Home > Current Events, Numbers > The Grassley staff report: 50/25/25

The Grassley staff report: 50/25/25

I realize there are readers who might reasonably think I’m beating this Grassley thing to death, but I think it’s the gift that keeps on giving. One section of the report tries to get a fix on the scale of the money handled by megachurches and/or “media ministries” with no real balance sheet transparency (due to the fact that there are no Form 990 requirements) and no external oversight:

This lack of governmental, independent or denominational oversight is troubling when considering that churches can reach the size of large taxable corporations, control numerous taxable and non-taxable subsidiaries, and bestow Wall Street-size benefits on their ministers. The 2005 megachurch survey found that there were 1,210 megachurches (i.e., Protestant congregations that draw 2,000 or more attendees in a typical weekend) in the United States, nearly double the number that existed five years earlier. The survey also found that average annual expenditure of a megachurch in 2005 was $5.6 million. A follow-up study conducted in 2008 found that average megachurch income in 2008 was $6.5 million. Generally, fifty percent of income went to salaries, a quarter to buildings, and a quarter to missions and programs.  (pages 30-31)

Let’s just note that the “2000 Protestants” is a restriction of convenience; in many ways churches of 1900 or 2100 people are virtually the same, and the term “Protestant” here is a grab-bag term meaning “not Roman Catholic,” mostly because there just aren’t any non-Christian church-like groups drawing 2000 people on a weekly basis with megachurch-like buying power.

I probably should mention here that it is in this part of the document that the Grassley report comes closest to Establishment Clause trouble, because it is suggesting that it is the independence (read: lack of denominational affiliation) that makes these church organizations troublesome. I’d hate to see the final recommendations from this process suggest that of the 1400+ churches on the Hartford Institute list, only those with particular affiliations need to find some ECFA-like body to approve their balance sheets or face losing their 501(c)(3) tax-exempt status.

Anyway, if we roll the megachurch count forward to today’s list and leave the dollar figure at its 2008 level we end up with an aggregate of more than $9 billion tax-free dollars being handled annually by Hartford Institute churches. That’s a substantial amount of money for there to be no external accountability.

Finally, the last figure is of particular interest. Of that $9 billion total half, or $4.5 billion, is spent on salaries, $2.25 billion on facilities, and $2.25 billion on everything else. I might gently suggest that as Christians we’re getting a poor return on our investment if only a quarter of every dollar is actually spent on ministry. No wonder the modern megachurch doesn’t feature foreign ministries as prominently as the small independent churches I attended in the Seventies.

I’m tempted to take this 50/25/25 as sort of a pass-fail line, meaning that churches that spend 50% of their money on salaries are overspending, etc. But it seems kind of outrageous in and of itself. I’m not sure I’d be comfortable (for example) writing two checks to my local church: half to the church and half directly to the pastoral staff.

It also suggests to me that there may be no economy of scale for churches, if small churches and large churches alike are following roughly a 50/25/25 breakdown.

Of course, and this is the point of the Grassley staff report, it’s hard to know if you don’t know how your local church is spending the money it receives.


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