The church needs to think about finances in a different way.
When Mark DeYmaz and his wife Linda founded Mosaic Church in Little Rock, Ark., in 2001, they hoped to build an ethnically and economically diverse congregation. Nearly two decades later, they’ve done that and more. Mosaic has positively transformed Little Rock’s inner-city University District by serving its neighbors well, breaking through to a cynical, secular culture, and creating financial sustainability to secure the church’s future. All that despite existing in an under-resourced community. How has it been possible? Through the practice of what DeYmaz calls Church Economics.
DeYmaz chronicled Mosaic’s application of Church Economics in his latest book, The Coming Revolution in Church Economics: Why Tithes and Offerings Are No Longer Enough, and What You Can Do About It (with Harry Li, Baker). In our interview below, DeYmaz defines Church Economics and explains why it’s imperative for churches to adopt it if they plan to survive—and thrive—in the years ahead.
What do you mean by Church Economics, and why is it critical to the future of the American church?
If I say Dave Ramsey, pastors know what I’m talking about. And if I ask them why they want to bring FPU to their church, they say, To help people manage their money using biblical principles, and to help them get out of debt. And that’s true. But there’s another reason: Pastors think that if people are out of debt, they will give more money to the church. Just because people have more discretionary income and less debt doesn’t mean they’re going to give more. That’s why the entire generosity industry now permeates the American church. But these things alone will not be enough to fully fund and sustain bold ministry initiatives in the future. Pastors are going to need to embrace a third approach: Church Economics, which involves leveraging church assets to bless the community while generating sustainable income.
Your personal background set you up to put church economics into practice, didn’t it?
Yes. I was born out of wedlock in 1961 and grew up an only child in a lower-middle class, single-parent home. When I was young, my mom worked a full-time job, and at night I helped her sell Avon on the streets of Alameda, Calif. After we moved to Phoenix she’d buy broken pianos, have them fixed, and sell them for a profit. We made it because of my mom’s gig and hustle. I watched her and learned. In sixth grade, I got a job at a convenience store sweeping the parking lot and stocking food. At 13 I became the dishwasher at the Phoenix Playboy Club. In junior and senior high I worked for the rectories and the Catholic school I attended to help pay the tuition as part of work scholarship programs. I have been blue-collar, hustling and gigging it all my life. My background defines my understanding of Church Economics, which is how we make it work in the urban center of Little Rock.
Talk about how socioeconomic factors are affecting the church’s ability today to survive solely on tithes and offerings.
When I was young, only six percent of kids were born out of wedlock, and a statistical majority of homes had two parents and one income stream. A single paycheck allowed those families to live a middle-class life. Today, the majority of American households have two or more income streams and need that and more to live a middle-class life. This means Christians have less discretionary money and time. All of this impacts the church.
Then there are generational differences in approaches to giving. The older you are, the more you trust institutions and are willing to give them your money. The younger you are, the less likely you are to trust institutions, and you believe volunteerism and product endorsement are equal to giving.
When a 65-year-old dies or leaves your church, how many millennials will it take to replace the loss in giving? Hypothetically, let’s say it takes 10. Purely from a business perspective, what is the customer acquisition cost to get 10 millennials to attend versus one person who is 65? It’s high-dollar. It takes more money to enfold more people, and all you can do is hope they give. You’re spending more to get more but won’t be able to catch up. This and a number of other sociological factors are impacting the American church’s economic sustainability, and pastors are kind of like the frog in the kettle. It’s all happening in real time, but they don’t know how to fix it. Most don’t realize they’re only managing decline.
There’s also the possibility that in the future churches could see increases in outgo, in the form of taxes they’re currently exempt from paying.
One-hundred percent. The federal government made tax-exemption of churches a federal law in 1913 in recognition of the social services being provided for the community that the government would otherwise have to spend more money to perform. It’s not a biblical birthright. It’s really a transactional thing. What the government gives, the government can take away. Will that happen? I don’t know. In Pennsylvania, churches are taxed on all of their property except their sanctuaries. Many of us saw the October 2019 CNN interview with Beto O’Rourke, who threatened that tax-exempt status for religious institutions could someday be taken away. The fact that such a mention is even on the table ought to shake us to the core. The American church is woefully ill-positioned for looming financial disruption. The time to proactively pivot is now.
What have you done at Mosaic to prepare for such circumstances?
Passion for the community and our desperation for funding led us to innovation many years ago. In 2012 we purchased an abandoned Kmart for $1.7 million. One year later, we rented half of it to a fitness club we were able to attract to the inner city. By renting it to them at reduced rates, we were able to lock in a 20-year contract, capital investments of $1.7 million, and jump the value of the property to $4.1 million. We created nearly 20 jobs, local crime declined by 19 percent, we’re generating tax revenue, and we redeemed abandoned property. Through that plus other rent contracts with small businesses, we generate $12,000 a month in income, which is equal to 75 percent of our monthly mortgage. Our goal is to someday look our people in the eye and say that not one penny of their giving is paying the mortgage.