QCD)

Qualified Charitable Distribution (QCD) out of an IRA

Those age 70.5 or older

Up to $111,000 in 2026 (per individual)

Have check directly sent to charity from your IRA

Does not count as income (nor do you get deduction)

Can count as your Required Minimum Distribution (RMD)

If you are over 70.5 with IRA give QCD before money out of bank account or cash

15 of 16

Fueling Church Mission Through Smart Financial Tools�

Mike Kocolowski

Chief Stewardship Officer

mike@cfrministry.org

Christian Financial Resources

CFRMINISTRY.ORG

Questions & Discussion

1 of 16

2 of 16

3 of 16

4 of 16

5 of 16

6 of 16

7 of 16

8 of 16

9 of 16

10 of 16

11 of 16

12 of 16

13 of 16

14 of 16

15 of 16

16 of 16