Is Your Next Mission Field the Marketplace?

By Raul Rivera

By nature, pastors have an entrepreneurial spirit. This is a good thing because many pastors are using their entrepreneurial spirit to create new and different ideas in order to reach people and grow God’s kingdom.

Unfortunately, most of these new and different ideas stay within the four walls of a church and many individuals on the outside are never reached. 

I am not saying there is anything wrong with having great worship services and ministry programs, but what are you doing to gain influence outside the four walls of your church? 

Perhaps a more sobering question to ponder is, if your church were to disappear overnight, would your community notice its absence? 

Sure, your church’s worship services may be great, and your church may offer some of the best ministry programs a church can offer. However, are your worship services and ministry programs reaching those who do not pass through the doors of your church?

In order to reach those who do not come to your church, you must go to them. And where do most people spend their time? The marketplace! In this article, I will discuss how you can increase your church’s influence in the marketplace through a for-profit arm.

What are you doing to gain influence outside the four walls of your church?

What is a for-profit arm? 

A for-profit arm has a twofold benefit: 

1. The first benefit of a for-profit arm is that it allows a church to enter the marketplace. Our society can use more Christian-owned businesses that implement good business practices such as fair trade and that provide good paying jobs to those in the community.
2. The second benefit of a for-profit arm is that it generates income for the church. Let me explain.

In essence, a for-profit arm is a ministry-owned business that is established to make tax-free money paid as donations and dividends. 

In Section 502, the IRS calls it a “Feeder Corporation,” and describes it as a business operated for the primary purpose of carrying on a trade or business for profit even if the profits are distributed to your church tax-free. This business can engage in any lawful activity and be open to the general public. 

The type of business can be anything you want it to be so long as it is a lawful business and your ministry feels good about it. Whether it is real estate investing, commercial leasing, hauling, dry cleaning, a retail store, a convenient store, a car dealership, or a restaurant, your church can own the business.

Consider the following example to help clarify how this strategy can help both your church and community.

Example

First Church started a for-profit daycare center in a rented facility. When the daycare enrolled its 60th child, there was an increase in revenues and a need to hire more help. 

One year later, the daycare center began to offer a breakfast and dinner program for busy families, and it opened a dry cleaning facility next door so parents could easily drop off their dry cleaning at the beginning of the day.

Revenues increased even more for First Church and it no longer relied solely on tithes and offerings to pay its bills. In addition, by entering the marketplace, the church’s for-profit arm created a few more jobs in the community, and some families from the daycare started attending the church. 

How your ministry can establish a for-profit arm in the marketplace

While the formation of a for-profit arm requires a much deeper discussion than this article can provide, below are two important steps to follow when setting it up.

Step 1: Begin to prepare for your for-profit arm.

Begin to set aside a portion of your church’s tithes and offerings to be used later for the purposes of investing in your church’s for-profit arm. During this time you should also determine the type of for-profit arm you want to operate. 

To help determine what type of for-profit arm to operate, consider the following:

• What experiences, skill sets, and knowledge do you have that could be used to operate a successful business?
• What experiences, skill sets, and knowledge do individuals in your church have that could be used to help you and your church operate a successful business?
• Is there a certain need in your community that no one else is currently meeting?
• Besides ministry, what are you passionate about? Could any of your passions translate into a successful business?

Step 2: Be intentional with the language used in the formation documents.

Create your for-profit corporation with language that will make it a closely held corporation of the church. By doing so, your church’s for-profit arm can protect its First Amendment right to the free exercise of its religious beliefs.

This is an important strategy because many churches would never be able to participate in the marketplace if its closely held for-profit arm had to engage in government rules that forced it to violate its faith and doctrines. 

Many of the pastors we work with (who integrate the for-profit arm strategy with their church) included protective language in the formational documents of their for-profit arm. 

We will examine the importance of including such protective language to your for-profit arm’s formational documents in a future blog post, but if you have questions in the meantime, please call our office at 877-494-4655.

Are you up for the challenge?

While I hope this article challenged your thinking about your church’s involvement in the marketplace, I hope even more that it inspires you to take action. Now is not the time for the Church to idly sit by and wait for someone else to do something.

Rather, now is the time for the Church to take its rightful claim as the head and not the tail. To do that, we have to be willing to think outside of the box and begin “doing church” differently.

I challenge you to share this article with your staff leadership team. Pray together about what this strategy could mean for your church and community. Ask God to give you guidance. 

Additionally, I invite you to share this article with other ministers and church leaders who you think will benefit from establishing a for-profit arm for their church. 

Again, if you have any questions about starting a for-profit arm for your ministry, do not hesitate to call us at 877-494-4655, or simply check out the link below for more information.

Handpicked articles for you:

• “How to Better Protect Your Ministry’s Religious Liberties”
• “Do You Know How to Pay Guest Speakers?”
• “Are There Limits on Pastoral Lunch Expenses?”

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