Historically, the “men of the cloth” were community organizers. They were caring motivators who spent most of their lives serving and providing resources for their communities. They would assist total strangers with securing housing, food, and employment. They’d run to the hospital to pray for the sick. They would visit with the shut-ins and serve communion. They would christen babies and new homes. They would perform weddings and funerals. They’d be there through generations of families. They knew the very intimate details of their congregations. They watched over their flock in every way with very little reward. Most church leaders received very meager salaries. It was typically barely enough for their families to live on. For many church leaders today, those were the days of old. The faith-based sector has made tremendous strides in securing wealth via multiple streams of income.
Many people are finding creative ways to profit from the faith-based sector. Unfortunately, the few who are corrupt have tarnished the image of those who toil on a daily basis to uplift, encourage and inspire their communities as well as provide resources in various areas to include food, clothing, housing, healthcare, employment, and education. Some reasons the faith-based community gets a bad rap is due to the appearance of wealth accumulated by the leaders while the constituency appears to never advance, but are content suffering while boasting to their friends about the accomplishments of their fearless leader.
Nicholas A. Smith, Assistant Pastor, Bethany Baptist Church in Lindenwold, NJ explains, “All churches should practice good stewardship; it’s God’s money. It should not be wasted. They should pay all church bills and make sure the staff is taken care of. [They should take care in] hiring the right people. It costs money to fire people. They should help people that are in trouble. The church should take care of its people and have [savings] put aside. We should practice what we teach people. Some people are adverse to the church making money. How can we function without generating money? We need to operate as a business; the government requires that. We [Bethany] are a 501©3 organization.
It seems that ministers are separating their finances from the church. While they may or may not receive a specified salary, they earn other income streams through an established ministerial organization of the same name as the minister. Further, the ministries organization will embody several businesses to include conferences and events. They operate as a nonprofit or for-profit organization, running comprehensive fundraising campaigns, conducting direct mail campaigns and the like. Their speaking engagements may also funnel from this organization. The revenue from speaking engagements comes in the forms of “love offerings” taken for the guest speaker, honorariums (prior agreed amounts), additional benefits (i.e.: air fare, hotel accommodations, ground transportation, meals, entertainment), and sales from products (DVDs, CDs and books).[i]
These ministries organizations may utilize the resources of the church i.e.: administrative staff, church members as volunteers, church computers, printers, phones, etc. The ministries may also manage the sales from books, CDs and DVDs of sermons, radio shows, television programming, conferences, T-shirts and other merchandise. Further, many of the leaders’ businesses are solicited solely or predominantly to their flock. Typical businesses church leaders run include bookstores, counseling, gyms, supermarkets, building firms, music festivals, music studios, business coaching services and real estate firms.[ii]
Acknowledging that church leaders and gospel recording artists are forming ministries, Smith says of those who have their own ministries, “I’m an employee of Bethany. The ministry is a separate [entity]. If I decided to write a book, that’s on my own. People set up side businesses. It can be a nonprofit or a for-profit. For example, a real estate company can have several subsidiaries. Nicholas A. Smith Ministries would be the parent company: books, speaking engagements, and an after-school program would be subsidiaries. People do this for legal purposes and insurances. It’s easier to keep some things separate. It reduces the incidents of comingling of funds. Another example that I like to give is Michael Jordan has his own brand and all of the separate businesses are under that. Not every pastor is taking from their church. They have businesses outside of the church. Most of today’s pastors are entrepreneurs.”
Churches, particularly in the African American communities, make money primarily from collecting tithes and offerings. In fact, the church raises over 70% of their funding from individual donor solicitation. Members give consistently to their churches. Decades ago, however, the church also made additional income from the many events and activities that were held in the church. Almost every other week, you could be assured there was a reason to dress up and go back to the church: the Pastor’s Anniversary Dinner, choir anniversary, Usher Board anniversary, scholarship fund luncheon, children’s play, building fund breakfast, and the like. Further, every committee sold tickets to the members of the church. Thus, members would buy tickets for fundraising events year-round. Smith elaborates, “The church was the staple in the community; all African American people had was the church. Now people have other things. People are exposed to much more. Everything is on TV; the internet has everything.”
Smith continues, “Now our attention span is much shorter. There was a study that says every 6-7 minutes people need something else to stimulate them. We used to have Joy Night and the church would be packed. Now, hardly anyone would come. Churches have to change with the times. Churches that adapt well to change have CDCs, senior housing, and after-school programs. One church [I know of] has a strip mall and a housing development and actually owns the land. We have to learn how to draw income from these opportunities and serve the community at the same time. For example, low-income housing accomplishes this. We have to be meeting the needs of the community and being good stewards at the same time.” Further, tax regulations are ever-changing. Churches report in the same manner as all nonprofits. Smith explains, “We have to be big on where all of the money goes. We [are heavily scrutinized and] have to get this right because of those who have taken advantage.”
Church founders are typically reluctant to change. Smith says, “Church founders can be successful if they’re open to change. They’re not going to live forever and they have to raise a successor. They feel it’s their baby. They grew the church. In many cases, they’ll just die off and the church has to scramble to try to replace him. A pastor has to be secure enough to want to train someone. Bishop [David G. Evans] is secure; I know he’s the Pastor and he’s always going to be the Pastor.”
There has been a shift in the level of services that churches provide their members and communities. The church was more focused on making provision for basic needs. Smith explains, “We still give clothes and food and teach financial security and we’re very big on entrepreneurship. The church now-a-days is really more about empowerment. Let’s make sure you can stand on your two feet. Years ago, it was about survival. They were in survival mode. After civil rights we stayed into survival mode when we should have shifted to the empowerment mode. Now, [the church attempts to position its members to] making a five year plan.”
On race, Smith comments, “African Americans’ needs are different [from other cultures]. We have to go to the basics, like having a life insurance policy. Most oppressed people are project-minded; they can raise money to get a van but not [set] long-term [goals]. [They focus on] immediate things that satisfy us right now. We have to approach [those with that mindset] differently. African American churches are more leadership driven. We have to meet our needs. We [Bethany], on the other hand, have many cultures in our church. Thus, we focus on the universal needs of all cultures. At one time, we thought we had to separate members by age, but we’ve learned the gospel speaks to every age group.”
Smith speculates, “The economy has negatively affected the churches all over the country. For most churches, giving is down around 30 to 50%. Most people are cutting back on their charitable giving during this hard [economic] time. Many churches had to lay off staff and cut back on essential programs that helped people. The needs of individuals went up but the resources of the church went down. The economy has put the church at large in a tough situation.” He speaks on the future of the church, “The future of the church is successful. Jesus says that the church is built on Him and not us. History is on our side! The church has made it through persecution, economic downturns and many more. This recession will pass and God’s house will be ok.”
Master your hustle.