How Basic Economics and Effective Church Leadership Go Together

An excellent and practical pice on how the knowledge of economics can help us minister more effectively form Pastoralized.  

I’m currently about halfway through Thomas Sowell’s Basic Economics: A Commonsense Guide to the Economy. Not only have I learned a lot about economics, I’ve gleaned many lessons that can be applied in a church context. So much so that I wanted to share some things even before I finish the book.

First of all, I should dismiss the misconception that economics is primarily about money. Sowell states:

“Although the word ‘economics’ suggest money to some people, for a society as a whole money is just an artificial device to get real things done. Otherwise, the government could make us all rich by simply printing more money. It is not money but the volume of goods and services which determines whether a country is poverty stricken or prosperous” (p. 6).

So if economics isn’t about money, then what is it about? (I’m glad you asked.) The key principle of Sowell’s book, which he applies to over a hundred economic examples, is this:

“The key task facing any economy is the allocation of scarce resources which have alternative uses” (Basic Economics, p. 11). The discipline of economics studies how these decisions are made, and what their effects are on a society (Basic Economics, p. 3).

Let’s break this principle down with ministry language:

1. Your church has scarce resources: limited time, pastors, budget, volunteers, facilities, etc.

2. Your scarce resources can be applied to an innumerable list of alternative ministry uses: soup kitchens, small group curriculum, salaries, missions, etc.

3. Because you are finite, you have to choose only a few of those innumerable possibilities to allocate your scarce resources to.

These three things being the case, we may infer a principle of economically wise church leadership: out of all the ministry opportunities before you, allocate your limited resources to the most effective ministry opportunities. So, essentially, this is a matter of stewardship. Will you steward your resources for maximum kingdom impact?

How does this concept work out in everyday ministry decisions?

Here are some basic church resources, and the different uses they can be allocated toward:

1. How is your church building being used during the week? Your building, if you have one, is a major resource. How are you allocating it? Does it lie dormant during the workweek? Does it get used in ways that taxes your maintenance team without much ministry fruitfulness?

How could you use it for effective ministry without overextending your resources for maintaining your facilities? Could you make yourself available for a local parachurch ministry, like ESL classes or crisis counseling? Could you rent your space to some organization, providing a little extra income for your church, but also an opportunity to build relationships with people who don’t know Jesus?

2. What ministries are you funding in your budget? Do the line items on your budget change from year to year, because that’s how you’ve always budgeted? Or do they change every year based on your proactive strategic thinking about what ministries will be most fruitful?

Do a couple hundred dollars here and there go toward historic ministries led by longtime members that are showing little fruit for gospel growth? What ministries could explode if they were just given a little seed money to get going? Just like our personal budgets prove what is most important to us individually, church budgets reveal what is most important to the church. Is it effective ministry, or politics and status quo?

3. What are people being used for? Do you give your administrative assistant busywork just to validate his or her employment, or are you being intentional about the projects he or she works on? What could they do that would cause your ministry to be more effective? What ministries do your pastoral staff lead, and are they the best ones? Should they bring some ministries to an end so that they can launch new ones?

What ministries are your lay leaders heading up, and are they best? Or do you let them lead those ministries because some ministry is better that nothing (even though it detracts from the growth of those who are involved in that ministry)? And what about all the people in your church who aren’t serving? How can you start prospecting into their giftedness?

And there are many more ministry resources we could ask such questions about. These are important choices because how you use your resources matters more than the amount of your resources. Sowell states, “[economic] decisions and their consequences can be more important than the resources themselves” (Basic Economics, p. 3). This is because institutions with few resources – if they make the right decisions – can experience remarkable effectiveness. On the other hand resource-rich institutions can easily cripple themselves with poor decisions. The same is true for church ministries: even if you don’t have a big budget and a big building, you can still make a big impact for God’s kingdom. You just have to put those resources toward their most effective ministries.

To make these decisions wisely, you need a clear mission

Without a stated mission, churches tend to make decisions from an inward-looking, self-preservation attitude. Are our people happy, or are they complaining? Is this work too hard to be worth it? Will this affect giving? If this is how you measure the fruitfulness of your ministries, you will have only accidental long-term impact.

But a clear mission provides a measurement device for everything your church does. Our mission at Chapel Hill Bible Church is being transformed by the gospel: us, our cities, and our world. This statement provides all we need in order to know whether we are allocating our scarce resources that have alternative uses to our most effective ministries. Are people being transformed by the gospel, or not (a qualitative measurement)? Are as many people being transformed by the gospel as possible, or can we change things to impact even more people (a quantitative measurement)? Do we see this transformation happening within our church, locally, and globally? Based on where we see personal, gospel-driven transformation, we can make strategic and educated decisions on where to put our money, people, facilities, and attention.