An Economic Perspective of Religious Organizations

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. Patrick Cody Religion & Science 2 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 perspective. 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. Patrick Cody Religion & Science 3 • 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 religious revenues, but pilgrims essentially bring and contribute money to a sacred place or shrine. If the pilgrims themselves to not directly contribute, the local businesses will contribute to the religion, since they benefit from the presence of travelers. In my survey of international religions, I discovered that Hinduism and Shinto, both decentralized religions without a strong hierarchy, do not rely on member contributions for their organizational expenses. Instead, these religions use a combination of alternative means. Being among the oldest practiced religions in the world, Hinduism and Shinto benefit from the revenues of religion-owned lands and businesses whose origins lay deep in antiquity. The governments of both India and Japan both strongly identify their religion with their national identity, and therefore support the religious organizations in various ways. Finally, the doctrine of both religions encourages frequent pilgrimages to variety of shrines and religious events, specifically the Ganges River in India and the Kyoto shrines in Japan. The frequent and often massive pilgrimages provide significant direct and indirect revenues for the religious organization. Different aspects of these religions depend on different revenue sources for their operations, such that a Shinto shrine may be dependent on pilgrim revenues, while a Shinto school may be government funded. The economic behavior of Eastern religions is rarely analyzed due to the difficulty in acquiring aggregate data on the revenues of these religions, but this remains an interesting field of future study. Money is Power Before analyzing the flows of money and their effects, the types of hierarchies found in religions should be clearly designated. In my cursory examination of major religions, I identified four major archetypes of religious hierarchies: Patrick Cody Religion & Science