The Debt

The following is the story of how Harvest Bible Chapel went from being a church flush with equity to a church burdened by approximately $65 million of debt (please see The Documents for all supporting materials).

In 2003, Harvest Bible Chapel was a flourishing, single-site church located in Rolling Meadows, Illinois.  At that time, Harvest had been in their facility for eight years, and according to the leadership of the church, their mortgage was nearly paid off, as they had built up approximately $10 million in equity in the property.

Unfortunately, by February of 2003, things were beginning to change.  With the limitations of physical space pressing down upon Harvest, they were searching for a new property upon which to build a single-site church.  However, when another nationally known ministry decided not to accept the donation of the old Safety Kleen corporate headquarters in Elgin, Illinois, Harvest stepped in and gratefully accepted the donation.  

With this property now in hand, James MacDonald cast a bold new vision for his church to significantly expand the scope and reach of his personal platform. In the opinion of the former elders we spoke with, this was the moment in time when they noticed a marked change in the character and ambition of the man. This new, multi-site ministry model was predicated upon financial considerations.  Had the leadership elected to pursue a single-site model based in Elgin, they were predicting that upwards of one-third of the congregation in Rolling Meadows would not follow the church out to the new site and would presumably not give to the build out campaign.

So, this season in Harvest’s history would now be inaugurated by first making material improvements to the Rolling Meadows campus.  Following that, the recently donated property in Elgin would be retro-fitted to accommodate a school, church offices, and a newly added 2500 seat sanctuary, the “shell” of which was capable of being expanded to 7500 seats.  Lastly, the recently donated camp in Michigan would also be built out, in the hopes of bringing MacDonald’s vision of a fully-realized church camp to fruition.

For this purpose, the leadership of Harvest Bible Chapel began to roll out the Seize the Opportunity capital campaign, asking members of the congregation to sacrificially give $2o million over the next three years, above and beyond what families typically gave through their regular tithes and offerings.  It should be noted that Harvest was prepared, at that time, to incure up to $30 million in debt.  This decision was based upon a belief that this mortgage would be well within their financial capabilities to payoff in a reasonable amount of time.  Assurances were given to the congregation, both verbally and in writing, that the leadership was not in a hurry to build out and that they would be judicious regarding the finances.  When asked, “Is the church going to borrow more money than the campaign goal,” Harvest responded as follows:

Our leadership is committed to not putting the church in a difficult situation.  We are not in a big hurry.  We want to attempt big things for God and work hard and see what happens, but we are sure not going to put our church in a bad position financially.  You can be very confident about that.

What must be acknowledged without equivocation is that this quote is not a complete refusal to borrow money.  Furthermore, it is also acknowledged that, in 2006, the leadership disclosed that “bridge financing” would be necessary until such time that all of the pledges were fulfilled by the congregation.  Of course, this raises the obvious question as to why “bridge financing” would be needed given the fact that Harvest had already indebted itself through the procurement of loans.  In the end analysis, it is the opinion of these authors that it cannot be construed, even with the most generous of interpretations, that the leadership was disclosing that they were on the doorstep of a journey that would ultimately lead to more than $65 million of debt.

So, the question remains: how did Harvest come to this season of financial crisis?

A Roll of the Dice

While there was a need to retrofit the existing structure for church use, James MacDonald decided to double down. In addition to revamping the current structure for use by the church and the newly-planned school, a massive addition containing a gymnasium, an auditorium, and other ancillary ministry space was added to the property.  This structure is so large, that to this day, approximately 40% of it is still undeveloped raw space that goes largely unused.  This raises the question as to why Harvest would build such a massive facility, particularly when they lacked the congregational size to require such a building.

What is known at this time is that when Harvest embarked on this journey, three groups were charged with overseeing the project.  In addition to the elder board, the services of an architectural firm were engaged.  Additionally, a Construction Oversight Group (COG) was established, with members of the HBC staff and building contractors serving alongside one another.  Early in the process, against the counsel of the COG, James MacDonald elected to forgo the services of a general contractor, apparently believing that he could manage the project himself, with the assistance of technical advisers.  Unfortunately for the members of HBC, many of the COG’s predictions of disaster (due to proceeding without a general contractor) came true.

Nevertheless, from that point forward, the significant players included: the COG, the architecture group and the elder board, with James MacDonald acting as the go-between for all three groups.  It should be noted that during this season, there was rarely, if ever,  any direct communication between the COG, the architects, and the elders.

As the building continued forward, it was discovered that the steel for the Elgin facility was faulty.   Ordinarily, when one has utilized the services of a building contractor, issues such as these become the financial problem of the contractor.  In this, since James MacDonald had decided to proceed without an independent general contractor, the financial problems now threatened the financial stability of Harvest Bible Chapel.   At one point, the construction ground to an absolute halt, as it was determined that the structure was not even safe for the workers to continue.  Making matters even worse, James MacDonald continued to press for Harvest to occupy the building by the date of the planned unveiling; and in his zeal to meet this goal, he may have incurred upwards of $2 million more in additional costs.  For example, drywall was hung and carpet was laid before the windows were installed, leaving the facility exposed to rain and weather.

