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.
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.
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.
•Revenues from lands and businesses
•Licensing Fees (e.g. Kosher)
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 religious revenues, but pilgrims essentially bring and contribute...