Calculating the Cost of Ministry

If the “cost” of something is “the price paid to acquire, produce, accomplish, or maintain it,” and calculating it is going to require manipulating numbers, then I’m pretty sure your first instinct when reading this article’s title was to run for cover! We’re just emerging from the glow of Christmas and the sparkle of the New Year. Who wants to talk about math or money?

Me neither. So we’re going to take it as given that one way to calculate the cost of ministry is with dollars and formulas. If we really wanted to, we could become wizardly economists and use formulas to calculate the fixed cost, variable cost, and total cost of being a congregation. We could even talk about the marginal cost of becoming a bigger congregation.

But “cost” doesn’t just refer to money. Cost can also be defined as the expenditure of time, labor, trouble, etc. in addition to money. And this is where most congregations fail in their calculations. They don’t take into account the additional costs.

I typically work with three categories of cost in addition to dollars, although you may have other categories to suggest:

1. Ministry always costs time – time for activities like hospital visits, sermon preparation, website updates, confirmand mentoring, and closet organizing. (Some volunteer in the distant past took the time to store the dusty pine cone wreaths and the cardboard puppet theater in the same closet with the floor buffer and the cleaning supplies.) Some of this time is obviously salaried while other time is freely offered by volunteers, but ministry does not happen without someone having spent time.
2. Ministry can also cost health – spiritual, physical, or financial – and this cost can be borne by both individuals and the congregation as a whole. A volunteer who is involved in too many activities may be paying a physical health cost. A minister who is paid a minimum salary for more than the first year or two of his or her career may be paying a financial health cost. A congregation mired in conflict may be paying a spiritual health cost.
3. Ministry also involves opportunity costs – and here, we really do need to enter the economist’s world. The opportunity cost of something is the value of the best opportunity foregone in a situation involving choices and limited resources. So, for example, if an investor purchases $10,000 of a security and the investment appreciates by 5% over a year, she would end the year with $10,500. But she could have invested in a government bond with a yield of 7.5% and end the year with $10,750. Thus, her opportunity cost would be $250 (the difference between $10,500 and $10,750). Stepping back into the congregational world and speaking much more generally, the opportunity cost of any ministry decision – to purchase an organ, for example – is the other important things that could have been done with the resources now irrevocably committed to that decision.

What I want you to understand is that every decision a congregation makes actually involves a combination of these costs, never just dollars:

• A congregation that sees an average of 300 people in worship on Sunday but calls only one minister and has no other program staff may be saving money, but it is almost certainly paying a portion of its ministry cost in the form of additional hours of the pastor’s time and his or her physical and spiritual health.
• In previous generations, this kind of congregation might have been paying a portion of its ministry costs in the form of volunteers, but volunteer hours are no longer as readily available as they once were. If this congregation were to continue to expect lots of volunteer hours in order to meet its ministry goals, it would be paying for the cost of its ministry with the physical and spiritual health of its few remaining volunteers. Ultimately, of course, it would also be paying for its outmoded ministry model with its own financial health as members leave.
• A downtown congregation that sees an average of 200 people in worship on Sunday in a turn-of-the-20^th-century cathedral with sanctuary seating for 2000 probably budgets for extra custodial staff, high utility bills, and replacement costs for things like roofs and boilers. In addition, however, it is paying an opportunity cost in the form of, for example, food for the hungry or a prison outreach ministry that could be funded were the congregation to move to a smaller and less financially draining building.
• A small, rural congregation that sees an average of 30 people in worship on Sunday but continues to pay a full-time minister is probably paying a similar opportunity cost. It, too, could be helping more neighbors in need or even extending the existence of the congregation into a more distant future by reducing the minister’s role from full-time to part-time.

The most important advice that I can give you is to be clear about the costs of your ministry and intentional about its purposes.

• If your congregation is too large to be served by one person, either add program staff hours or reduce your expectations for your pastor so that you are not paying the cost of your ministry with his or her health.
• If you no longer have the volunteers necessary for your ministry, preserve your members’ health by changing your model.
• If you are paying a huge mission opportunity cost in order to stay in the building of a former era or hang on to a full-time identity in a part-time community, consider shedding your building or your former identity in order to expand your mission.

Above all, understand that ministry costs more than money and it is not always you that is paying the cost.