Religion: Billions into a Black Hole

Religion is a hugely costly machine, but what does it produce?  Let’s compare religion to a big corporation since we know how those work.

Graph argues that corporations provide more value for the money input than religions.
Take General Motors (on the left of the red revenue scale in the figure above).  In 2010, U.S. sales were $73 billion, and that bought three million vehicles.  Pretty simple—$73 billion goes in and three million vehicles comes out.

We can peek inside to see where the money goes.  Of the incoming revenue, 87% went to automotive cost of sales—manufacturing and materials purchasing.  Next, 8% to sales/marketing and G&A (General and Administrative)—the cost to sell the vehicles plus overhead.  The final 5% was profit.

Compare this to religion (on the right side of the revenue scale above).  In the U.S. for the same year, donations to religion were $101 billion.  But that isn’t the only input.  Few GM employees spend their free time selling or manufacturing cars, no matter how much they love the company, but religious believers do the equivalent all the time.  They volunteer in all sorts of ways for the benefit of religion: evangelizing, serving as deacon or pianist, doing repairs on the church structure, making food for potlucks and bake sales, and so on.  How much is this worth?  Multiply by a couple hundred million American Christians and we get an extra 50% of income (a very rough guess).

Where does the church’s income go?  We don’t know for sure.  The IRS grants tax-exempt status to qualified organizations in return for those organizations opening their books to show the public how they spent their money … except for churches and ministries.  All we know is that every year about $100 billion (plus a lot of volunteer effort) goes into a black box.

Obviously, personnel must be a huge cost—there are roughly 600,000 paid clergy in the U.S.  Buildings, land, and other capital outlays are another biggie—megachurches don’t just build themselves.

So, what’s the output?  This black box gets twice the input of GM; what’s religion’s equivalent of six million vehicles?

Nothing goes back to society through taxes.  Maybe 10% passes through to good works outside the church.  (Again, this is just a guess since churches’ books are closed.)  Maintenance of the congregation is another expense, and to some extent this is worthwhile—helping those in need and providing a community for the members.

The rest is the church’s equivalent of marketing—recruiting new members and keeping current members within the fold.  General Motors knows that customers of Buick and GMC vehicles won’t remain customers without ongoing marketing, and churches know the same.

And maybe that’s the best way to see religion.  Religion is a very inefficient route to charitable giving (imagine a charity with 90% overhead), and religion isn’t necessary to get the social benefit of community.  Those benefits could be provided without the inefficient machinery of the church.  Religion must be propped up with marketing as is done with Chevy and Cadillac (with an imaginative dose of fire and brimstone thrown in) to remind customers that they’ve backed the right horse.

GM doesn’t need faith to stay in business, but it’s the only thing keeping religion going.

Inspiration credit: Richard Russell suggested this comparison.

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12 thoughts on “Religion: Billions into a Black Hole

  1. I wonder if suggesting to people that all the work they’ve done for the church should be paid at their going rates.
    Let’s say I am a plumber who charges $70/hour and I redid the plumbing at my local church for 5 hours. While we had an oral agreement, I wonder if a judge in small claims would argue that I should be expected to work for free.

    With a piss-poor economy, suggesting people can generate some income by “small-claiming” that they never got paid from the church would entice them a bit?

    That would be very amusing.

  2. You forgot to mention the benefit of those three million vehicles to the economy, Bob — providing transportation to and from work, etc. Granted, there are also costs — pollution, injury and death from accidents, and old cars ending up in landfills (though a lot is recycled now). But with religion, where is the “added value?” Pastors who own several mansions and drive expensive cars. The faithful who forego life saving medical treatment in lieu of “faith-healing.” Honor killings. Child rape. So much for contributing to society!

  3. Hey Bob,

    You said, “Maybe 10% passes through to good works outside the church. (Again, this is just a guess since churches’ books are closed.)”

    You aren’t differentiating between religions yet you do make it a point to call out Christians. This article is probably one of the most uncompelling articles you have written. Saying that you are guessing at how much money translates to those outside the church makes me wonder why you wrote this? I know plenty of churches that don’t have closed books. I know of plenty of churches that give a lot of their income to those around them. I know that there are churches that abuse their people’s funds. To make general statements the way you do just isn’t fair. And this just doesn’t compare to the other articles you have composed.

    Travis

    • Let me make another general statement then: it’s very easy to find information about how nonprofits spend their money, except for religious organizations.

      Why are those organizations that you’d think would be most unconcerned about people looking over their shoulder, those most concerned about being squeaky clean in their bookkeeping, are those who don’t file the IRS form 990? All nonprofits are required to disclose their finances with this form … except churches.

      Why defend this practice? It makes all churches look bad, even the ones who are open with their books! Why isn’t it the Christians who are leading the charge to demand that this bizarre loophole be closed? Wouldn’t transparency across the board polish the image of Christianity overall?

      • Yeah I do not know why that was put into place to begin with. I was not there nor do I know much of the law. What I do know is that the churches I have been a part of give out full expense reports to their members and make them available to the non-members. I am not sure it is a fair criticism to say churches are “looking over their shoulder.” Some are without a doubt because the love of money leads to evil but, at least in my experience, many are open with their books. And I am not defending any practice. I honestly don’t know how different a non-profit is from an established church.

        • OK, then I’m glad I was able to spread the word. Tax-exempt status is one thing, and an argument could be made that this is reasonable for churches and other ministries. But hiding the books from the public that is providing this tax exempt status? Crazy. I hope you look for chances to undercut support for this exemption.

          And, of course, “open” doesn’t mean a church sort of opening its books in its own way and with its own restrictions; it means filing forms with the government that are easily searchable by any citizen (as is done for every other nonprofit).

          You said that you didn’t know much about how the IRS rules work. The IRS document “Instructions for Form 990 Return of Organization Exempt From Income Tax” is helpful here. Section B (Organizations Not Required To File Form 990 or 990-EZ) lists “Certain religious organizations,” including churches and the obvious variations on churches (page 6). Check there if you want more information on this exemption.

  4. Rather than force churches to conform with the violence of taxation the rest of us have to deal with, how about leveling the playing field by exempting everyone? Pointing guns at people and asking them to cough up tax money isn’t going to bring virtue to pastors and priests anyway. You just find creative ways to cook your books, hide profits, exaggerate expenses, etc. The IRS should be dissolved and stop calling paying tax a noble thing.

    • I’ve heard many in the atheist community argue that churches should not be tax exempt. However, my primary interest is to see the books. It’s apparently a fair deal for all the other nonprofits–they open their books and in return the public grants them tax-exempt status. And yet the churches act like they have something to hide. Like they’d be embarrassed if they were forced to show how the money was spent.

      I wonder–maybe that instinct is correct.

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