An Economic Perspective of Religious Organizations Abstract
In the process of studying religions, we often overlook the secular aspects of religious
organizations. This paper examines the basic flows of money in different spiritual
organizations, and attempts to correlate the types of income with the structure of the
priestly hierarchy. This analysis is by no means comprehensive. In the end, more questions
are raised than are answered.
Introduction
For all the mythological and sociological components of religion, religious organizations
operate under the same restrictions as any other secular establishment. Religious
organizations can be characterized as multi-generational institutions with distinct rights,
privileges, and liabilities; the essential definition of a corporation. While the sources of
income and the liabilities are substantially different from a standard company, an economic
analysis of religious behavior allows us to compare religions in certain areas. The goal of
this paper is to ignore the philosophy, and view religion with a purely economic
perspective1.
In this analysis of religious organizations, I will attempt to identify the sources of revenue
for different religious organizations, explain different hierarchies, and attempt to draw
some conclusions of the interactions of money and organization. This topic is expansive,
and as such I will often simplify or identify further fields of research, rather than getting
too off topic. In the end, I hope to provide a basic understanding of the complexities of
religious finance.
Revenue
The single most important economic means of distinguishing religions is through the
source of money. Adam Smith, in his seminal work The Wealth of Nations, identified two
basic types of (Christian) religions in Europe by their sources of revenue. He characterized
the “vigorous” (new Protestant) religions as “unendowed,” which forced them to be
“directly dependent” on the contributions of practitioners (pg 860). The behavior of the
new religions strongly contrasted the older, established organizations, which relied on
titled lands and indirect support (taxed tithes). I will attempt to expand and modernize this
comparison.
After examining the operations of different religions, I have identified 5 different
mechanisms by which religions raise money to finance ongoing operations. These sources
are: 1 A purely economic analysis of religious behavior is somewhat cynical, but hopefully
insightful.
•Member Contributions
•Revenues from lands and businesses
•Government Support
•Licensing Fees (e.g. Kosher)
•Pilgrimages
While most of the meanings are clear, the later two need to be explained. Licensing fees
refers to an action or the right to an action required of a religion’s practitioners which a
minister is paid to authorize. Pilgrimages are an often overlooked indirect source of
