Church is big business.
That’s tough to stomach for some. It’s tough for those who grew up in church, tough for those who love church, and especially tough for those who make their living from church.
I’m a labor economist, which means I make my living studying the economy, the labor market, and business.
Through this lens, it doesn’t matter that 98 percent of churches are non-profit. What matters is that churches go about their business…like a business.
I need to share some data with you. I hope you’ll bear with me, because it’s the only way I know how to begin the conversation about the big business of church…and why that’s bad for church business.
Data from the U.S. Census Bureau reveals that over 184 thousand religious establishments conducted business in the United States in 2014. These establishments employed more than 1.68 million workers and paid over $34.6 billion in wages.
Religious establishments – a business classification of the North American Industry Classification System (NAICS) – contains mosques, monasteries, and temples as well as Christian churches and other places of organized religion. These establishments are all part of NAICS 8131; the religious organizations industry.
While the industry classification contains all houses of worship, the overwhelming majority of religious establishments in the U.S. are churches.
And churches need a staff.
Church Staff Consume a Great Deal of Church Budget
The bulk of the average church budget (82%) is spent on business operations according to a report by the Evangelical Christian Credit Union in 2013. Data from the report shows the following budget breakdown; employees (58%), administration (6%), and buildings (18%).
A 2009 report by Christianity Today suggests a smaller expenditure overall (72%), with a slightly different distribution of church revenue; Employees (38%), Administration (8%), and Buildings (26%).
And another more recent report (2014) by Christianity Today – focused on 727 mega churches – suggests that between 39 and 52 percent of church budget goes to staffing costs. This report also finds the strongest influence on the dollar value of pastor salaries is church size (budget and attendance).
The Price of a Pastor
Pastors are classified in the occupational group clergy, which also contains chaplains, priests, rabbis, reverends, preachers, and imams along with other religious leadership titles.
In 2014 there were over 244 thousand Clergy in the U.S. with a median salary of $44,250 according to data from the U.S. Bureau of Labor Statistics. The 10 percent at the bottom of the pay scale made $22,380 or less, while the 10 percent at the top made $77,220 or more. Preacher pay also varies by location with high-end clergy found most often along the east coast, west coast, and in the southern states.
Pastors spend a great deal of time and money learning how to run a church business. While some pastors have only a high school education and some have even less than that, the minimum education level for a pastor is considered to be a bachelor’s degree. However, roughly 50 percent of pastors hold a master’s degree or higher and about 35 percent of pastors hold a bachelor’s degree.
Many Christians would argue that pastors are paid too little for their effort since the median salary for pastors is less than that for all bachelor’s degree holders ($57,252), and is far less than the median salary for advanced degree holders ($72,072).
You Made it
Take a break. We’ll talk more soon.
In the meantime, think about this:
The problem with running church like a business, is that you have to run church like a business.