With Millennials and Gen-Z increasingly eschewing religion, church attendance is at an all-time low in the United States. Venture capital thinks they can fix that – or at least find some inefficiencies and profit from them.
Big tech entrepreneurs have bankrolled scores of businesses, apps, and cryptocurrencies in the last two decades.
Now the world of faith is getting an influx of cash from investors who think they can disrupt one of the oldest community gathering places: church.
Is it working?
“Christian Shark Tank”
The idea of “church planting” – whereby an established congregation helps financially and spiritually develop a new child congregation in another location under its banner – is not new. In fact, one could argue church planting goes back to biblical times, as the apostle Paul traveled city to city establishing churches as he went. However, he wasn't backed by any investors.
Now, a venture capital group is putting a decidedly 21st-century spin on the whole idea.
The Association of Related Churches (ARC) has created a business around church planting. ARC injects much-needed cash into struggling churches, in exchange for continued cuts of revenue should the church become profitable.
Here’s how it works: when church hopefuls submit their initial applications, ARC begins an intense evaluation process to determine if they're worth investing in. One person who went through this described it as “Christian Shark Tank.”
They perform background checks, collect sample sermons, do a deep dive into the social media accounts (and even the marriages) of church leadership, test their ability to deliver a sermon, and meticulously comb through their finances.
ARC will then ask for a comprehensive brand strategy and a years’ worth of sermons. Should prospective churches and church leadership meet all those thresholds, ARC will then consider a cash investment to get the church off the ground.
A New Type of Worship
One thing likely to be taught once ARC deems a church a worthy investment: how to recoup finances from the flock.
The organization may be genuine in its desire to grow church congregations and spread Christian teachings – but there's undeniably a profit motive at play, too. Like any investors, they're seeking return on their capital.
And that means churches need to make sure members are forking over large sums in membership fees to support church operations... and pay back investors.
TikToker Jeremy Steele, the Skeptic Pastor, breaks down what this looks like from the perspective of a potential new member, and the surprisingly brazen tactics employed by some churches to secure these funds:
Does Venture Capital Belong in the Pews?
Since 2000, ARC has planted more than 1,000 churches and invests millions of dollars each year into new congregations. In return, churches will pay part of their revenue to ARC, whose in revenue is in the tens of millions.
ARC has a wealth of resources church leaders are welcome to use –- and sometimes required to use – to ensure church success. These include training at in-person events, a wealth of internet resources, and private coaching calls. The organization says that 90% of their church plants are still operating after five years.
But ARC isn't the only group doing this. Another organization, Acts 29, similarly offers financial assistance to churches in exchange for a cut of revenue, and reportedly have planted almost 650 churches.
On the one hand, critics say this model of church planting turns the pews into a sort of speculative Silicon Valley VC investment. By making church into a business that employs modern marketing tactics to extract funds from members and return them to investors, it sours the underlying faith message and spoils the organic nature of church membership, critics insist.
"I guess these 'churches' often skip over Matthew 21:12-13, the part about Jesus knocking over money changers' tables," one Reddit user remarked.
But on the other hand, the model appears successful in growing church membership. Considering the historic declines in church attendance shown by recent studies, advocates argue that a change in the playbook was necessary. If that means involving more marketing pizzazz and better business tactics in order to fill the pews, is that really such a bad thing? It's better than watching churches die out, they say.
What is your reaction?
41 comments
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Nicholas J Page
I thought churches relied on the generosity of Public donations as they always have done through out the centuries this dors not seem right to me because all investors want their money back at some point.So i do not think this is a good idea .
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Patricia Ann Gross
Nicholas, Most churches rely heavily on mortgages for building and capital improvements. There are also some special loan rates and grants available through the denominational hierarchy. These are paid back in installments just like any loan or mortgage. I agree that this is hard to swallow as a practice, but some churches have hired consultants to come up with plans to grow or revitalize and paid hefty fees for them, so this isn't very different from that practice.
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Chris
The Church has always been run as a business. That's one of the things Martin Luther criticized. It just isn't always profitable in some areas. This is just about getting butts in seats and dollars in the plate, not about actually spreading any gospel. And yeah, it should be taxed as a business since they're operating as one.
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Daniel Gray
Cant be taxed as Congress already passed the law that exempts them from it. Its called the charities act or the one you deal with when you get a 501.3(c)
If they do what you want then places like Goodwill and the Salvation Army and PBS and others would have to be taxed as well since all of them are run as a business.
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Marilyn
I stand by my belief that Churches should pay taxes just like every other business.
