Pastor helps churches rent out space for alternative revenue, not rely on offerings
Rather than letting unused church space go to waste, one pastor is helping churches gain revenue by renting out parts of their buildings.
“Our studies found that around 60% of churches have commercial kitchens, 30% have gyms, 100% have auditoriums, offices, and fully built-out childcare facilities,” said Justin Knapp, founder of SpaceTogether. “Our software looks at the space's availability, amenities, and functionality of the available space and then matches a nearby renter.”
SpaceTogether has grown to 15,000 users in four years and half its rental properties are churches. Knapp told The Christian Post that he got the idea for the business while he was pastoring his first church and struggling to pay bills.
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Normally, property and staff payments make up 80% of a church’s budget, according to Knapp. By offering rental space, churches can turn buildings from money losers to money makers.
Church buildings have excellent spaces congregations can rent to multiple businesses at once, he noted. Because churches have versatile buildings they don’t constantly use, they can earn significant amounts of money by renting.
A typical building on SpaceTogether’s website earns $19,032 over 14 months with only eight rented hours per week. Churches using his rental service often earn more than their operating costs.
When Knapp found that no one else was working to make rentals easy for churches, he started his own business to do so. He didn’t ever plan to become the CEO of his own $36 million business. He felt called by God to help churches make money by renting their facilities.
Knapp’s website functions like a dating website for businesses, he said. Both users enter their information and expectations for the relationship, then figure out the details themselves. Churches can choose rental partners that fit their priorities and principles on the site.
“We’ve found ourselves in this weird position where secular investors ask, ‘why in the world are you working with churches?’ And faith-based investors say, ‘you aren’t doing totally the Christian thing,’” he said.
Knapp maintained that while believers meeting in church is sacred, church buildings aren’t sacred. A building is a set of facilities to be used efficiently, he argued. Good stewardship means getting money out of a church’s resources.
“If churches do not find a way to create an alternate revenue stream, that building they call sacred will be gone,” he said.
Stabilizing the finances of a church focuses more on the Kingdom of God than sitting in an office reading, said Knapp. In his 13 years as a pastor, he has never seen a church member get angry that his church has stable finances.
The extra income independent of a congregation’s whims can even make it easier for churches to stay sacred. Pastors often tell Knapp there are subjects they feel called by God to preach about but which their congregations dislike, so they don’t speak about them. They love the idea of preaching about what they believe is important, but feel bound by their finances.
“When I ask, ‘How long have you been inauthentic in front of your congregation for attendance and cash?’ the room goes silent,” Knapp said. “If we had the shackles of finances and attendance taken off of our pastors, who knew what they could be saying?”
Alternate revenue sources for churches have also grown more important as tithing has dropped. Church donations have decreased due to COVID-19. A survey by Ministry Brands revealed that almost 60% of church leaders indicated that a reduction in giving income is one of the top challenges facing their church.
Churches that use SpaceTogether come from three main categories, Knapp explained. Some are young churches looking for a space to grow, others are older churches trying to pay bills and still others are churches on firm financial footing looking for ways to spend money and help people. Most churches on his platform tend to be young.
“The idea of sharing church space or a revenue model that isn’t 100% supported by donors is new. They’re trying to find a way to see how to do it the best. For folks that’s older, it’s harder to do that,” he said.
As COVID-19 spread across the country this year and forced many to stay at home, SpaceTogether saw a big drop in business.
“People were just scared. We had churches of a hundred people saying no to leads of $150,000 because they were afraid. A lot of leaders were frozen stiff,” he said.
After making changes in his business model, his numbers have risen again.
In the future, SpaceTogether plans to focus on work with large church denominations which already own hundreds of buildings, he said. A recent deal with the Evangelical Covenant Church tripled the size of SpaceTogether’s userbase.
Knapp said his business works on the same general principle of companies like Uber and Airbnb. Although working with customers sourced from the internet has risks, it’s now part of how the economy works.
“We’re sort of on the other end of the two-sided marketplace thing,” he said. “The truth is that anytime you share anything with anybody you are taking some of a risk, but thankfully there are so many insurance procedures.”