Lastly, Pastor Joel Anderson and the elders of Harvest Bible Chapel – Crystal Lake, formerly an autonomous church, led that congregation to the brink of bankruptcy in an attempt to build their own facility.  As Harvest Bible Chapel – Rolling Meadows was effectively on the line as a co-signer, they were forced to bail the church out as they made it a satellite campus.   In the end, Harvest was forced to take on approximately $6 million of debt above and beyond that which they already accumulated to this point.   This additional debt was necessary to purchase the Crystal Lake property and build it out for use as a church.

At the outset of this endeavor, the leadership of Harvest Bible Chapel never wanted to be a multi-site church.  But following the financial crisis that arose through the ill-advised build out of the Elgin campus and the absorption of the Crystal Lake campus, the staggering debt load forced them to adopt a multi-site ministry model.  Thus, campuses such as Niles, Aurora, Chicago Cathedral, and Winnetka were added over time to the fold as a means of expanding the ministry of James MacDonald and as a means of expanding the tithing base.

During this season, sources recall James MacDonald openly lamenting the fact that he had planted autonomous churches in the greater Chicagoland area, preferring instead that these plants would have been satellites of the main church.   Therefore, in our opinion, it should come as no surprise to the reader if, in the future, currently autonomous HBF churches are re-grafted back into the fold as satellite extensions of MacDonald’s ministry.

Regardless, one has to wonder, if the debt load is normal for a mega-church of this size.

The Larger Context

Click to enlarge.

In order to understand the magnitude of the debt that was amassed during this season of spending, one must first seek to put these liabilities in their proper context.  According to this 2010 report by the Leadership Network, the typical North American church of 10 to 15 thousand congregants has an average debt load of $15.06 million.  Thus, Harvest’s debt as of the close of 2010 would be over 4 times greater than the average debt carried by churches of comparable size just one year prior.

Moreover, it is critical to recall that when Harvest began to accrue these financial liabilities, their congregation was not the robust 10,000+ member body it is today.  More importantly, while their current annual tithing revenue is around $24 million per year, it was significantly lower during the years they were accumulating the massive debt, raising the question as to how James MacDonald intended to make the payments on this debt and pay it off.  And in that light, the accumulation of this massive debt begins to look to us even more reckless and irresponsible.  One might even say it was a rather high-stakes gamble that his congregation would grow rapidly enough so as to avoid complete financial collapse.  This raises the question as to why one would take such enormous risks.

The Danger

So what is the danger of a church amassing a debt load of this magnitude?  First, one need look no further than the recent history of the Crystal Cathedral to see what debt can do to a church.   Whereas the Crystal Cathedral once lived as if it was flush with cash, the church was forced to file for bankruptcy in October 2010.  According to the Christian Post, the Cathedral was estimated to be $50 million in debt, before being forced to sell its property to the Roman Catholic diocese for $57.5 million.  What’s more, according to a 2012 report on, the Crystal Cathedral is far from alone in its circumstances:

There’s a new development in the housing crisis: Foreclosures are hitting houses of worship.  According to a report from Reuters, 2011 was a record year for foreclosures on church buildings. Prior to the Great Recession, bank seizures of houses of worship were rarer than atheists in foxholes, with only a handful of foreclosures occurring in the decade prior to 2008.  That all changed when the mortgage crisis hit.

In addition to this, there are other dangers as well.  Take the typical pastor of a mega-church, for instance.  Assume, for a moment, that he were to have a moral failure on the magnitude of Ted Haggard.  Hypothetically speaking, let us say it was discovered that this pastor was involved in high stakes gambling.  In such circumstances, it is not uncommon for pastors to be removed from their ministry.  Moreover, it is not unreasonable to assume that such an event might lead to a sizeable decline in the attendance of the church, which in turn would lead to a decline in the financial stability of the church.  In such a scenerio, the pastor escapes with virtually no personal financial responsibility.  He is free, just as Haggard was, to start a new church and a new life, with no ties to his former congregation or their misery.

Or what about a less salacious scenerio?  What if the pastor of a church with debt were to suddenly die or decide to leave the church to pursue other endeavors, much as celebrity pastors, such as Rob Bell, have done.  When the ministry of a church is largely based around a central charismatic figure, is it unreasonable to suggest that in a pastor’s absence the church might well suffer the loss of congregants and the accompanying tithe base?  And if that did indeed occur, might a church carrying a large debt not find itself struggling to make its payments?

We think that it should be recognized that this wild accumulation of debt in the pursuit of oversized buildings flies in the face of biblical wisdom  and the teachings of Crown Ministries on debt, both of which were taught at HBC for years.

During the accumulation of this $65 million debt, did Pastor James MacDonald personally profit from the rapid expansion of his ministry?


search previous next tag category expand menu location phone mail time cart zoom edit close