Where do churches get their money?

Ever looked at a church building and wondered how it’s maintained? Or wondered how megachurches afford their marketing and outreach programs? You’re not alone – the ways in which churches make and spend money are quite often kept relatively quiet – after all, their primary aim should be spreading their religious message and helping people, so a lot of churches do not talk much about their finances.

There are so many different types of churches across the country, from tiny rural churches to enormous flashy megachurches, and it’s important to remember that these different types of churches will have very different finances.

Do churches have a lot of money?

With church finances often kept quite quiet, there are a lot of rumors flying around about how much money churches have. Unfortunately, there is no simple answer, and this is mostly due to the huge differences in different types of churches across the US. There are different sects of Christianity, from Catholic Churches to Mormon Churches, all of which will have slightly different beliefs. There is also a huge discrepancy in the size of these churches – some can barely seat twenty people, while some churches are enormous communities. And, of course, each individual church will have different views about raising money, and they’ll have different methods and different expenditures. There is no way to lump all these different churches together.

That’s not to say, of course, that all churches are poor. Some churches may not have a lot of money in their accounts because they funnel it straight out into youth group activities or other community outreach programs. And, of course, a lot of the megachurches publicize the fact that they can afford large fancy buildings and all the accouterments of public religion. In fact, some megachurches famously – or infamously – have had ministers with private jets, suggesting that these churches are not at all short on funds.

How does a church raise money?

This might be a surprising fact considering how much money churches seem to have, but the majority of income a church has is from donations. This might be from small regular donations from their flock of worshippers, or it could mostly come from a few generous parishioners.

It’s worth remembering that a lot of people visit churches from all different walks of life. If you’ve ever seen churches handing around a donation basket for church members to donate and thought that their pickings seemed slim, it might be that the church is getting larger donations from people at other times.

Of course, this means that the larger a church is, and the more people that visit it, the more donations they are likely to receive. Basically, a lot of churches are at the mercy of their parishioners to keep them afloat.

Does all the money come from church members?

Luckily for the churches that may not have such generous parishioners, there are other ways that churches can raise money. So no, not all the money for a church comes from its members, but it is still usually where the average church will get the majority of its money from.

How do churches justify asking for donations?

There are a lot of ways that churches justify or encourage their members to give donations. In fact, a lot of churches still follow practices like tithing. If a church teaches tithing, this means that every member should give a percentage of their income to the church. This is an age-old way of raising funds that have been around since the Middle Ages in Europe. Both churches and local lords would demand a tithe from the people in their area. It acts in a similar way to a tax, that typically you give more money as you earn more, always keeping the tithe proportional to your income.

A lot of churches also teach the act of charity, and so a lot of churches raise money for charitable causes – though inevitably some of this charitable giving has to be spent on church upkeep as well as doing good in the community.

Historically, some churches – especially Catholic parishes in Europe – used to say that donations were required in order for someone to get into Heaven. In the Middle Ages, parishioners used to be able to purchase ‘Indulgences’, which would absolve them of a minor sin, or would lessen the punishments they could expect to receive in the afterlife. This practice is not commonly followed in most churches these days, but some still do.

Of course, a lot of churches are up front about why they need funds – most churches will ask for donations from the community to help keep them running, and they will usually have extra pushes for donations if they have a particular issue that needs money, such as a repair bill for the church building.

Should I donate when I go to Sunday morning church service?

With all this in mind, if you are a regular church-goer, you might have questioned if you should donate. A lot of churches have mid service offering requests, which means that they ask for money in the middle of Sunday morning church services. While this might be an ideal time for people to donate if they want to, it’s important to remember that there is no obligation to donate to your church. It is also very important not to feel peer pressure to donate beyond what you can afford – even if your church requests money, proper budgeting is still important.

What other ways can I support a church?

If you want to help financially support your church but do not have extra cash to do so, there are still plenty of ways to help out. Churches run a lot of events to help raise funds, and you can muddle in to help make these a success – or you can even suggest some fundraising events of your own. But what ways are there for churches to raise money other than asking their parishioners? Let’s look at how else a church can get an income.

How else does a church raise money?

With churches being very old organizations, they have had a lot of time to figure out how to get enough money in, from events to using their assets to get money. However, with the technology age marching forward, there are also a lot of new and exciting ways that churches raise money. Of course, this list is not at all exhaustive. Churches have to find new ways to get income constantly, so there are a lot of approaches that they can take to get in money and boost their church revenue.

