Thursday, July 07, 2005

A Case Study of the Evangelical "Business" ...

This is based on a recent Business Week article, "Earthly Empires:"

The evangelical sector is growing rapidly while overall church attendance in the U.S. is fairly stable. Leaders of many of these churches have read the social and cultural trends well enough to gather those feeling alienated by traditional churches, and the formerly uncommitted, with their prosperity gospel, and entertainment-oriented services.

They are beginning to flex their muscles as a very conservative voting bloc. They are well-positioned for an aging America, since spirituality generally increases with age. On the religious side, their “theological flexibility” and the absence of any central coordinating force may allow some to compromise religious principle for “production values.”

Business models, core business

The core business of many of these churches seems to be making people feel good about themselves. The business model is to offer upbeat messages of hope, self-help programs with a positive message, serve consumer needs like counseling and advising on a wide range of topics, including a Christian approach to personal finances, for which their “clients” should be willing to tithe.

Corporate strategies

Many churches hire MBAs for their business offices, practice niche marketing (cowboy churches, biker churches, “Bible-zines”), build brand loyalty, and franchise proven concepts. They use professional market research (e.g., pinpointing Phoenix as underserved by effective churches), and keep their fingers on the pulse of contemporary culture.

Business / competitive strategy

These churches target “untapped masses” who have never belonged to churches or are drifting away from the “mainlines,” satisfy demands not met by traditional churches, and make services more positive and stimulating. They work across media to build awareness by advertising, televising services, and writing books. They actively recruit membership, pursuing rapid growth.

State of the industry, attractiveness

Generally, barrier to entry is low. Without belonging to any world-wide headquarters, they can open when and where they wish and practice a “flexible” theology. A new mega-church is formed in the U.S. every two days. Once they begin to get significant economies of scale, profits can be huge.

It is a very attractive industry. One very telling statistic is that where the traditional church has less than 200 members and a budget of around $100,000, mega-churches, defined as 2000-plus weekly worshippers, on average work with budgets on the order of $4.8 million.

Ethical conundrum

I suppose the IRS will tell us when a mega-church is more a business than a religion, and is to be taxed as such. The BW article mentioned one “preacher” who drives a Rolls-Royce while many of his congregants are struggling to give him their tithe. If the income is that far out of proportion to the services provided in that “business,” it should mean that more good works can be done.


jbv's Competitive Edge 


Blogger Rich Molumby said...

I have a Turnkey Royalty Free site/blog. It pretty much covers making money on the web.

Come and check it out if you get time :-)

10:20 AM  

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