Megachurches and the Billion-Dollar Businesses Behind Them

Travel across the country long enough and you will likely come across a megachurch. They look less like a chapel than a mall or sports arena, providing space for thousands of worshippers each week. More than pure theology, many of these megachurches feature attractions that would elicit the envy of theme parks. They pull out all the stops for attendees, keeping them coming back by offering a sense of novelty, excitement, and spectacle.

Given the size of some of these churches, their incomes are equally impressive. Thanks to the adoption of marketing strategies and technology, many megachurches reach audiences all over the world and rake in millions, if not billions, of dollars. As megachurches grow, however, they blur the lines between church and business and potentially take advantage of their tax-exemption status. Let's explore megachurches and the billion-dollar businesses behind them. (For an in-depth look at the rise of megachurches, read the history of the American megachurch.)

To write an article on megachurches and the billion-dollar business behind them, 24/7 Tempo used publications like Forbes Magazine, Premier Christianity, and the Hartford Institute for Religion Research. After that, we confirmed aspects of our research using sites like IRS.gov and The Sacramento Be.

For better or worse, America has always featured heavy religious underpinnings, even before America the country was established. Puritans were some of the first Europeans to settle on the east coast. The first Great Awakening occurred in the 1740s when a series of Christian revivals spread across the colonies, seeing a resurgence of evangelical religious enthusiasm amongst the populace. A series of Great Awakenings occurred on and off until the 20th century, suggesting a latent desire in the masses for religion.

The Second Great Awakening saw Charles Grandison Finney create the Broadway Tabernacle. Featuring space for over 4,000 attendees and dimensions that emphasized the pastors' pulpit, the Broadway Tabernacle acted as an early model of the modern megachurch. Much like modern equivalents, the Tabernacle also rented out spaces for increasingly secular events and discussions. This was followed by other large churches like the Baptist Temple in Philadelphia, Pennsylvania.

As America grew and entered the 20th century, waves of immigrants entered the country, bringing a wide variety of religious practices and rituals. While some people favored the fire-and-brimstone approach to worship, many churches realized they needed to expand their scope to account for different cultures and sensitivities. The churches that made it knew they needed to adopt a more "mass-appeal" approach to gain new followers year after year. Some would do whatever it took to survive a constantly shifting cultural landscape.

The 20th century went on and megachurches began to find favor among Christians in the United States. According to the founder of "Church Growth Today" John Vaughn, only ten churches fit the criteria of a megachurch in 1970. Twenty years later, America counted 250 megachurches. Within another two decades that number had exploded to 750. To be defined as a megachurch requires a sizeable congregation. On average, these organizations feature 3,646 weekly attendees but the numbers keep growing.

Currently, the largest megachurch is the Lakewood Church in Houston, Texas. Run by notable pastor Joel Osteen, the church features an average attendance of 25,060 congregants per week. As you run down the list, the numbers hardly diminish. The World Changers church in College Park, Georgia features over 23,000 attendees per week. The list goes on, with dozens of churches around the country boasting similar numbers and equally impressive incomes.

A lot of factors contributed to the rise and proliferation of the megachurch in the United States. The explosion of celebrity preachers and pastors, like Billy Graham, in the post-war period of the 20th century no doubt contributed to the growth of certain churches. Innovations in technology allowed religious leaders to reach a wider audience than ever before. As American society entered the Summer of Love, the Hippy Movement, and the Vietnam War, it slowly turned its back on a religious routine.

Simultaneously, large portions of the American public still craved a kind of spiritual regularity, perhaps as a defense against a rapidly changing world. Despite changing sensibilities and beliefs, a spiritual foundation remained in the hearts of many Americans. According to a recent study undertaken by the Barna Research Group, "81% of Americans believe in an afterlife of some sort, and almost the same number (79%) believe in the immortality of the soul."

Belief aside, people's social habits evolved in lock-step with their countrymen. A showmanship approach began to dominate much of the information fed to the American public, regardless of medium or topic. As the media increased its cultural cache, churches realized they needed to compete with entertainment to maintain their numbers and influence. This acute sense of a changing landscape no doubt contributed to the rise of the megachurch in the United States.

