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  1. #1
    Master of Fundamentalism
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    Default Question about where money goes if a church closes and is sold

    My hubby brought this question up over dinner and I thought it was a good one. Your answers appreciated.

    Here's the scenario: ABC Baptist Church has been in existence for 100+ years. Over the course of time due to various factors (urbanization or suburbanization, more church choices, etc) , the membership dwindles down to 5 or 6 families. The decision is made to sell the church and the land.

    Who gets the money from the sale of the property? In the case of a denominational church such as an AOG or SBC, it stands to reason that the money would go to the denomination. What about in the case of an independent church (such as IFB)? Thanks!

  2. #2
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    Quote Originally Posted by Podunk View Post
    My hubby brought this question up over dinner and I thought it was a good one. Your answers appreciated.

    Here's the scenario: ABC Baptist Church has been in existence for 100+ years. Over the course of time due to various factors (urbanization or suburbanization, more church choices, etc) , the membership dwindles down to 5 or 6 families. The decision is made to sell the church and the land.

    Who gets the money from the sale of the property? In the case of a denominational church such as an AOG or SBC, it stands to reason that the money would go to the denomination. What about in the case of an independent church (such as IFB)? Thanks!
    It's supposed to go to another 401c3 organization I think.
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  3. #3
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    Quote Originally Posted by Podunk View Post
    My hubby brought this question up over dinner and I thought it was a good one. Your answers appreciated.

    Here's the scenario: ABC Baptist Church has been in existence for 100+ years. Over the course of time due to various factors (urbanization or suburbanization, more church choices, etc) , the membership dwindles down to 5 or 6 families. The decision is made to sell the church and the land.

    Who gets the money from the sale of the property? In the case of a denominational church such as an AOG or SBC, it stands to reason that the money would go to the denomination. What about in the case of an independent church (such as IFB)? Thanks!
    Sometimes the membership votes to donate the money to the building program of the church that they end up in. That happened in the Birmingham area in one case that I know of, when an urban church closed down.

    In another case, a Southern Baptist Church in Bham deeded their church property to an urban population who took over the church building.

    I think the membership COULD vote to give any funds left to the SBC, but the SBC churches are independent also, in that sense, so the remaining membership decides what happens to the money.

  4. #4
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    Check your bylaws

    Ours state that the property is to be sold and the funds given to like-minded organizations, 503(?) maybe.
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  5. #5
    Master of Fundamentalism
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    It is handled according to the dissolution article in the church's constitution and bylaws. While that can vary some- MANY have the assets liquidated, debts (including any legal fees) settled, and the balance distributed among ministries of like faith as determined by the named trustees.

  6. #6
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    Most churches have a "dissolution" clause that mandates NO ONE in the congregation get a penny (since it was a non-profit organization) and usually to go to a group of "like faith and practice".

    Some conventions and state organizations actually own the deed and have control of the building/lot. The church "uses" it all the time but ownership is retained by the convention. This was very true in the Northern Baptist Convention (now American) and when churches in the 50's and 60's tried to withdraw from the liberal convention, they were taken to court.

    I pastored near Waupaca, Wisconsin, the site of a large court fight. Baptist polity of local church autonomy and control of the majority of voting members saved the building for the conservatives leaving the convention. First Baptist in Normal, Illinois, was lost the same year.
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  7. #7
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    Check your by-laws, but I have seen the money split with current members in a recent situation. It is sad not matter what.

  8. #8
    Master of Fundamentalism
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    Hey, thanks all for your replies thus far. We were just wondering...purely hypothetical question and we certainly hope and pray no church from here on out ever has to close its doors!

  9. #9
    Master of Fundamentalism
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    Quote Originally Posted by Podunk View Post
    My hubby brought this question up over dinner and I thought it was a good one. Your answers appreciated.

    Here's the scenario: ABC Baptist Church has been in existence for 100+ years. Over the course of time due to various factors (urbanization or suburbanization, more church choices, etc) , the membership dwindles down to 5 or 6 families. The decision is made to sell the church and the land.

    Who gets the money from the sale of the property? In the case of a denominational church such as an AOG or SBC, it stands to reason that the money would go to the denomination. What about in the case of an independent church (such as IFB)? Thanks!
    According to the IRS "net earnings may not inure to the benefit of any
    private individual or shareholder" as is the case for 501(c)(3) organizations. This quote was copied from www.irs.gov/pub/irs-pdf/p1828.pdf, page 3. Any church or other nonprofit that splits the money apears to be in violation of the nonprofit IRS rules. Hope this helps.
    Last edited by Chip's Wife; 08-03-2008 at 06:20 PM. Reason: clarification

  10. #10
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    What should happen and what does happen can be two different things. I was a member of a church where the pastor decided that there did not need to be deacons and his wife handled all the church business. When members of the church objected, he accused them of gossip, (the circumstances of which I know for a fact were a lie) then he said they should leave the church. This left the church with just a few very young, unlearned families.

    After a year or so, those left saw that he was unbiblical, (one man even apologized to former members for his part in the debacle) and they began to leave. About three years down the road, all that was left was the Pastor and his sons family. They had a parsonage, a church building and property and only themselves as congregation. In fact, they are still operating this way. If you drive by, you will see that he has pulled his car up to the front of the church and his son drives from his house next to the church so they have at least two cars out front.

    If he chose to move, he could just sell the property and pocket the money.
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    All things presented in the above message are MHO. Thus, even though they probably are right, you have the right to respectfully disagree with me.

 

 
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