How Do Churches Make Money? Eight Streams Of Revenue

Picture yourself in a staff meeting or brainstorming with the leaders in your church, thinking, “It would be awesome if we could (...insert brilliant idea here…), but we don’t have the funds to make it happen.” 

Can anyone relate to what I’ve just shared? (I see that hand!) I've been in the ministry for over two decades. I know the pain of cutting an already too-small budget. Maybe your church is struggling financially, or perhaps you have capital resources, and you want to learn how to leverage them more effectively for the church long term.

Either way, I’ve got some recommendations of practical ways to grow revenue (as well as some of the best church giving software tools) to spark your imagination.

Editor's Note:

Your church’s financial strategy needs to incorporate several key pieces (which we’ll get to later in the article). Of critical importance though, is the software your church uses for giving, donations, etc. Together with your church finance committee, ensure that the giving software you use is adequate for your needs.

What Does It Mean To ‘Make Money’ As A Church?

Making money is a crucial aspect of running a church because, without it, the ministry wouldn’t get very far. From staff salaries to coffee supplies to curriculum for the kids ministry, there is no limit to the ways a church can use the financial resources it has been entrusted with. 

 The mission of the church (The Great Commandment and The Great Commission) has remained unchanged since the Church's inception nearly 2000 years ago. In the early church, finances furthered that mission, in various ways:

• To pay the teachers and leaders of the church (1 Timothy 5:17-18, Galatians 6:6)
• To spread the gospel through missionary work (Luke 8:1-3, Philippians 4:15-16)
• To care for the poor within the church and in the greater community (Acts 2:45, Galatians 6:10, James 1:27)

This is generally the same today. However, the method for generating money has changed and evolved. We no longer pool all of our resources as the early church did in the book of Acts, but we still look to our church members to play a vital role in providing the resources the church requires.

This is appropriate; the bible addresses giving as a fundamental part of a believer's life. (That being said, studies show that the percentage of Christians who tithe is on the decline.)

There are a few points to remember:

1. Seeking to ‘make money’ is a red herring. Don’t let "increasing revenue" distract you from your Jesus-given mission: The Great Commission and The Great Commandment. Money is a tool to further those ends. It is not the goal!
2. Stewardship is a critical aspect of handling money. As pastors, we are called to be a faithful steward of the resources of the church (Titus 1:7).
3. The amount of money a church has should not be used to define whether your church is successful. Jesus Christ is looking for faithful followers who will trust Him (2 Chronicles 16:9), not for the biggest mega-church with the most money in its bank account.

All that being said, here are some suggestions for practical ways churches can increase their incoming funds.. NOTE: be sure to check out How To Conduct Church Financial Management + Best Practices.

Eight Common Streams Of Church Revenue

There are various sources of income to consider. Starting with the most obvious, I’ve made a list below to help broaden your options for helping your church make money. 

Author's Note:

Check with your church accountant before starting any of these revenue streams to make sure you are still in compliance with your charitable status requirements. As a nonprofit organization, there may be restrictions around the money you make and how it needs to be spent.

#1 - Donation, Tithes and Offerings

Donations from your church members are by far the most common and most lucrative way to make money in the church. When it comes to the short offering messages you present to your church, there are healthy and unhealthy approaches to take. Believers have been ‘giving in church’ since the start of the early church in Acts. The method, expectations, and beliefs around giving have changed a lot over the years, but I don’t believe this revenue stream is going to be going away any time soon. 

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#2 - Church Grants

There are plenty of grants available for churches. Some are government grants, while others are funds provided by private foundations. Though they may have requirements on how they are used, they can free up funds within the church to focus on other aspects of the ministry. Not only that, but church grants can create partnerships and build on relationships with local businesses and foundations that are giving the grants.

Here are some resources to get you started in your search:

• FoundationSearch (grants in Canada)
• Canada.GrantWatch
• Instrumentl  (Grants in the USA)
• Googe Ad Grants 
• ChurchJuice

#3 - Facility Rentals

If you own your church building, this can be a great way to monetize your assets. If there are certain times of the week when the building sits empty, consider this as an opportunity to rent it out to others who could use the space. Here are some ideas:

• Rent the sanctuary to a different church who wants to meet on Saturday evenings or Sunday afternoons
• Family parties
• Wedding ceremonies and receptions
• Conferences
• Schools or daycares during the week
• If you have outdoor space, maybe it could be used for sporting events or outdoor gatherings.
• Parking in populated areas

Whether you are renting out your space or keeping it exclusively for your own church activities, you will want to be sure the building is maintained well.

A church building can be used for so much more than a Sunday morning service, and if your church community doesn’t need it 24/7, this is a great opportunity to make money. 

#4 - Fees for Services

Sometimes your church may offer services that may be helpful for the community. Some examples of this might be:

• Pastoral counseling (offered by staff trained in Christian counseling)
• Summer camps and retreats
• Conferences or concert events
• Preschool or daycare

Charging fees for these services may help cover the costs of running the service itself, but it may also provide extra income to contribute to the financial stability of the church. It can provide vital services that help the church and the greater community. This can have the added benefit of increasing visibility in the community and possible outreach programs. 

