American Megachurches: Finances

No church leaders will be surprised to learn that contributions in megachurches are essentially flat from 2005 — even a little down when adjusted for inflation — meaning that more churches are feeling the pinch. Even the largest churches have been affected by the overall economy.

More surprising, at least to me, is how they spend their money –

They spend nearly half their revenues on salaries! Half! You’d think that as the churches grow they could spend less money on staff, percentagewise, but this is about the same as for a much smaller church.

The old rule of thumb is that you need about 1 full-time minister per 150 members. Evidently the rule remains true even as the church gets very large indeed.

Of course, size has a way of producing dis-economies in personnel. If you have 2,000 teenagers, you not only need enough youth ministers to keep up with all those kids, you need middle management to keep up with all those youth ministers!

It looks like we’re never going to get away from that big-ol’ salary line item.

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About Jay Guin

I am an elder, a Sunday school teacher, a husband, a father, a grandfather, and a lawyer. I live in Tuscaloosa, Alabama, home of the Alabama Crimson Tide. I’m a member of the University Church of Christ. I grew up in Russellville, Alabama and graduated from David Lipscomb College (now Lipscomb University). I received my law degree from the University of Alabama. I met my wife Denise at Lipscomb, and we have four sons, two of whom are married, and I have a grandson and granddaughter.
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10 Responses to American Megachurches: Finances

  1. Alan says:

    The only two uses of church money I can think of that are explicitly taught in scripture are benevolence and staff. Of course that doesn’t necessarily imply a 50-50 split… and it doesn’t necessarily rule out other uses.

    I think 1 Cor 3:10-15 applies here. Church leaders have discretion, but are also accountable to God for the results.

  2. Ben Wiles says:

    I noticed the other part of the chart — megachurches spend almost as much on “buildings and operations” as they do on missions, benevolence, and church programs combined.

    One wonders if a “staff time” pie chart might show a similar ratio.

  3. Jay Guin says:

    Ben,

    Your point is well taken. We spend a lot on buildings! I’m glad to see that many churches have gone to multiple services in an effort to keep this under control — http://oneinjesus.info/2008/09/20/american-megachurches-multiple-locations-and-multiple-services/.

    I think the trend toward multiple sites helps, although not as much, as many sites are rented. And multiple sites can sometimes be less expensive than building really large buildings, especially when you’d otherwise have to sell your old building, usually at fire sale prices.

  4. Joe Baggett says:

    I don't see any "staff" in the NT. Paul was a traveling missonary not a paid local preacher. He wa the only one that it records was paid, and then only a part as he used his trade as a tent maker also. There is a big difference between the two. I would like to see a congregations do what the church in Acts did, first see to it that no one among there number had need.; Then look after the orphans and widows.

  5. Jay Guin says:

    Joe,

    There are churches that do this. All the ones I’m familiar with operate on a house church model, which makes sense as house churches break the church into small enough units that part-time leaders can do what needs to be done.

    However, the experience of church plant teams, in multiple denominations, is that church plants without full-time staff rarely grow very large — even if they pursue a house church growth strategy.

    My own experience is that as our church grows larger, we need more staff. As someone said to me a long time ago, “If your church is led solely by part-time volunteers, it’ll grow only as fast as part-time volunteers can lead the growth.”

    Speaking as an elder, the elders just don’t have the time to do what the staff does — no matter how many elders you have. We have jobs.

    In short, I think the only way to operate effectively without full-time staff is through a house church model — and you’re going to have to have some gifted leaders to get such an effort going. It’s being done, but in the American culture, these efforts nearly always stay small.

    On the other hand, it may be that house church efforts require less staff than the traditional church-in-a-building model. It wouldn’t surprise me.

  6. Joe Baggett says:

    Alan:

    I agree 100%.

  7. Alan says:

    > Speaking as an elder, the elders just don’t have the time to do what the
    > staff does — no matter how many elders you have. We have jobs.

    That’s generally true in today’s churches. I doubt it was true in the early church. Rather, I suspect that the elders *were* the staff. I think the average city with a substantial-sized church had full time elders.

  8. Jay Guin says:

    I’ve been fiddling with the numbers. Imagine a church with an average household income of $80K. They “tithe” on average 5%, or $4K. To support a minister at the average income of the church members, you’d need 25 families worth of support ($100K = $80K plus fringes of $20K).

    If the average family size is 3, then you need 75 people to support one minister. For no more than half the budget to go to salaries, you have no more than one minister per 150 members.

    Or, put another way, if a church hires one minister per 150 members, about half the budget will go to salaries and fringes.

    To get a better ratio, you must either —

    * Give more than 5% on average,
    * Underpay your staff, or
    * Hire inexperienced ministers who don’t cost much

    Or, of course, do without so many ministers, but I don’t think it’s realistic for a growing church.

    On the other hand, what I think also happens is the large churches pay ministers very well but they hire a bevy of clerical help — secretaries, bookkeepers, etc — so that the ministers concentrate on ministry and lower-paid staff handles the typing and bulletin design.

    If a church doesn’t do this, then as the ministers age, they will either become too expensive or leave to gain higher pay elsewhere. The only way to keep the ministers affordable as they gain experience and years of seniority is to delegate as much of the work as possible to non-ministers.

    But my experience is that elders tend to see secretarial help as optional, and they try to save money on clerical help, leaving the ministers to do their own typing and filing. The result is to have someone paid 2 or 3 times what a secretary would cost doing secretarial work, while the church complains that the minister doesn’t do enough ministry.

  9. Ben Wiles says:

    "If the average family size is 3, then you need 75 people to support one minister."

    Not necessarily.

    By this estimation, fewer than half of Churches of Christ in America can afford even one minster, since they have fewer than 75 members. Of ministers working in Churches of Christ today, probably around half are full-time preachers for congregations under 75, and more than half of those for congregations under 50.

    The math is strong, but the conclusion is not supported by the evidence.

  10. Ben Wiles says:

    P.S. I hope I'm not coming across as some kind of mega-church-o-phobe. I'm just a stats guy, and throwing numbers at me is like parading a slow-moving gazelle through a lion's den. I may not be hungry, but sometimes I just can't help myself ;-)

    Of course, you know what they say about statisticians: Good with numbers, but lacking the people-skills to make it as an accountant.

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