Fundraising events

One of the oldest ways to get income is through fundraisers, and churches use this a lot. Churches make money with a wide range of different fundraisers. Some of them, such as bake sales and thrift sales, are primarily run by their parishioners and local church groups just like with donations, but some rely on others – for example, a lot of churches run silent auctions, getting donations from local businesses. This means that churches typically try to build solid business relationships with local companies in order to get items. Other fundraising events can be easier for a church to run by themselves, such as a church movie night. This type of event may not seem lucrative, but church movie night events can be quite popular, and the church can make money from tickets and they can sell concessions for additional profits. All in all, churches have had a lot of practice at perfecting fundraisers, and thus these can be a big boost to their income, especially if there is a particular cause that they need to raise money for – the stereotypical example is usually when churches raise money in order to fix damage to the roof of the building.

Renting community rooms

This is another huge source of income for churches, and for some churches it can even be their second largest income after donations. Most churches will have at least one room that they can rent out to community members for whatever purpose they need. Typically, churches rent out rooms for private events such as birthday parties, wedding receptions or wakes, but there are other reasons for hiring out a church room. For example, it is very common for people to use churches for recording music, due to the good acoustics in large empty halls and the fact that a lot of churches have pianos or organs onsite. Another common reason people hire church halls is for meetings of support groups, hobby groups, or local event planning committees. All in all, churches can make a good amount of money from hiring out rooms – provided that the rooms are the church’s property, of course. However, this is obviously not an option for all churches – some are too small, while some are too busy to rent out rooms. Still, for those that can rent out rooms, this can cover the entire monthly mortgage of the church building.

Crowdfunding

While crowdfunding might seem similar to getting donations from members of the public, it is worth pointing out a few differences. Crowdfunding can be thought of as the modern way of getting donations in. Thanks to the internet, crowdfunding is unhindered by distance and does not just have to be aimed at people who are nearby. In fact, you can crowdfund projects that are halfway around the world from where you are. Needless to say, with this being an option, plenty of churches turn to online or TV-based crowdfunding for their income.

It is not always an easy route to take – any individual crowdfunding attempt historically can either become a very popular donation idea, or it can go unnoticed amongst hundreds of other requests for money. And while crowdfunding online is often free, if the church wants to advertise their crowdfunding attempts, or if they want to try to crowdfund through TV or radio, this can cost money – money that they potentially won’t recover from donations.

TV crowdfunding is basically one of the main ways that televangelicals and other large churches get money in, but there are other ways as well – for example, lots of churches use dedicated online donation software or special Text To Give software that lets people make donations from the comfort of their own homes. Again, crowdfunding can be used for a specific occasion or a specific project, but some churches have crowdfunding attempts running most of the time, hoping to generate income throughout the year.

Church newsletter

When a church newsletter is sent around to local parishioners, this is not just a convenient way to get information out about events or local church groups – it can also be used as a way to get income. Sometimes this will be as simple as charging a small fee for the newsletter – usually enough to cover the printing costs as well as a bit extra to add to the church’s revenue. However, there are other ways to use a church newsletter to add to the funds that are coming in.

Newsletters can be a great way to advertise fundraising events, and they can also be used to remind people about the need for funds, as well as encourage people to donate. It is very common for people to intend to donate money but then forget. With a regular newsletter, churches can remind their parishioners to donate – and this reminder often comes when someone is at their home, or even better at their desk, where they can quickly and easily get online to donate money.

A lot of churches also use newsletters for regular competitions. This can be anything from poetry contests to crossword puzzle contests. These contests usually include a small entry fee, with the winner being awarded a small portion of the money or a cheap prize, meaning that churches get to pocket the difference, all while people have fun trying their hand in a competition.

Online T-shirt fundraiser and other merchandise

This is another way churches can use the internet to help make more money. There are many different websites where people can design a merchandise item and have it printed on-demand when people buy it, with a portion of the sale price going to the designer. Churches can use this, meaning they design some suitable shirt, and then can just wait for any profits – while the company they are using deals with the issues of finding high quality t shirts, printing them, and delivering them. While the profit margin on each individual item is quite low, it is also a low-risk option, as all it takes is the time spent designing the item. This makes it appealing to a lot of churches, who may not see it as a major line of income, but who can absolutely use it to boost their revenue.

Do religious organizations pay tax?

Typically, most churches in the US do not pay taxes. There are several reasons for this, and some of the reasons are considered quite controversial.

One of the main reasons that churches do not pay taxes is because are they classed as Not for Profit Organizations. Becoming a Not for Profit Organization happens when a group shows that they are designed to do work without taking a profit themselves. This is often the type of classification that charity groups have. Not for profit organizations pay no taxes, or at least pay different taxes, based on the state they are in.

