No Offerings? Here’s What to Do

Written by Laura Archambault on Jun 01, 2021 in Church Management

Read Time: 4 minutes

Pastor Jamal scanned the church financial report. It was red. Offerings had been down for a while.

Inheriting church finances like these, he could have been afraid. But he had faith, and he had experience, so he knew better. Before answering the call to pastorship, Pastor Jamal had spent years in corporate management. He was a savvy businessman and knew what to do.

Because churches are primarily concerned with ministry (as they should be!), they can struggle for years with low offerings and tight budgets without realizing there’s another option.

The tax code actually allows 501(c)(3) tax-exempt organizations to own a business and reap the benefits of owning these businesses. Pastor Jamal wasn’t afraid of the ever-decreasing offerings because he was already floating a dozen business ideas that could provide income for the church.

If this sounds like a dream come true, keep reading to learn what it takes for you to start a church or ministry-owned business. It’s worth the read. You may be able to provide the funds for your God-given ministry without relying on donations.

Why Start a Church-Owned Business?

Many pastors and church leaders are unaware that the tax code allows a 501(c)(3) tax-exempt organization to own a business and to reap the benefits of its profits.

At StartCHURCH, we refer to a church or ministry-owned business as a for-profit arm. It’s legal if done correctly, but is it biblical? Shouldn’t we trust God as our source of income rather than trying to generate it ourselves?

You’re probably already remembering our beloved Paul, the tent-maker. He knew that servants of God were entitled to receive provision, as an ox is allowed to graze while he works, but CHOSE to provide his own income so nothing would hinder the gospel. If you want to do ministry in a poverty-stricken or unchurched area, it may be prudent to do the same.

A business is also a great outreach tool.

Pastor Jamal already knew that the young men gathered every Saturday night at Oakson Park for basketball. This was a demographic his new church had tried to reach for years without success. He envisioned a food truck serving these hungry men. The food truck would be the perfect way to build relationships and open the door for ministry.

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How does it work?

If you need to decide if a for-profit arm is right for your church or ministry, it’s time to do your homework.

1. Learn how a for-profit arm works

2. Learn business basics

  • If you or your church leadership has no direct business experience, learn before you commit. Online courses may be enough to get you started.
  • Once you learn the basics, you may still benefit from hiring experienced business leaders. A church-owned business does not have to be staffed by the church. You can hire people with the skills you lack.

3. Find a profitable idea

It’s basic, but make sure your goods or services are valuable enough to a consumer that they will purchase at a net profit for you. Consider the community needs/values. If your community is your target market, make sure the idea can profit within that target market.

4. Set up your for-profit arm

  • File articles of incorporation with your state
  • Remember any relevant business licenses! You can be shut down if you do not follow legal requirements for businesses in your state.
  • The church/ministry initially funds the business and receives ownership by purchasing majority shares.
  • Receive dividends and donations from the church-owned business! While the business must pay taxes, the dividends and contributions received by the 501(c)(3) are tax-free!

        It’s Time to Dream without Fear of Low Offerings

        Instead of being crushed when he discovered the offerings were lacking, Pastor Jamal was filled with confidence and peace. And with his skill set, he wasn’t limited to a food truck. He could have chosen a landscaping company, training and mentoring the employees. He could have opened a manufacturing plant, providing hundreds of jobs in a community that desperately needs it.

        There are so many ways for 501(c)(3) organizations to take advantage of this incredible opportunity granted by the IRS. Imagine having the financial resources to fund the ministry you’ve been holding in your heart.

        Want to know more about godly entrepreneurism? Whether you’re bold and ready to get started or timidly curious, StartCHURCH can help you take the next step. We have resources and support to help you navigate from incorporation* to managing your business. If you want to learn more about this innovative method for funding your ministry, you can schedule a call below at any time. We love hearing about God-given dreams!

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          *StartCHURCH provides clerical assistance to help you process your own articles of incorporation and prepare your own bylaws. StartCHURCH does not provide legal advice.

        Please feel free to comment. We always appreciate good dialogue. However, we do moderate each comment to ensure that it is on topic and not derogatory to other participants. We ask that you keep your comments brief and pertinent to the topic so that others may benefit.

        Blessings,
        Raul Rivera


        And receive Book 1 of our Grow Trilogy FREE today! This series gives you the strategies you need to get started growing your church plant today!