The Cost of Running a Church

Dear Pastors

The Cost of Running a Church

Tithes and Offering income for many churches is under severe pressure and has been a growing problem for many years now. This has been accelerated by:-

1. Covid-19. Many churches in NZ experienced a decline in attendance that hasn’t come back to pre C-19 numbers. Invariably when people leave (or stop attending) their money leaves.
2. Cost of Living. The current cost of living crisis is causing ‘mortgage stress’ left right and centre. This means some( if not many) Christians will have to cut back on their giving.

If a church employs a full time pastor/minister/vicar then it will need on average $150,000 to meet all operational costs.

Here is a fairly typical scenario:-

Notes:

1. The ‘batting’ average salary package for a F/T pastor in NZ now sits between $85K and $95K. For many small churches this figure creeps up to 65% or even 70%.
2. This is a modest figure. As most churches have their own buildings and rent out some space it is very common for some building costs to be ‘off-set’ by some rent income. That said we now know that there are literally hundred’s of church buildings in NZ that have significant deferred repairs and maintenance costs outstanding.
3. This assumes a church ‘tithes’ to missions from its general tithes and offering income.
4. This leaves $30,000 for all other expenses that are needed to ‘run’ a churches ministries and programmes.

In this scenario there is no provision for any paid office/administration support.

Last week I had a random look (Charities Commission) at the financial reports of three churches in different cities in NZ that have an average attendance of 118, 140 and 90. All three recorded a deficit last year of $9K, $32K and $52K. The percentage of the tithes and offering income that was allocated to ‘staff costs’ was $75%, 58% and 85% (in the same order as above).

There is no doubt that the cost of running a church along traditional lines is increasing and offering income is not matching this increase. For many churches of under 50 it is already to high resulting in pastors going bi-vocational, or mergers or closures. When around 70% of churches in NZ have under 100 people (this includes children), it is now a huge challenge to employ a pastor full time at around that $90K figure per annum.

Needless to say, this has huge implications going forward. One thing it is already doing is ‘forcing’ churches to look at the way we do church and the models we have worked with for a very long time now. In an up coming blog I will share a few examples of some innovations in this space. In the mean time I would love to hear how you are navigating this cost escalation challenge.

Blessings
Alan