It's a business pure and simple.-
Daniel Gray
And your belief is illegal as federal law says they cant be.
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Lionheart
Yes, let’s hope that eventually changes so that people like Joel Osteen and is religious ilk get to pay their fair share of taxes and stop bilking its deeply indoctrinated parishioners. Fortunately, he’s not making a dime from me.
🦁❤️
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Rev. Mike Eggleston
Laws can be changed.
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Rev. BH
Correct, Mike Have you all been paying attention to our Supreme Court?
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Donald J Rothschild Jr
Since when do you need a building to worship. That’s the problem with today’s religious institutions. It’s all about the money not the message. You want to go and use venture capitalists whose sole interests is making money, fine. Then the church needs to be treated like any other business. TAX THE HELL OUT OF IT!! All its income, all its land and properties, etc.
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Daniel Gray
what part of federal law that says you cant do this seems to escape you?
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Rev. Michael Gerraghty II
Laws can be changed and have been.
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Thomas P. Davis
You are correct on several accounts; first God says He no longer "Act 17:24 God that made the world and all things therein, seeing that he is Lord of heaven and earth, dwelleth not in temples made with hands; Second it is all about money, Richard Wurmbrand made a statement in a book not too long ago that you do not see churches growing today like at the time of Christ. Why because at the time of Christ the church was persecuted and poor. Their multiple homes across the globe, their personal fleet of planes, their gold toilets etc. Today's churches are not persecuted they comprise with the world around them (we don't want to preach the truth and lose those tithe dollars) and they are not poor, 98 cents of every dollar taken in, goes into the church instead of evangelism. As far as 501c3 goes, many do not meet the requirements.
To be tax-exempt under section 501(c)(3) of the Internal Revenue Code, an organization must be organized and operated exclusively for exempt purposes set forth in section 501(c)(3), and none of its earnings may inure to any private shareholder or individual. In addition, it may not be an action organization, i.e., it may not attempt to influence legislation as a substantial part of its activities and it may not participate in any campaign activity for or against political candidates.
Organizations described in section 501(c)(3) are commonly referred to as charitable organizations. Organizations described in section 501(c)(3), other than testing for public safety organizations, are eligible to receive tax-deductible contributions in accordance with Code section 170.
The organization must not be organized or operated for the benefit of private interests, and no part of a section 501(c)(3) organization's net earnings may inure to the benefit of any private shareholder or individual. If the organization engages in an excess benefit transaction with a person having substantial influence over the organization, an excise tax may be imposed on the person and any organization managers agreeing to the transaction.
Section 501(c)(3) organizations are restricted in how much political and legislative (lobbying) activities they may conduct. For a detailed discussion, see Political and Lobbying Activities. For more information about lobbying activities by charities, see the article Lobbying IssuesPDF; for more information about political activities of charities, see the FY-2002 CPE topic Election Year IssuesPDF.
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Danny D. Maynard
Whatever happened to the vow of poverty that religious people were supposed to take? Need I mention the parable of the camel and the eye of the needle?
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Daniel Gray
thats only for priests Maynard...do try and keep it correct.
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James Hage
Vow of poverty Might be for the priests, however the parable is a warning to us all.
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Rev. Dr. Father JJ
seems to me that if a church can't stand on its own merits then it doesn't deserve to exist; clearly it's failing in its supposed mission.
on the other hand, since churches and religion exist to suck money from people who can ill afford it, it's good to see turnabout as fair play. let the VCs pump up the jebus vacuum cleaners, extract as much money as is possible and if their investment fails, it's a write off, if it works, profit, win-win
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James Hage
I am saddened by your comment. You point out that the victims are people who can't afford the losses, and then give your go ahead in the hopes that once they have ruined enough lives they will eventually run out of money and close up shop. That is in no way a win-win, or even a win. People should matter more than money. God did not create churches for profit but to help and inform.
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Daniel Todd Kamm
A Venture Capital Church is just another business enterprise... of course, churches always have been business enterprises, feign to deny it. Okay, fine... tax them!
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Bridget Kielas-Fecyk
If Jesus was alive today, seeing how these Megachurch pastors have made themselves into millionaires and billionaires by using the churches as their personal piggy-banks, he'd likely want to do to them what he did to the money-changers in the temples.
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James Hage
Matthew 6: 19 “Do not store up for yourselves treasures on earth, where moths and vermin destroy, and where thieves break in and steal. 20 But store up for yourselves treasures in heaven, where moths and vermin do not destroy, and where thieves do not break in and steal. 21 For where your treasure is, there your heart will be also.
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Rev Ned
These are the guys that Jesus threw out of the temple.