#5 - Church Merch

There are many benefits to selling church merchandise. 

• It helps bring in extra revenue for the church.
• It strengthens the bond within the church community.
• It is a form of marketing within your community. 
• It’s a great icebreaker for people wearing or using the merchandise; when asked about the merchandise they have an easy way to introduce the church and why they love it enough to wear merchandise supporting it. 

#6 - Endowments and Investments

On occasion, a church will receive a large sum of money through donations. This can be used to set up a church endowment fund. An endowment is a financial asset created to provide a permanent source of income for a church. The principal amount of the endowment is invested, and only the interest or a portion of the earnings is used to support the church’s ongoing activities. 

Author's Recommendation:

It’s a good idea to hire a professional financial advisor when setting up the fund to handle the investment. They can assist you with the annual distribution of the fund as well as keeping up to date with government compliance and regular oversight of the fund’s success.

An endowment fund can contribute to long-term financial stability for a church, and it has appeal for donors who want to leave a lasting legacy that will help the church they are committed to long beyond their life.

Here are some resources for further research:

• Investopedia
• National Council of Nonprofits
• Council on Foundations
• Faith Driven Investor

One thing to consider before investing with a CD is whether you will need access to the funds over the term of the investment. If you might need to pull the money out at any time, then you will want to get a no-penalty CD (or a redeemable GIC). These will have lower rates of return on your investment, but it means you would be able to pull the money out at any time. For further research, check out these sources:

• Investopedia
• Bank Rate helps you stay up to date with the CD rates and how to choose the best one for your needs. 
• To learn about GICs in Canada, check out Rate Hub.

Author's Suggestion

As an alternative, there are other ways to invest larger sums of money in the medium term. Consider a Certificate of Deposit (or in Canada, the equivalent would be a GIC) to park your money for 1-5 years. These investments give you a guaranteed return on your investment. The interest isn’t as high as other investments, but that is because the risk is very low, which is what you want if you are investing donated funds.

#7 - Fundraising Events

From church bazaars and bake sales to conferences and silent auctions. There are lots of options when it comes to fundraising events. All it takes is a little creativity and a team of people with the passion to pull your event together. Some ideas for fundraising events include:

• Bake sales
• Community yard sales
• Talent shows
• 5K run/walk
• Spaghetti dinners
• Silent auctions
• Parents’ night out (where the youth offer to babysit)

There is no limit to the types of events that your church can host to raise funds. The benefit to these events is that it is an opportunity for your churchgoers to spend time together and fellowship as they plan and execute the events, thereby strengthening the relationships within the church community.

#8 - Church-Run Businesses

Some church-run businesses can provide additional revenue while at the same time supporting the mission of the church. Consider these options:

• Setting up a coffee shop or café within the church can provide a social space and generate income from sales. A café can also serve as a community hub, creating a space for church members and the greater community to fellowship. 
• Start up a bookstore that offers books, Bibles, and religious materials that can cater to the congregation’s needs.
• A thrift store operated by the church can sell donated items and provide affordable goods to the community. Proceeds from the thrift store can be used to fund church programs and outreach efforts.

Not only can these businesses provide the potential for making money for the church, but they also provide opportunities to accomplish the church’s mission to love and reach out to the community you are working within.

Editor's Comment:

While a church run business does offer a potential additional revenue stream. Additionally, whether this business is operated by volunteers or paid staff, this could providing opportunities for your church members to spend time together, increasing the bonds within your church and building on the relationships that are formed.

Whether your church-run business is operated by volunteers or paid staff, you will again be providing opportunities for your church members to spend time together, increasing the bonds within your church and building on the relationships that are formed. 

Important Reminder:

As stated earlier, please be sure to understand the legal and tax implications of running a business, including nonprofit status considerations.

A Pastor’s Money Management Toolbox

If you’re like me, you didn’t get into ministry because you had a real passion for money management. So the thought of needing to have a money management toolbox?!?!....No thank you. Stick with me though, because I think you may find it’s easier than it appears. 

You need... an effective church finance committee.

Having a trustworthy finance committee that can handle the financial management of the church is a great place to start. It feels good to have a competent team of people who are monitoring and managing the money for the church. But it doesn’t stop there. A good church finance committee is crucial to the operation of the church. This will often be executed by the church board or deacons. They will take care of the following:

• Managing the day-to-day financial operations of the church.
• Ensuring compliance with legal and financial regulations.
• Setting the annual church budget.
• Long-term planning for the church finances, and where applicable, investments.
• Setting policies around governing and operations (eg. how to handle cash donations).

Check out this Ultimate Guide To Effective Church Finance Committees. 

You need... church accounting software.

Unless you want to go old-school and keep a hand-written general ledger of all your finances, you will need good church accounting software for tracking and maintaining the finances of the church. There are so many options available that it can be confusing to know how to pick the best one. I can help you there. 

We have compiled a list of the Best Church Accounting Software To Manage Finances In 2024. Having the right church accounting software in place allows you, as the pastor, to keep focused on what you do best, caring for and shepherding God’s flock.

You need... robust church-giving software.

