Why Most Churches in the U.S. are being run like a Business

 

Published by Darren Shearer

It’s a hard, awkward truth: The churches most of us attend on Sunday mornings are businesses. 

I realize this is difficult for us to admit. (I’ll address some of these biases toward the end of this article.)

Although religion in the United States is a $1.2 trillion dollar industry, I’m not making this case just because churches and other religious institutions bring in a lot of money. Churches meet many more criteria for being considered businesses. 

(In this article, my goal is to refrain from drawing conclusions about whether it’s a good or a bad thing that most of our churches are businesses. As a business owner, I happen to believe business is an ideal place for Christian ministry. However, I do believe it’s disingenuous to operate a business and attempt to convince its stakeholders that it’s something somehow more noble and spiritual than a business.)

1 – Churches offer the same services people pay money for in the marketplace.

People pay billions of dollars to experience great music and great public speaking, which are two primary things people are pursuing when they attend a worship service on Sunday morning.

For example, I went to a phenomenal Chris Tomlin music concert not too long ago, whose music is played/covered by music groups in churches all over the world every Sunday. 

At this concert, Pastor Louie Giglio preached a powerful message about God’s love. The entire experience was the type of unforgettable, Christ-centered move of God many churches strive for every Sunday morning. 

For my wife and I to have this experience, the ticket price was $25 each. 

Can you imagine a church charging $25 per person for admission? Why does this seem so far-fetched? 

I recently tracked down revenue and expenses data for 609 average-sized churches from a foundation that provides grant funding to small/average-sized churches. (Note: Approximately 85% of churches never grow beyond 200 weekly attendees.) Here are just a few samples of my findings based on my assessment of the data this foundation sent to me:

• Cost to host one attendee for a church averaging 162 weekly attendees = $23.80 per person (same rate applies for children)
  • For churches averaging a little more than 100 extra attendees per week (268 weekly attendees), the church’s cost dropped by 16% per person ($20.02 per person) due to economies of scale. Although I don’t have data on megachurches with 1000+ weekly attendees, I would expect the actual per-person cost to continue dropping significantly each time the church adds 100 more weekly attendees if this trend continues.
• Annual collections for churches averaging 162 weekly attendees = $217,170
  • Note: There are approximately 300,000 Protestant churches in the United States. Given that 162 weekly attendees is roughly the average size of all Protestant churches in the U.S., this means Protestant churches in the U.S. collect approximately $39.9 billion in revenue annually. This is $10 billion larger than the entire health club industry in the U.S., which is estimated at $30 billion.
• Pastor’s salary for churches averaging 162 weekly attendees (not including any other fringe benefits like housing, honorariums, etc.) = $38,957

Let’s assume you attend a church where 162 people will show up on a typical Sunday morning (I’m not talking about Easter Sunday). Your church’s cost for you to attend is $23.80. If you have a family of four, your cost would be $95.20. 

Clearly, most people attending church aren’t covering their own family’s costs to attend through what they give in the offering. This means a small percentage of the attendees are footing the bill for the majority of the attendees. I think this arrangement is fine as long as the church entrepreneurs/CEOs are giving everyone informed consent about the reality of this financial arrangement.  

Unless they simply don’t have the financial wherewithal, I believe every regular church attendee should give the actual per-person cost for your church weekly, assuming you can get this information from your church’s finance department (which may be difficult). I believe churches should publicize this information. 

Now, if you’re saying, “There’s no way I’m paying $23.80 per person every Sunday for my family to attend because we don’t get that amount of value out of the experience”, I suggest finding a different church or finding a more cost-effective way to worship with your fellow believers on a regular basis (e.g., gathering with Christian friends in a home for worship, attending a church that keeps is costs lower, attending a larger church where the per-person cost is lower, etc.). 

2 – Churches are legal entities. 

When I say “church” in this article, I’m not talking about the universal “Church”, the sum total of God’s people around the world who confess Jesus Christ as their Lord and Savior and have repented of their sins (i.e., the “Bride of Christ”).  

I’m talking about “church, Inc.”, legal entities located at a particular address (usually located within a few miles of another church), that typically host a gathering on Sunday mornings that includes rehearsed music and a speech delivered by a financially compensated public speaker, during which there is usually a collection of money requested from the attendees.  

