the business of church
It is not easy to lead a church. In addition to all of the ‘ministry’ of the church (i.e., teaching, discipleship, worship, evangelism, care ministry, etc.), the church does nearly all the same functions as a business. For example, churches:
provide services to members —> operations
communicate internally and externally —> communications
manage money —> accounting and finance
buy goods and services —> procurement
manage staff and volunteers —> human resources
use and manage technology —> information technology
comply with laws and regulations —> legal and risk management
As a result, church leaders spend a lot of time and energy ‘running' a church. On average church leaders spend roughly fifty percent of their time on administrative tasks.
However, there are two differences. Although the church does all the same functions as a business, church leaders are not trained on the business of church, and church leaders do not have the same time and resources to support administrative functions as a business.
Regarding training, in Not Your Parents Offering Plate: A New Vision for Financial Stewardship, J. Clif Christopher says “[although] I had completed three years of graduate education to be a minister in the church, no one had taught me one thing about money - how to raise it, invest it, or manage it” (xviii). In Smart Church Finances: A Pastor’s Guide to Budgets, Spreadsheets, and Other Things You Didn’t Learn in Seminary, George Hillman and John Reece, note how church leaders “do not learn business management techniques in a Bible college or seminary classroom. Many of our brightest graduates leave with the best biblical training possible yet struggle in ministry because of all the “business stuff” [like managing] personnel conflicts, poor hiring choices, financial mismanagement, strategic miscalculations, lack of supervisory skills, and just knowing how to manage people” (4).
Additionally, church leaders do not have time or resources to support administrative functions. Church leaders as pulled in all different directions; there are a lot of competing priorities. As noted earlier, in addition ‘ministry’ church leaders are expected to perform all the functions of a business with less resources than a business. Where a business generally has a staff and budget to support administrative functions, many churches rely on part-time staff or volunteers to manage the church; a church is lucky if they have a full-time Administrative Assistant, Church Administrator, or Executive Pastor.
So all-in-all, it is not easy to lead a church.
The problem is not about training, time, or resources. The problem is that church leaders try to manage their church the same way they run a business (or even a nonprofit).
For example, financially, a lot of church leaders focus on balancing the budget the same way a business treats hitting revenue forecasts and managing expenses. According to Michael Batts, CPA in Church Finance: The Church Leaders Guide to Financial Operations, “many churches operate under the belief that there is something improper about generating positive bottom line - that is, surplus of revenues over expenses. In fact, in many churches a desirable budget is a “balanced budget.” (8) However, Batts argues that a “balanced budget” approach leaves “little to no room for error [as] an unexpected dip in revenues can cause immediate financial stress.” (8). Additionally, as Christopher notes, unlike a business, “[the church] is not in business to balance budgets or manage money. [The church] is in business to change lives for the sake of the gospel of Jesus Christ” (13).
Which brings me to an important paradigm shift: There are ways the church is similar to a business and there are ways the church is different. For church leaders, it is important to know the similarities and differences between running a business and leading a church.
Here are a few examples.
The church is similar to a business because the face similar challenges around growth, change, and governance.
Growth - All businesses need to grow and expand by constantly finding new customers, expanding their territory, etc. Churches also need to grow by finding new members, reaching new communities, increasing contributions, and increasing participation, etc. A church that does not grow will not last very long.
Change - Businesses develop new products, find efficiencies that saves time or money, and adapt to challenges (like budget constraints) that inevitably come up. Churches too need to try new programs, upgrade technology, and rotate leadership positions periodically. Just as businesses who say, “that’s just what we do around here,” are destined to fail, so are churches. Healthy churches change; unhealthy churches do not change.
Governance - Businesses need strong governance, oversight, and accountability to support good decision making. On a long enough timeline there is no good decision making without good accountability. The same is true for churches.
The church is different than a business or a non-profit because of how they define themselves. Generally, a business defines themselves by four things:
Goods and Services - A business is defined by the goods and services it provides in exchange for money (i.e., plumbers, carpenters, banks, retailers, etc.). The church is not defined by the services it provides because they are not providing those services in exchange for money. Tithes and offerings are not payment for spiritual goods and services.
Competition - Business who provide similar goods and services compete with one another for customers (i.e., Nike vs. Adidas, Amazon vs. Wal-Mart, and Google vs. Apple). Churches do not, or better said should not, compete with one another.
Profit - Businesses attempt to maximize profit for the owners. In fact, there are some people who say, “businesses only exist to make a profit,” and “an unprofitable business is not a business, it is a hobby.” While it goes without saying that the church does not exist to make a profit, and not just because of their legal status as a 501(c)(3) not-for-profit, the church is not defined by their budget at the end of the year.
Ownership - A business has owners and businesses attempt to maximize profit for the owners. In the business world, there are different legal structures (sole-proprietorship, LLC, C-Corp, etc.) to define ownership and liability for the business, essentially who owns the company and who is entitled to the profits. But who owns the church? Just as the church does not make a profit, the church does not have an owner.
The problem I see with church administration is not time, money, resources, or even training. The fundamental problem is that church leaders try to manage their church the same way they run a business.
They try to grow the same way a business grows. They struggle to change. They govern themselves the same way a business do, if they do at all. But growth, change, and governance should look different in the church than in a business. The challenges facing churches and businesses may be similar, but how leaders address those challenges is different.
Additionally, they define themselves the same way a business does. They market themselves based on the services they provide (i.e., “we are a family-friendly church with a great children’s ministry” or “we are a biblical church with strong teaching and discipleship”). They compete with, rather than cooperate with, other local churches (some of whom may be within half a mile). They prioritize balancing the budget over pursuing ministry opportunities. They argue about who is in charge and who has authority to make decisions. But the church is not defined by the same things as a business; rather the church gets its identity from God.
Ultimately, leading a church is different than managing a business. In many ways, it is more complicated. For church leaders, it is important to know the similarities and differences.
References
Church Finance: The Church Leader’s Guide to Financial Operations by Michael Batts
