IN STRATEGIC ALLIANCE WITH

Crowdfunding Overview

Eagle Ledge Foundation Eagle Ledge Foundation is a multi-option “one stop” loan provider and California Religious Non-Profit Corporation. Our goal is to deliver funds with the best terms and conditions available to our Christian ministry partners. We exist primarily to support new ministry endeavors, renovate existing ministries and fund additions to ministries. Our founders and managers are Thomas Fontana and Chester Reid.

Having pastored for 11 years, Dr. Reid understands the crucial role money plays when wanting to move forward with a ministry venture. Eagle Ledge Foundation aims to be a friend to ministries as we seek out the right amount of funding. For us, this means streamlining the lending process and quickly determining the borrowing and raising capacity of a ministry. We encourage ministries to build to their money in order to avoid unwanted risk in the future.

Our lending services meet diverse and challenging projects. We act as direct lenders on projects under $500,000. With many investors who are Kingdom-minded, we have access to some private capital that may be invested in biblically-grounded ventures. In this case Eagle Ledge is a direct lender generally on projects under $500,000. This may be a solution for ministries who are underserved through traditional sources. We have been bond underwriters for over 500 completed projects and maintain correspondent lending relationships. We also specialize in Crowdfunding which is a great solution for many funding projects.

Types of Loans Ministry financing is often arranged from either a conventional lender, private money, or internally with friends and supporters. • Conventional Loans often provide amortizations from 20-25 years with fixed interest rates for 5-7 years. These are secured

with a First Mortgage or Trust Deed. While many projects are funded in this manner, BGWSS has never recommended this financing unless it is the intent of the borrower to pay it off in the first 7 years. Long term financing has its’ place but is very “risky” for ministries that cannot depend on long term giving.

• Crowdfunding is a long practiced way to self-fund, providing an opportunity for those associated with the organization to fund a loan, with very favorable terms and conditions. it is most often used for smaller additions, renovations and as an interim loan that is paid back through 3 year capital campaign commitments.

Benefits of Crowdfunding Crowdfunding can be an incredible option when borrowing money, especially in terms of stewardship. When many people think of Crowdfunding, they immediately think of a campaign through Kickstarter or GoFundMe meant to reach the masses and attain a goal through small donations. However, with BGW and ELF, Crowdfunding provides an opportunity for your ministry and its friends to invest in your building project. In this process, investors will not only receive their money over time, they may even gain a return on it!

Typically, there are 3 reasons people will let go of their money: in order to spend it, invest it, or give it away. While a ministry may teach their followers about how to best steward their money, typically they only have access to the third type of money, that which they are willing to give away. This is the money they will donate to your capital campaign, tithe, or give in a special offering. However, through Crowdfunding, they are also able to invest in your project.

BGW SUSTAINABLE SOLUTIONS LLC 2909 WASHINGTON BLVD I OGDEN, UT 84401

P: 801.621.4781 I F: 801.622.8142

In a Crowdfunding model, the ministry (acting as the borrower) can set the maximum interest rate and terms paid to the investors. Meanwhile, Independent Trustees professionally manage the funds, escrowing them and providing loan servicing and investment distribution. The individual lender (someone in your ministry) actually determines the final interest rate which can be no higher than the amount set by the ministry. As an example, the ministry may set a maximum of 5% but the borrower may only want to charge their ministry 3%. Under this model each lender can set a different interest rate up to the maximum the ministry has allowed.

There are many benefits to Crowdfunding, especially as compared to traditional loaning options. They include the following: • The Ministry gives individuals they know the opportunity to take money they may be getting little or no interest on and

invest it into something that not only gives them a good interest rate but also invests in Kingdom building opportunities. • Ministry sets the maximum interest rate and terms and conditions. • Interest is paid to those who already support the ministry. • Payments can be interest only and made quarterly. Principal can be due at maturity or the principal and interest can be

paid based on the term of the loan. Generally the term does not exceed 7 years. • No prepayment penalty. • Maximizes ministry borrowing capacity. • Investors can use IRA and cash accounts. • Interest Rate can be 40-60% less than market, reducing ministry costs. • Fees are significantly less than bonds. • First mortgage is not tied up with Crowdfunding. • Unlimited participants with a minimum $5,000 investment. • In a capital campaign, participants may choose to donate these notes back to the ministry.

Heart of Crowdfunding While many loaning partnerships are focused on a return on investment, the heart of Crowdfunding is about developing a team. The goal is to develop partners who are interested in bringing about the same future for the ministry while gaining a return on their individual investment. This is the same community that may have donated to a capital campaign and the ones who will be there to celebrate with the ministry during a project groundbreaking and opening. Through Crowdfunding, “we” get to move forward in the direction of God’s call together.

Your success in Crowdfunding is based on your reach, readiness, and retention. • Your reach depends on the extent of your community relationships. Who do you know who may be interested in

investing? How far is your social media reach? • Your readiness depends on your ability to tell your story well. Can you explain your project, its purpose, and how others

can participate succinctly? Do you express a sense of urgency without anxiety? Can you help people understand why they should care?

• Your retention depends on how people understand the value of this opportunity. Can you express the plan in a way that helps others believe it will soon be a reality, rather than a distant dream? Are you talking with the right people? Are you able to answer their questions or find an answer promptly? Do they feel targeted for what they can offer or welcomed and thanked for their part?

Simon Sinek notes, “When people are financially invested, they want a return. When people are emotionally invested, they want to contribute.” In this Crowdfunding model, your ministry will have the opportunity to do both.

Crowdfunding Website A dedicated webpage to your Crowdfunding project will be developed and maintained by Eagle Ledge Foundation in partnership with your ministry. This will enable ministry members to lend easily online. Below you’ll see an example of this webpage, that includes information about the ministry, a business plan, an overview of the lending process, answers to frequently asked questions, and shows funding progress.

BGW SUSTAINABLE SOLUTIONS LLC 2909 WASHINGTON BLVD I OGDEN, UT 84401

P: 801.621.4781 I F: 801.622.8142

Moving Forward In order to prepare for a financial evaluation, you’ll need 3 years of Balance Sheets and Income and Expense Reports, plus current year to date, as well as an Executive Summary of your project.

Typically, a ministry may consider their qualification for loans by assessing their Maximum Borrowing Capacity. This is 3-4 times their gross tithes and offerings. If the ministry has other reoccurring income, it needs to be separated out. The Loan to Value is 70 to 75%. Through Crowdfunding, the borrower may overcome any shortfalls on these ratios.

Combinations of various lending are available, including Direct Lending and Crowdfunding, Bank Loans and Crowdfunding, and Crowdfunding with ELF Direct Funds. Another option is linking Crowdfunding with “for Profit Investors” which is generally done when the project that is being contemplated has a profit potential. BGWSS will work with each ministry to try to secure the funding the client is requesting.

For More Information To learn more about the BGWSS funding solutions or to get started with an analysis of your funding capability, contact Catherine Tobey, Director of Stewardship, at ctobey@bgwservices.com.

BGW SUSTAINABLE SOLUTIONS LLC 2909 WASHINGTON BLVD I OGDEN, UT 84401

P: 801.621.4781 I F: 801.622.8142