Daily Observations - Religious Organizations Con't

Last night we discussed the basics of funding a religious organization. Tonight I will go into more detail about the organizational structure.

Since we are dealing with a non-profit organization, the first thing we have to see is the bylaws and the organizational documentation of the organization. Each non-profit has filed articles of incorporation with the State in which they are formed. The articles of incorporation will spell out with significant detail who has the right to make any decisions regarding any expenditure of funds.

In addition to the articles of incorporation, the organizations by-laws and charter will then specify exactly how the voting rights of the organization are established. For example can one person make a decision that binds the organization or does the vote have to go to the entire membership. All these are very important questions that you as their financial broker must understand and be able to discuss thoroughly with them.

The funding of a loan is a very expensive proposition because usually the loan is needed to either acquire a piece of property, a building or to refinance an existing debt. Getting working capital is almost impossible. So therefore each obligation undertaken must be significant.

The next area that must be understood is that of the membership. Who makes up the membership of the organization, how long has the organization been in existence, is the membership growing or declining, and is there a significant portion of the membership that makes up most of the donations or are the donations spread around equally among the members. These are only a few of the questions that you will have to raise and be comfortable asking as well as getting the answers to.

Tomorrow night we will continue with more areas to examine.