Depending on your church denomination or tradition, you may have different methods for receiving your tithes and offerings at your church. Though you may be passing the plate or bucket to collect weekly donations at each service, your churchgoers may appreciate other options for giving that are a little more 21st-century. The right church-giving software will streamline the process for your givers, making it easier for them to do online giving, with their credit card, through mobile apps, or text messages.  

Not only that, but it also makes it easier for you and your finance committee to receive, organize, and provide receipts to your donors. It’s a win-win. I have included the 19 Best Church Giving Software To Track Contributions In 2024 for you here. Talk to your finance committee about what tool fits your church best.

You need... a good accountant.

Depending on where you live, you will have different requirements for compliance with your government. Be it the IRS or the CRA, regulations for charitable status are complex. A good accountant will be vital in this process. Having an outside opinion about the finances of the church can also give you a non-biased perspective on the church’s financial position. Also, the reporting requirements for charities can change from year to year, so it is helpful to find an accountant who has experience with filing for nonprofit organizations since these requirements will be different from private for-profit corporations. Some questions to ask when choosing an accountant are:

• Do they have experience with fund accounting?
• How do they stay up to date on the latest financial reporting requirements?
• Do they understand the specific needs and challenges faced by churches? 

You need... church communication and collaboration tools.

These tools will get you nowhere if you don’t have good communication within the church. It is vital to have good processes in place to communicate budgets, requests for money, processes for getting money where it needs to be, etc. In the digital age we are living in, there are countless tools to help with communicating and collaborating with teams and church members.

We have some great recommendations for church communication apps that can help your church communicate effectively not just about money, but all aspects of the church.

Church Revenue: Frequently Asked Questions

In no particular order, here are some frequently asked questions when it comes to churches making money.

Do Churches Pay Taxes?

In many countries, including the United States and Canada, churches are not required to pay income tax because they are granted tax-exempt status as a charity. This comes with specific conditions and requirements that must be maintained to keep that status. You can learn more here:

United States

• IRS Publication 1828: Tax Guide for Churches and Religious Organizations
• National Council of Nonprofits: Nonprofit Tax Exemption

Canada

• Canada Revenue Agency: Charities and Giving
• Canadian Centre for Christian Charities (CCCC): Supporting Ministries in a Complex World

Can Churches Invest in the Stock Market?

Short answer: yes, churches can invest in the stock market. These investments can provide a great revenue stream for the church that can help with the daily church operations. There are several considerations to be aware of, mainly:

• Does your investment align with the mission and values of your church?
• Is it socially responsible?
• Are you still able to maintain compliance with your charitable status requirements?
• Is the investment too risky?

How Do Churches Ensure Transparency and Accountability in Handling Their Finances?

Ensuring transparency when it comes to finances can sometimes feel like a balancing act. You don’t want to share too much with the church and risk boring them with unnecessary details. At the same time, being too closed off about the finances can make it seem like they aren’t invited to know and understand how the money is being spent. Depending on the denomination you are a part of and how the leadership has been structured, these processes will vary from church to church.

• Be sure that your church has established clear financial policies and procedures (eg. how cash is handled and guidelines for budgeting and spending).
• Inform the congregation regularly about who is handling the finances (be it a financial committee or a board of directors) so they know who they can talk to if they have any questions.
• Communicate regularly with the church about how things are going financially and how the money is being spent. The goal of all of these tactics is to build trust with your congregation and ensure responsible stewardship of the resources provided.

How Do Churches Handle Designated or Restricted Funds?

Restricted or designated funds are donations made to the church that are meant for a specific purpose within the church. Some examples include donations made toward a building fund, mission work, benevolence, or scholarships.

To learn more, check out these resources.

• In the United States: The Foundation Group
• In Canada: CCCC

You will need to develop clear policies and procedures for accepting, managing, and disbursing designated or restricted funds. Communicate with donors about the nature of designated or restricted funds and how the church will use them. The funds must either be set aside in a separate bank account or accounted for separately in the accounting records. The restricted funds should monitored regularly by your finance committee. The restricted donations cannot be used for any other reason other than the purpose for which they were collected.

How Can Churches Effectively Manage Their Debt?

Church debt is just about as fun as personal debt. The faster you can get rid of it, the faster you can free up more financial resources to be used to further the mission and vision of your church. Some tactics for managing church debt include:

1. Know what you owe. Without a good understanding of your financial position, you will have trouble coming out from under the debt you are carrying.
2. Establish a budget that prioritizes debt repayment. You may need to adjust spending in other areas to make this happen.
3. Come up with a strategy to repay the debt. You can start with the smallest debt and work your way up (ie. the debt snowball). Alternatively, you may pay off the debt with the highest interest rate first.
4. Other options: Consider debt refinancing or consolidation. Maybe some targeted fundraising or a capital campaign would be an effective way to minimize debt or pay it off altogether.
5. Seek professional advice from financial advisors, accountants, or other professionals who specialize in nonprofit or church finances. They can provide valuable insights and recommendations tailored to the church’s specific situation.

Conclusion

Making money for your church takes a lot of planning and hard work, but with the right tools in place and the support of a trustworthy team to work with, you can diversify and hopefully set your church up to succeed for years to come. 

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