Protestantism plays a big part in the megachurch, but it's only one piece of the puzzle. Evangelicalism, too, contributes to the atmosphere of these large religious organizations. Nevertheless, many megachurches offer a sort of fusion of different sects and Protestant approaches. Enter one of these megachurches and you may be treated to a dizzying mix of old-school Baptist practices like the laying on of hands and speaking in tongues as well as more modern non-denominational practices like musical worship and informal Bible study. To attract an ever-growing list of followers, however, most churches (including megachurches) have adopted the "seeker-sensitive" model of church growth.

The "seeker-sensitive" approach involves welcoming newcomers of all shapes and sizes, adopting a more informal approach to Biblical teaching, and providing features that extend far out of the realm of pious religious worship. This technique was undoubtedly perfected by Pastor Chuck Smith at Calvary Chapel, a conglomeration of church organizations with origins in Pentecostalism.

As the late 1960s saw an explosion of grungy, long-haired hippies, pastors like Smith sought a way to attract them to his fellowship. Instead of viewing these hippies as a threat, he saw their presence as an opportunity. He realized if he could speak their language, accept their lifestyles, and accommodate their musical preferences, Smith could sign up a plethora of new members. An apocryphal story by one Calvary Chapel member suggests that after one attendee put up a "no bare feet allowed" sign, Smith promptly tore it down. In a true Christian spirit, he welcomed the unwelcome to further reinforce Christ's message.

After the revolutionary strategy of Chuck Smith at the Calvary Chapel, many pastors around the country adopted a more laissez-faire attitude to incoming members. Megachurch operator and best-selling author Rick Warren often dons Hawaiian shirts when preaching to congregants. More than that, however, the most successful modern megachurches capitalized on a society increasingly concerned with entertainment.

Anyone who's been to church enough times realizes that the story doesn't really change. You have the teachings of Christ, the expansion of his ideas by future followers, and the practical application of Christian principles in your own life. This routine perhaps speaks to the success of the Catholic Church. Mass happens every day at certain hours like clockwork. You arrive and witness the same liturgy that has been performed for nearly a thousand years. Others, however, craved novelty.

Enterprising pastors in the United States realized they needed to stand apart to attract new followers. They embraced the society of the spectacle, offering unexpected twists and surprises to an arguably stale model of fellowship. Slowly but surely, some churches grew into megachurches by embracing attractions, excitement, and a sense of showmanship–even glamour. Rick Warren's Saddleback Valley Community Church resembles a theme park more than a chapel. It features video games for children, reptile displays, an indoor aquarium, and more. This type of thinking extends to most megachurches, where the teaching of the gospel takes the lowest priority.

Getting people in the doors and keeping them there is what really matters, and megachurches will adopt all types of strategies to boost their numbers. Most people attend church not for an education or a history lesson but for a community. Megachurches meet this need by providing a plethora of activities, attractions, and even carefully designed branding. Churches make you feel like you have a community. Megachurches, however, put the community at the forefront to ensure followers keep coming back for more. Indeed, many megachurches like the Saddleback Valley Community Church resemble resorts more than churches. Its sprawling complex in Southern California includes manicured gardens, restaurants, outlets for coffee and ice cream, as well as multiple worship venues.

Entering the biggest megachurch in the United States, the Lakewood Church, feels like entering a sports arena or a taping of a popular television show. The 16,000-seat sanctuary centers around a large stage complete with fancy lighting, boom mics, and professional production quality. Pastors like Joel Osteen at the Lakewood Church put on a show. While leaders like Osteen offer a more superficial, feel-good reading of the Bible, the charismatic figurehead role plays an important part in the megachurch.

Each megachurch features a leader who stands above the pack. While they take different strategies, be it the laid-back attitude of pastors like Rick Warren or the meat-and-potatoes gospel-heavy teachings of Rick Bell at the Mars Hill Bible Church, these organizations often have a prominent figurehead. Perhaps recognizing the power of celebrity, megachurches can find marked success through the exalting of a certain pastor or church leader.

