We are all entrepreneurs but churches are leading the pack

On a recent trip to Mombasa‘s north coast, I came across a petrol station named “New Life International Energies.”

My enquiry indicated it’s owned by a church by the same name. I noted that the branding was similar to that of well-known international oil companies.  Church investments are no longer news. They own land, office blocks, schools, universities and other assets. Churches are the most noticeable buildings in the rural areas.

Why is the church joining the investment frenzy? One is incentives, particularly tax. Two is the availability of capital, from church followers or savings. Remember the church has been there for ages and owns lots of assets, accumulated over time. 

The other explanation is that the followers are weighed by other demands for their money and the churches are feeling the pinch. Why not hedge against the fall in income by investing? The church has costs from wages to maintenance. Could they be reacting to the competition? There are more churches and they are competing for the same market of followers. Why not invest for a rainy day? 

It seems even churches go through a life cycle, from start to growth and maturity. Is church investment an indicator they are reaching the maturity stage? 

The most convincing reason for church investment is that the returns are used to help the less fortunate members, self-taxation sort of. We shall not ask for evidence. 

It’s hard to discuss the morality or ethics of such investments. My analysis is purely economic but faced with a paucity of information. If churches could publish their accounts, we could do a better analysis of revenue streams and costs. 

Maybe, we should start church accounting in our business schools, or is it covered under not-for-profit accounting? Economists could argue the tax exemption of the church gives them an upper hand.

The church investment is further complicated by the spiritual part. Who should benefit from such investment? What are the spiritual dividends and how can they be accounted for? Beyond physical assets, have churches invested in bonds? Stocks or money markets? What of the “export sector” where churches cross borders?  It’s hoped that all the investments benefit as many members as possible. 

The churches‘ ownership structures also fascinate me; they are not very public beyond their charismatic leaders.  Can they avail of their organograms?

What of their regulation? Beyond tithes and offertories, we have not put much thought into the economics of the church. Economists avoid non-objective issues like faith despite the reality that most Kenyans profess some faith. From the look of things, it could be an interesting area to explore either out of curiosity or the need to understand the earthly part of the churches.