I am involved in one of these church institutions, and it’s one of the good ones.  

I would also consider the church I attend on Sunday morning to be a business. It provides value to our community, seeks to obey the laws of the land, creates jobs for the local community, generates profit to benefit more people, and aims to make disciples of Jesus Christ … just like the Christ-centered businesses many of God’s people operate.  

3 – Churches generate profit. 

When churches reach the requisite $23.80 in revenue per attendee each week, do they stop taking offerings? Of course not. Why? Because they want to become as profitable as possible. 

Yes–like hospitals, universities, retail stores, investment banks, etc.–churches generate profit.  If the church remains operational, you can be sure there’s profit. When they run out of profit, they close the doors. 

But a primary difference between the local churches most of us attend on Sunday mornings and the other Christ-centered businesses carrying out the Great Commission in society (e.g., Christ-centered construction companies, Christ-centered fast food restaurants, etc.) is that the organization’s leaders are legally prohibited from putting the profits in their own pockets. That’s what it means to be a 501c3 tax-exempt organization here in the United States. 

(Perhaps they would pocket at least some of the profits if it weren’t against the law. After all, many of them are the entrepreneurs who founded the church, which required just as much effort as it took for an entrepreneur to build any other small business of similar size.)

But the profit is still there. It’s just allocated in different ways (e.g., new buildings, paying guest preachers who will often return the favor by having your pastor come preach at his church, giving to “strategic ministry partners”, etc.). 

Profit is frequently allocated to cover the pastor’s travel expenses. For example, I know one megachurch pastor in my city who travels to Africa every single week to preach in partner churches there. That’s at least $70,000 per year just for airfare. 

If there is benevolence giving to a member of the church in financial need, the applicant’s giving history will typically be taken into account, partially to ensure the person is not withdrawing from funds he/she has not deposited in the past. 

This seems like a logical approach for a business. I wouldn’t expect a health club to allow me to take a dip in their pool just because I’m feeling hot. They would first check their records to see if I had first paid my dues. 

It’s hard to stay profitable if the people withdrawing money and other member benefits haven’t been making any deposits.  

4 – Churches create jobs for local economies.

How many people can you count in the picture above? These are all people employed by one single church. This image above demonstrates the economic power of one megachurch in Charlotte, North Carolina to create jobs within its community.

Because there are so many church job openings to fill, there are dozens of employment agencies that specialize solely in recruiting staff members for churches.

5 – Churches use tax loopholes to maximize profits. 

Wise entrepreneurs take advantage of every tax loophole to avoid paying any more taxes than are absolutely required. 

It just so happens that churches typically have the most lucrative tax classification possible: complete tax exemption. They pay zero taxes on any revenue they bring in. 

6 – Churches are strategic about generating revenue. 

I believe the main reason churches don’t charge admission–or make more forceful appeals for money–is to avoid deterring visitors, who are the prospective members and givers who will ultimately contribute extra funds to help grow the church. It’s a “taste and see” approach. 

Again, this makes good business sense. A health club typically wouldn’t charge a prospective member for the first workout in its facilities. 

Likewise, many churches mention to first-time guests that they shouldn’t feel obligated to give during that initial visit. But for everyone else at offering time, it’s time to open those wallets and pocketbooks (or text to give, give through the church app, setup automatic billing through the church website, etc.).

In addition to courting visitors with the hope of them becoming new donors, church entrepreneurs also launch full-spectrum financial giving campaigns periodically throughout the year … especially when the church is building new facilities. These campaigns often involve money collections separate from and in addition to the standard money collection during the Sunday service plus a series of sermons on the theme of giving and/or supporting the leader’s vision (e.g. citing Bible passages such as Nehemiah’s rebuilding of the walls of Jerusalem, Solomon’s building and dedication of the temple, etc.).

In his book, The Coming Revolution in Church Economics: Why Tithes and Offerings Are No Longer Enough and What You Can Do About It, Pastor Mark DeYmaz suggests that his fellow pastors should start exploring new opportunities for generating revenue beyond weekly donations, pursuing multiple streams of income. Some of his suggestions include…

• Stop giving out free coffee and donuts, and start charging for them. 
• Rent out church facilities when/where not in use. 

7 – Churches compete.

Many churches require new pastoral staff members to sign non-compete clauses to prohibit those pastors from starting a “competing” church across the street. 

