A non-profit church starting a for-profit business? Your first thought after looking at the title might be, “Wow! Another greedy minister whose sole focus is making more money to buy another Lexus.”
I promise none of the reasons listed below come from greed.
You see, at The Borough, we value innovation. And starting a for-profit is another way for the church to look ahead into the direction of our culture, and adapting as needed. This article is part of our Innovate Series.
Things are changing, and we really can’t do church the way we always have. The middle-class is changing; America is no longer a Christian majority; people are wanting different things from church in general; and self-enterprising ministers are becoming more and more necessary.
This has implications for our entire fund-raising strategy as a church.
I’m suggesting that a church open up a coffee shop, a clothing store, a furniture market, a consulting business, a property management business or any other entrepreneurial enterprise under the umbrella of its 501(c)3. Tax-wise, it can be done legally, even though it is a bit complex.
Look at the reasons below, and consider whether your church should start a for-profit business:
Churches Are Going to Lose Non-Profit Status
General opinion is changing about the church. People are beginning to say that churches don’t deserve non-profit status.
It used to be a trade-off. The government knew that since it was supposed to serve the city, the church’s philanthropic efforts were an equivalent to tax monies which would have otherwise been used to take care of its citizens.
Today’s churches hardly ever consider this, and their monies toward caring for the citizens are often minimal or non-existent.
Non-Christians are accurately recognizing this. And they’re calling for churches to lose tax-exemption status.
Starting a for-profit is a way to get in front of this. Creating a stream of revenue for the church before we have to start paying taxes will allow us to be able to absorb the offset of the cost of taxes.The #Church is Going to Lose #NonProfit Status. Click To Tweet
A For-Profit Can Fund a Good Works Foundation
(It’s appalling, I know. Jesus said to do it, plain and simple. We should be doing it, plain and simple.)
The thing is, most churches like the idea of doing good for the city, but often can’t afford it. Admittedly, this is often because churches are unwisely spending their money on unnecessary things like bigger buildings and more expensive furnishings.
But even when you’re spending money the right way, it is always nice to have a larger amount of money to use to take care the community.
Starting a for-profit can give you access to that revenue and can be structured to flow into a foundation. Use a foundation like this to take care of the city.
Business Gets You in the Community
If nothing else, a business which truly serves the community, will allow you to meet all kinds of new people. You’ll meet customers, clients, vendors, other local business owners, and more.
And these will be a whole new population than the people who were just coming to your church.
It’s just a larger community to which you will be able to show the love of Christ.Self-enterprising ministers are becoming more and more necessary. #entrepreneur Click To Tweet
Use a For-Profit as a Ministry to the Community
Check out this for-profit business which was started by a church – Seed Restaurant.
They hire prostitutes, ex-convicts, and homeless, as their employees. It offers them opportunities to make an income, grow in their skills and leadership capabilities.
And at the same time, they offer courses to establish them in their faith.
This is a true ministry to the community, and it is possible because of the for-profit restaurant they started.
Churches are Becoming Smaller, Relationship-Based Communities
The trend is that people are recognizing the outlandish spending of large churches, and they don’t like it.
But it’s not just the spending.
In the eyes of church members, there is hypocrisy when they say that there should be close relationships, but no one can possibly know all 3,000 people at the church.
When they say to love your neighbor, but the church is doing nothing to help the community.
When they say the accept people where they’re at, but it becomes apparent that it’s just a ploy to get people in the door.
Unfortunately, the trade-off is that smaller groups mean smaller amounts of revenue from donation. It’s just a simple fact.
Starting a for-profit will allow you to make up for the lost income when you decide to do church the right way – the making-disciples-through-relationships way.Do #church the right way - the making-disciples-through-relationships way. Click To Tweet
Also published on Medium.