Loan Funds and Synagogue Buildings
Wouldn’t it be great if there were a central address for loans to synagogues?
There are some organizations in communities like a Hebrew Free Loan Society, or a program of a local Jewish Vocational Service or Jewish Family Service that provide emergency loans to individuals. In this case, I am talking about a place to turn to when the synagogue is in need of financing for a major capital project.
Your capital campaign is complete or near complete and you are in need of a construction loan to break ground.
The building project has just been completed and you need to turn the construction loan into a mortgage that ideally coincides with the 5-year payout schedule of all contributors.
Both the Union for Reform Judaism and the Jewish Reconstructionist Movement offer loans to synagogues. At the URJ, such a loan is geared to congregations with 250 or fewer members. It is described as low interest and for up to $50,000. It can be used for a building construction project or even to provide the seed funding for the hiring of a rabbi.
Loans for Reconstructionist synagogues are for up to $20,000 and are interest free and also can be used for a wide range of uses.
This is great, but what about the big projects? Seven figure projects to renovate the building or purchase a new one. Several Church denominations have affiliated loan funds that offer financing. And there are other organizations that specifically focus on church financing. It seems that more often not synagogue are turning to local community banks. Rates are of course somewhat low now. But I have heard of occasions when banks required a congregant, or congregants to guarantee the synagogue’s loan.
I have often thought it would be great to have a “Synagogue Credit Union”. Its mission would be to provide full banking functions for congregants and synagogues alike. Such a credit union would be the go to source for synagogue financing.
One other thing that I found fascinating about the Episcopal Church Building Fund is how their mission of the Fund has evolved. No longer is it just about making loans. Helping leaders of distressed churches address the complex issues around what to do with empty and underutilized buildings has also become a primary focus of the Fund.
We think that synagogues have challenges? For the past decade, 4-5 Episcopal churches have been closing their doors each month. The fund has brought together neighboring Episcopal churches in close proximity to discuss a possible merger, and asked the tough questions of church leaders to begin to think about what to do with their assets should the closing of the church be the most viable option.
Churches throughout the country are facing similar challenges as synagogues in terms of membership and filling the pews on Sundays.
Just so we synagogue leaders shouldn’t feel alone out there.