But, hey … that’s business. 

Those churches work hard–and frequently spend enormous sums of money on direct mail campaigns, billboards, radio/tv ads, movie theater ads, and much more–to attract new attendees, and they don’t want some ex-employee trying to steal them and their weekly giving away. 

If you hired a new sales manager in your car dealership, you wouldn’t want that sales manager to leave your company and start a new one directly across the street and bring along the relationships built while working in your company. 

8 – Churches that succeed financially typically scale that success through planting new churches that generate additional revenue. 

The dream of most church entrepreneurs/CEOs I have met is to govern more than one church campus. This may occur through having “satellite campuses” where the preacher’s sermon is live streamed into church meetings at other geographical locations. 

Typically, the mother church will appoint a pastor for the new location, help with recruiting a “launch team”, and provide startup capital to rent a venue, purchase a sound system, etc. 

As revenue is generated by the new church plant, that revenue remains on the balance sheet of the mother church. 

Why is it hard to admit that churches are businesses? 

I think there are many reasons, but I’ll share three of them here. 

1 – We generally have a low view of business as a tool for social and spiritual impact, and we want to assume that our churches are above businesses on the mythical sacred-secular hierarchy. 

Some church entrepreneurs/CEOs go as far as to refer to their church buildings as “the house of God”, implying that every other institution outside the church building is something less than the house of God. Of course, this is unbiblical as the New Testament makes it clear that God’s people are the house of God, His temple made without human hands. 

2 – We don’t want to threaten the financial engine of charitable giving that allows churches to host gatherings on Sunday mornings by threatening its tax-exempt status or by subjecting our churches to the same consumer-driven scrutiny faced by all other small businesses in the marketplace. (But that’s where we are in the 21st century. We’ve already created a highly consumer-driven church industry.)

Church entrepreneurs/CEOs typically instruct their congregations that 100% of his/her tithe should be “paid” to his/her local church … no questions asked. On one hand, the funds are solicited as something like a tax to sustain the Sunday morning operations based on the size of one’s income; on the other hand, church entrepreneurs/CEOs appeal for funds as a generous act of charity, usually framing the appeal around a cause like disaster relief, homeless ministry, or something other than the normal operations of the church on Sunday morning (which is the only way 95% of the attendees engage with the church on a weekly basis). But all of these funds typically get commingled in the same pot.

Because there is no New Testament requirement for tithes to be paid to a local church, it is typically suggested that the Old Testament’s system of tithing to the temple applies today because the church building is said to be the modern-day temple. Again, this concept of the temple in the New Testament is unbiblical. 

3 – The “business” aspects of church are hidden from most members of the congregation. 

What does it cost your church for you and your family to attend on Sunday morning?

How much money and other compensation does your senior pastor make? 

How much do guest preachers get paid when they come to preach at your church (and when your pastor goes to preach at that other church)?

Is your church involved in any legal disputes?

Approximately how much does your church spend on advertising?

Most of the business questions never get asked because we’d rather not think of our churches as businesses. 

Bottom line: Is the organization focused on making disciples of Jesus above all else?

Whether you work in a retail store or a church … whether you attend a megachurch, a house church, or something in between … whether you’re the founder/CEO or an entry-level employee … every Christian’s and Christian-led organization’s business should be to “make disciples” of Jesus Christ.  

It’s not to make profit. 

It’s not to build churches. 

It’s to “make disciples” of Jesus Christ. 

There are many different organizational models for making disciples and “doing church”, and we must do a better job of questioning these models. 

We must always question whether our organizations are truly making disciples of Jesus or if they seem to be pursuing lesser objectives as its chief aims. 

As the organization (whether a church, shop, or community) inevitably deviates away from its God-given purpose to make disciples of Jesus, the Christian’s responsibility is to help reorient the organization back toward this ultimate purpose.

 Nov 21, 2021 Much of what is called "Christendom" today revolves around the world of the megachurch, and what a world it is. This intricate network of corruption and business is such a far cry from biblical Christianity as to make those involved in it as far from Christ Himself. Mega Churchianity is an enterprise that crosses denominational lines and which has deceived millions. So, how did the megachurch destroy Christianity? For those interested in going deeper into these corruptions, please see this playlist:    • Apostasy Report - Matt Chandler.

 

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