These church leaders are often charismatic, media and stage-ready, and able to effortlessly transition between theological teaching and showmanship. A megachurch requires a mega leader, one who has effortless communication skills and an ability to connect with a large, varied audience. The spectacle surrounding the actual worship in these megachurches must equal the gravitas of its leader. Otherwise, people feel disappointed. Charisma is undoubtedly important, but megachurches are big business and require a leader adept at navigating entrepreneurial practices and market strategies. (For famous religious leaders, discover how social media is making millionaire pastors.)

Megachurches have been around for several decades, but the business strategy behind them likely originates from Pastor Bill Hybels of the Willow Creek Community Church in Great Barrington, Illinois. Seeking to acquire new followers, Hybels and members of his student ministry went door to door in 1975. They asked people what kept them from going to church. Accepting all their concerns, Hybels then adapted his approach to meet his would-be followers' needs.

It turns out that people wanted a show. As such, Hybels became one of the first pastors in the United States to incorporate the use of video, dramatic interpretation, and contemporary music. He also allowed for a more casual dress code for congregants. Nowadays, the Willow Creek Community church features a staff of over 500 and serves as a model for evolutionary church strategies. Indeed, Willow Creek hosts popular seminars and conferences detailing church marketing strategies. The church also puts on big-name events to attract people who normally would never attend. They do this by hosting celebrities like country singer Randy Travis or NASCAR Champion owner and former Washington Redskins coach Joe Gibbs.

Business acumen plays a big part in the success of megachurches but technology plays a crucial role. The proliferation of easy-to-use technology including the Internet allows megachurches to regularly communicate with their members and track their interests. It allows megachurches to see incredible growth; they can track followers, post online sermons, and even field donations. Most megachurches feature online stores which further reinforces their status in communities. A spiritual practice is constant, and the internet and technology allow megachurches to exert an ever-present influence over their members and their religious routines.

Joel Osteen, the most successful megachurch pastor in the United States saw the writing on the wall early. The son of another notable preacher, Osteen dropped out of college to establish his father's television ministry. He also reinforced the presence of Lakewood Church by constantly running advertisements on local television channels and putting up billboards promoting the church across Houston. Now, the Lakewood Church ministry television network broadcasts in over 140 countries. Furthermore, the Osteen television ministry can be seen on the television sets of over 90% of the United States.

Kingdom Ventures is a publicly traded company created with the express purpose of helping churches grow their numbers through the use of media strategy and the implementation of technology. Founded in 1999, Kingdom Ventures operates through 12 subsidiaries to help thousands of churches grow their followings. They do this through teaching strategies on event planning, fundraising, media exposure, and upgrading audio-visual machinery to make church services more appealing. This blurring of church and business is not without its controversy. Kingdom Ventures disclosed in 2013 that they were subpoenaed by the Securities and Exchange Commission due to their handling of certain stocks and transactions.

One of the biggest selling points of say, opening your own church and growing the numbers until it makes million dollars is the tax exemption status. Under the statutes of the United States, IRC Section 501(c)(3) exempts churches and religious organizations from paying Federal income tax. All it requires is that a church is organized and operated exclusively for religious, scientific, educational, or other charitable purposes. Furthermore, the organization can't influence legislation or intervene in political campaigns. If churches meet the requirements, they become automatically exempt from income tax.

Churches are required to pay taxes on features and services that aren't substantially related to their religious, educational, or charitable purposes. Churches are also required to pay taxes on sales, payroll, and sometimes property. That said, the average megachurch brings in about $4.8 million in income every year, mostly through donations of followers. A savvy accountant can easily divert portions of that income to provide fancy houses and cars for pastors as long as they can justify it under church purposes.

This tax advantage, and the likely utilization of loopholes, create a curious and controversial notion of the megachurch. The modern megachurch looks more like a corporation than a small, pious operation. This year, the Freedom From Religion Foundation petitioned the IRS to remove the tax-exempt status of Calvary Chapel Chino Hills after its head pastor Jack Hibbs publically endorsed Republican U.S. Senate candidate Steve Garvey. The IRS didn't respond, but groups like the Freedom From Religion Foundation suggest that many megachurches make a mockery of the tax code with an increasing flaunting of wealth and political influence. While most megachurches have flown under the radar so far, it's hard to say what the future holds. The tax-exempt status of churches increasingly run like corporations begs the question: when does a church become a business? (For more wealthy pastors, explore the top 20 highest-earning pastors and televangelists.)