Church Economics

I’ll be honest, one of my struggles with attending a local church is not entirely theological. One of the biggest obstacles is church economics. It is hard for me to wrap my head around the way churches spend money in the name of doing “ministry.”

My hang-up is the enormous amount of money that we spend on ourselves, not to mention the vast amounts of money that are funneled into keeping the evangelical industrial complex humming. We have created, and continue to support, a system of professional Christians on whom we depend to do “full-time” ministry and have come to believe that large buildings, audio-visual equipment, commercial kitchens, and coffee bars, are “needs” for the well-being of a church. Meanwhile, Christian non-profits and mission agencies (organizations arguably doing the most to advance the kingdom that we all should be striving to bring here to humanity) are begging for resources – financial, material, and human – while the best local churches can do is to throw them the leftovers from the annual budget and occasionally do a special event or “giving” Sunday.

Some may not characterize it in the same way, but that is really a matter of semantics. No doubt there are some churches that use the financial resources better than others, but if we look at some actual numbers that are routinely repeated as the standard measures for church budgets, it is difficult to rationalize the lopsided, self-serving way that we use congregants’ offerings.

You can find some variance, but if you spend some time researching how churches divide up their budget it will look something like this:

50% to salaries and compensation.

25% to building, maintenance, and related expenses (power, water, internet, etc.).

15% to internal programs and ministries (Sunday school, VBS, small groups, etc.).

10% to missions (local, domestic, and international).

Again, these are averages, but the degree of variation is relatively small. Also, keep in mind that as an “average” this means that there are roughly an equal number of churches whose budgets fall on both sides of those numbers, either higher or lower percentages. These numbers also reflect the general recommendations that “experts” give to guide churches in creating their budgets. That amounts to spending 90% on us, and 10% on others. I don’t know about you, but that seems a bit lopsided. It’s like buying a $90 item at a charity auction for $100 and saying that you gave a $100 “donation” to the cause.

Recently I felt compelled to make a donation to a relief organization to help Ukrainian refugees as a result of the Russian invasion of their country. It wasn’t difficult to find non-profits who were trying to get aid to the refugees, but I wanted to make sure that I was giving to a reputable organization where my money would be used well. There are a variety of websites that rate non-profits and give them grades based on their financial responsibility and how much of each donation goes to the actual work that they claim to be doing. So, after checking a couple of them I narrowed the list, chose a non-profit, and made my donation with a high degree of confidence that my money would be used well.

As I went through this process, I couldn’t help but wonder about local churches. What if each local church were given a financial accountability grade base on what percent of its income was used directly for the actual mission that it claims to do? What if we scrutinized the financial responsibility of the local church in the same way we scrutinize the financial responsibility of other non-profits? Would we give money to a non-profit that was going to spend 75% of our donation on salaries and building/maintenance costs? I can say with absolute certainty that I would not have donated to an organization if I knew that only 10% of my contribution would make its way out of the organization to the people that they claimed to be reaching. So, why are we okay with that standard for the local church?

Let’s think about putting some real numbers to those percentages. In my area, the median household income is about $60,000. If a median household were to give 10% to their local church (this is not an uncommon expectation, although it is an uncommon reality), that means they would give the local church $6,000 in one year. Of that $6,000, about $3,000 would go toward salaries for the professionals at the church. About $1,500 would go toward paying the regular monthly bills, including building expenses. Another $900 would be used for internal programs that serve those who attend the church. Finally, $600 would trickle out to be used for various forms of outreach and to give to mission agencies. Essentially, $5,400 would be spent on us, and $600 would be spent to minister to those outside the church. [1] Adding insult to the pittance local churches send to missions, they are often great at scrutinizing the missions they contribute to and how their contribution is used, eager to hold the mission and missionaries “accountable” for how they use the funds that they are entrusted with (I think there is a word for that sort of behavior…).

I know that there are a different set of issues with house churches, but just for the sake of perspective, let’s consider a scenario. Suppose that in a medium-sized local church of 100 median households, 10 of those households decided to step away from the traditional model of church and formed their own house church (I know that is a large house church, but it makes the math easy!). If each family continued to give 10% of their income, what could they do with that money? Theoretically, without salaries, without building expenses, without the costs of sound systems, video production, and coffee bars, the house church could give 100% of its donations to outreach – to missions. That means that financially, 10 households in a house church, could have the same financial impact as 100 households in the traditional local church, by simply cutting out the “middle-man”. Based on the median household income of $60,000, both would be giving $60,000 a year to missions. Taking it a step further, it would only take 20 similar house churches or about 200 households, to generate $1.2 million in donations to missions. Those same 200 households attending a traditional church would be giving $120,000 to missions. There might be many arguments against the effectiveness of house churches, but this seems to be one very compelling argument in their favor, at least for me.

Now, if it was universally acknowledged that the way traditional local churches spend money is working, that is, that it was producing results in terms of converts to Christianity and churches bursting at the seams, then all of the this would be a moot point. But the reality is that Christian leaders have been lamenting the decline of church attendance and people in the U.S. identifying as Christian for the last decade. Nationwide, churches have been closing faster than new churches are being planted. Roy Moran, in the book Spent Matches, cites researchers who estimate the cost of baptizing one person in the United States is about $1.5 million.[2] Clearly, our traditional church budgeting protocols are not working efficiently, if we can claim that they are working at all.

There is a lot more to the trending economics of local churches, some better and some worse, but even the “better” leaves me wondering if this is really anywhere close to our best. This is not a post advocating for house churches, but it is an attempt to call all of us, and our local churches, to do better. Maybe an upgrade to our sound system isn’t as important as extra support to a church in India meeting secretly in an alley. Maybe we can figure out how to live without the commercial kitchen update for the sake of workers ministering to refugees in squalid refugee camps in Bangladesh. Maybe we can forego the coffee bar for the sake of helping those working to free youth entrapped in slavery and the sex trade, or, at the very least we can use our extravagant coffee consumption to help Haitian coffee farmers trying to survive corrupt coffee buyers, a corrupt government, and gang violence. Maybe we don’t need another paid staff member, maybe we need volunteers to rise to the occasion, so money is freed up to reach out to the poor, the oppressed, and the marginalized. Maybe we all need to talk about ourselves as full-time ministers instead of only putting that label on professional Christians that we pay to do the work. Maybe we need to work harder at showing people how to live as disciples and worry less about making people comfortable and entertained, so we can actually use our money as disciples instead of consumers.

Christians in the United States are sitting on the vast majority of the world’s wealth amongst Christian communities on this planet. That means we have a huge responsibility to use it well. You may disagree with some of my characterizations, and I encourage you to prove me wrong, but I don’t think the traditional church model, spending 90% of our contributions on ourselves is using our wealth well or efficiently. You might tell me that your church does better than the average, but I would argue that doing a little better than awful is still pretty bad.

[1] If you really want to look into this more, I encourage you to look into the specifics of the 10% that is designated toward “missions”. Some churches will include such things as donations to the larger denomination, gifts to Bible schools and seminaries, pastoral retreats, and funds for pastors to use when meeting individuals (usually from the congregation) for coffee or a meal. In this sense, even money set aside for “outreach” is still spent internally on the local church community. [2] David Barrett and Todd Johnson, World Christian Trends, (Pasadena: William Carey Library, 2001), 841, quoted in Roy Moran, Spent Matches, (Nashville, TN: Thomas Nelson Inc., 2015) 11.