The classification of churches as Not for Profit Organizations is controversial. Historically, churches were in fact funded by the governments of different states, meaning that church costs were paid for by taxes that had been paid in to the government. This is typically no longer the case, although in some areas churches can still apply for government grants to help support their purposes. People who are opposed to churches having tax exempt status cite the fact that religion is no longer as common as it is, and that there is an aim from a lot of people to have a separation of church and state – meaning that the government should not support any one religion, and religion should not impact on laws the government makes. This is a particularly fierce debate in modern years when Christianity is only one of the many religions in the USA, even though it is still the most common religion.

Another reason that the tax exempt status of churches is in dispute is because of the vast personal wealth of some church ministers. Debates about whether leaders of Non profit organizations should be wealthy have persisted for years, but the issue is even more hotly debated about churches, where typically many sections of Christianity have preached views against hoarding wealth.

How do churches use their money?

Now that we know where churches get their money, it is also worth looking at how churches use their money. This is another question with a lot of answers, so let’s look at some of the most common ways that churches spend their income.

Bills and expenses

It should be pretty obvious, but one of the major ways that churches spend their money is on bills and expenses. Like most other buildings, churches need water, electricity and heating, which still has to be paid for even if for churches. However, there are other expenses such as a minister’s salary that can overshadow this. Sometimes churches even consider the living quarters of ministers as their expenses – after all, ministers work primarily to keep the church going and to preach their religion to their church members. However, the salaries of ministers vary wildly – a small church may not be able to pay its minister very much, while a megachurch might have a very healthy salary for its preachers. As well as this, if none of the church members are particularly good at financial mathematics, the church will probably have to hire an accountant to keep track of all their incoming and outgoing monies.

Maintenance and upkeep of Church property

As we’ve already mentioned, fixing holes in church roofs is used as a trope in television shows when churches try to do fundraisers, but this is one of the ways churches have to spend money – on maintaining and fixing church property. This includes everything from cleaning – which might be done by a member of the community for churches who can appeal to the good will of their congregation, but it may be outsourced to a cleaning company – to rebuilding sections of the church that suffered damages. While it might seem that the day to day expenses of maintaining to church would not be too expensive, it is important to remember that churches can be large buildings and simply buying cleaning products, lightbulbs, and other sundry items can add up over time, and without a healthy income, these expenses could be a heavy burden. When windows, seats, and toilets need to be replaced, this is a large expense.

Community projects

As we’ve already mentioned, most churches are non profit organizations – this is usually because churches are set up to do some kind of good works in the community. This can include a wide range of activities, including outreach aimed at youths, people facing poverty, people with mental health problems, the elderly, and more.

Some of the most common community projects that churches undertake are:

  • Food banks
  • Swap shops
  • Bereavement support groups
  • Loneliness support groups
  • Youth groups

Of course, there are still some ways that churches can use these groups to feed back in to their income. For example, loneliness support groups for elderly members of the church can include baking days or knitting days, and the cakes and jumpers made can be sold by the church during their next fundraiser or family fun day. While this might not add a huge amount to the church’s income, it can at the very least help to make these projects a net-zero activity for the church, helping them focus their profits elsewhere.

Do churches really buy private jets for their preachers?

Probably one of the most talked-about rumors of church funding is the fact that some church ministers have private jets. It can seem strange to some people that religious organizations, which largely rely on donations from generous parishioners, are able to buy private jets. There have been cases where televangelists have bought private jets, and not everyone agrees with this. However, there is a large argument for the fact that, simply put, time equals money. A lot of people in positions of power or very well-paid jobs actually find it more profitable to have a private jet, as this saves them time that they would otherwise lose due to check-in and boarding wait times at commercial airports. However, opinions on this are likely to remain divided for a long time.

Final thoughts

Churches are a huge part of the country, even for people who are not religious – there is no avoiding the church buildings that dot our landscape, from countryside to cities, and no escaping the amount of religious marketing that happens on posters, bumper stickers, and TV. However, the inner workings of churches are not well known to a lot of people, and it can be fascinating to look at how a religious organization makes its money. Of course, everything we have listed here is only a small look at some of the more common ways that churches make and spend money. There are still many facets that have not been touched here, because every church approaches the issue differently, and because every church will have a massively different church budget, related to their physical size and their congregation size.

As well as the interesting issue of how churches make money, their tax exempt status is an issue of major debate, across the US and the world. There is no obvious end in sight for this debate, but looking at a church as a non profit organization adds a new interesting factor to the way they get revenue.

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