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The Economics of Church Size

The title of this article will raise the hackles on the backs of readers’ necks, I know. Can economics have anything to do with the size of church congregations?

  • Timothy D. Terrell,
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The title of this article will raise the hackles on the backs of readers’ necks, I know. Can economics have anything to do with the size of church congregations? Should it? Economics is essentially a study of how people use resources to accomplish their goals. So, for a Christian, economics is a way to understand stewardship — how to use creation to bring glory to God. As church members, we should be concerned about how to be good stewards of the resources entrusted to the church. If church size has any effect on our stewardship, then “the economics of church size” is a perfectly legitimate topic.

According to Lyle Schaller, a “church analyst,” about 50 percent of Protestant churches in the United States have between 45 and 150 in attendance at worship. About 25 percent are smaller than 45, and most of the rest are between 150 and 350. Only 2 percent of Protestant churches have over 800 people. There is evidently something about that range between 45 and 150 that seems to attract people. Some have suggested that it has to do with the inability of individuals to form attachments to more than 150 people. But whatever the reason for the 45-150 size range, it seems that this range is shifting upward. Churches are getting larger, and while smaller churches are closing their doors, mega-churches are taking their place. Schaller says that by 2025, 10 percent of the congregations will compose 50 percent of all attendees on Sundays.

Smaller Is Better
How should we react to this change in church size? Is this a problem? To an economist, a major concern of any group like a club, church, or volunteer organization is the free-rider problem. Basically, there are those who will take advantage of the services provided by the organization without helping cover the costs of those services. Of course, a church is not a country club — it is not all about providing services to the members. A corporate worship service involves people coming together to worship God, and the primary effort is supposed to be centered on that activity rather than on serving one another. Still, there are many church activities that serve members, and typically there are no admissions fees, dues, or membership cards. No one is standing at the door barring entrance to those who didn’t tithe the week before. Not only Sunday preaching, but Sunday schools, fellowship dinners, nurseries, vacation Bible schools, weekday Bible studies, youth outings, sports teams, counseling, meals to the sick, pastoral care, and other church-provided “services” are ways that the typical member benefits from the church. It is possible for a person to enjoy all these benefits while failing to contribute financially to the church. Some people, of course, are going to be unable to contribute as much as the costs of having them in the church. These who are poor and needy should be welcomed as fervently as a wealthy person who gives more than he takes from church resources. But, for those able to give, there remains a temptation to free-ride — to take what the church provides without doing nearly enough in return.

Do people succumb to the temptation to free-ride on the contributions of others? We must confess that they occasionally do. Perhaps this is why wise Nehemiah, when rebuilding the wall of Jerusalem (Nehemiah 3), had each family take responsibility for the portion of the wall in front of his own house. No one wanted the city wall breached, but especially not in front of his own house. Nehemiah knew that families might be tempted to put forth a little less effort (and build a weaker wall) if they were working in front of a stranger’s or mere acquaintance’s house.

Larger churches may be more subject to the free rider problem than smaller churches. The larger an organization is, the harder it is to coordinate people and make them feel that they are a vital part of the whole group. It is easier for the individual to sit comfortably in anonymity and say to himself, “Someone else will take care of the nursery duty.” “Someone else will greet newcomers.” “Someone else will teach Sunday school.”

In a large church, then, the elders and deacons may have to put extra effort into encourage people to participate. Otherwise, the elders and deacons end up doing all the work with the assistance of a few overworked women (usually, it is women). This is an impossible task. The small corps of volunteers burns out. Elders and deacons might not actually leave, but their families and careers may suffer while they struggle to fulfill their church-related responsibilities. If the church continues to grow, church ministries begin to show the strain. The disorganization that results from having too few people bearing the burden of responsibility becomes apparent to regular visitors and even newcomers. When this happens, the growth of the church could slow down or even reverse.

Bigger Is Better
But maybe free-riding is not the problem that economists think it is, at least when it comes to churches. Economist Jody Lipford, in a 1995 study, examined contributions to three mainline Protestant denominations in South Carolina — the Baptists, the Presbyterians, and the Episcopalians. He found that free riding was generally not a serious problem — that on average, larger congregations had larger per member giving. At first, as churches grow into the range of 100-499 members, giving per person falls, but then as churches grow past 500 members, giving more than proportionally increases. Empirical studies like Lipford’s have a long list of shortcomings, but should not be ignored.

Economics suggests that larger churches do have the advantage of scale economies. This means that when the church gets larger, the average cost of handling the needs of each member falls. Land and a church building to accommodate 500 members does not generally cost ten times what facilities accommodating 50 members would cost. A pastoral and administrative staff for a church of 500 is not usually ten times the cost of a staff of a church of 50. Therefore, if the free-riding issue does not become a problem, a larger church should be able to use scale economies to make room in the budget for additional missions support, diaconal ministry, or some other aspect of church functioning.

In larger churches, too, there is a greater possibility that the various pastoral and administrative responsibilities can be allocated to those people who have a relative affinity for those duties. Maybe one man can handle counseling, while someone else handles most pastoral care duties, and another does most preaching and liaisons with the denomination. Another person may be able to help with mailing lists, bulletin preparation, and answering phones. Just as most families find it advantageous for one parent to handle most childcare while another handles career responsibilities, a church can see some efficiencies by splitting the tasks up among several individuals.

Cautions for Large Churches
First, be careful with extrapolations on current growth rates. Problems with organizing ministries and “free riders” may appear and at least slow down the growth. That small corps of volunteers has its limits, as does the ordained leadership. If elders, deacons, or the pastoral staff “burns out” because of insufficient help from the rest of the congregation, that can create its own problems. There may be a temptation to compromise on the qualifications for elders or deacons just to get warm bodies to do the ministry.

Second, it should be noted that while “economies of scale” do exist, small and mid-size congregations have their place. Some people are more comfortable in smaller groups. As a church grows, daughter church plants might be a good idea, either instead of or alongside a continuously growing congregation.

I write all these things as a church member who has not held any ordained leadership role in a church, and who has had a fairly narrow range of experience with larger churches. However, I believe economics has something to add to any discussion on church size. It is a matter of considerable concern to many individuals as average church size increases. Any comments would be welcome as I write more on this topic.

  • Timothy D. Terrell

Timothy Terrell is associate professor of economics at Wofford College in Spartanburg, South Carolina. He is assistant editor of the Quarterly Journal of Austrian Economics and is an Associated Scholar with the Mises Institute.

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