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James Hage
Truth!
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Russel A. Kester
The strategy seems to be working and that's good news for spreading the good news. Surely mainline church headquarters expected it's mission churches to become self sufficient. And once they reached parish status they were expected to contribute back to the local Diocese or headquarters according to the church's organizational structure. But that meant being part of a larger church body. This solution will allow independent churches to get started and flourish with a plan reviewed by professionals in marketing. Seems like a good twist to some old ideas and allows for more independence too.
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Patricia Ann Gross
Russell, I agree. I also wonder if there is a specific "statement of faith" or creed that quailifies the "church" to participate in the program. Organized denominations have programs in place to help shore up the mission churches. I also wonder if it supports religions other than Christianity.
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Daniel Gray
So whats the problem? If they want to keep their church going and the members want to help start up a new church associated with this one, then why all the fuss about them doing it?
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Rev. BH
Because a church should ideally use any excess finances to help the poor, sick and elderly, not pay back investors.
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George Walter Kauffman
Love it ... Now buy all the Real Estate we can and add to Our Portfolio.
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David Arthur Lewis
Money-changers in the temple - the one class of sinners that even Jesus hated.
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Keith D
Interestingly, I visited a Benedictine monastery recently. Not being Catholic, I was pleased to be told of the Benedictine principle that a monastery must stand on its own, financially, not depend on the church for funding.
This monastery has quite a gift shop that is a key source of funding.
I think the profit motive is a tough match with something so elevated as spiritual awareness and the soul. Working this one out for myself, which perhaps is exactly what each should do... with their own gnosis. And let it be gnosis; not the muttering and excuse making of thar thing we call 'mind.'
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Steven Ferrell
This is totally wrong. Yes it take money to run a church, but to go to bed with the devil to start a church……. Has this country really sank that low?
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Rev. Dr. Father JJ
exactly who is the devil? and why do you claim this country has "...sunk that low?" no church has to accept the offer of financial help; it's up to the individual church, congregation, pastor/rabbi/imam. it seems more like you have an axe to grind here: do you have a specific person, or group or political party you want to blame? because otherwise you're just saying stuff for no reason
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Spencer Montague
First the SCOTUS now the church taxation is certainly in order.
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Keith Law
Whatever this is, it ain’t what Yeshua (Jesus) taught (according to the Biblical story) by word or deed, so it can’t be Christian. It’s the golden calf; it’s mammon, right? And thus wrong, right? Who cares about hypocrisy any more?
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James Hage
You are correct, and I still care.
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Walter J. Holbrook
The church is supposed to be the home of trust and fruitful growth. I am unsure of the value of this long term concerning the church.
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James Hage
So the money going to the church will be going toward making these vulture capitalists richer, rather than providing for the sick, the widows, the poor and the homeless. When was the last time you saw a mega church do anything good for others without ulterior motives. If all the churches did what they were suppose to as required by most religions we could end world hunger and so many other issues. But believers no longer serve God, They expect God to serve them. The idolaters Bow down to dollars that are their only God. The serve the greed of others to increase their own worldly holdings. They commit Genocide and blasphemy as they bear false witness against their neighbor and claim they are doing Gods will. He knows your hearts, and thoughts. Matthew 6:19 “Do not store up for yourselves treasures on earth, where moths and vermin destroy, and where thieves break in and steal. 20 But store up for yourselves treasures in heaven, where moths and vermin do not destroy, and where thieves do not break in and steal. 21 For where your treasure is, there your heart will be also."
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RFSmith
The original Church launched with just eleven guys and several women. Funding the Church was not difficult since everyone provided what they could when they could according to the needs of the group and individuals. This, of course, attracted additional followers, among whom were some not-so-altruistic folks who ended up paying a much heavier price than they could have imagined had they not added deceit to their donation. And even though a harsh lesson was learned at the time, it certainly had not stopped future opportunists from turning the Church into a global enterprise with for-profit franchises in a town near you. Big churches are big business and it's no surprise they're utilizing worldly marketing methods to do more than just stay afloat, but to make themselves profitable and fat from whomever they can wring their dollars from. I suppose it was inevitable but I do believe tax exemptions should now no longer be granted to any so-called religious entity. If these institutions of faith are to survive and thrive let it be through the faith of the few who are truly the heart and soul of the Living Church.
A handful of men and women got together after Jesus' resurrection and things went pretty well for them. I'd be delighted to find a group like that and, if they'd have me, feel privileged to join them.
If treated like a business, then taxed as a business.
Sorry but federal law says you cant do it. Next?
Change the 501c3 qualifications.