A number of pastors have contacted me recently because they’ve been approached by a local business to advertise on their livestream worship service. In some cases, the congregation has business owners who’d like to support the church through their company. In other cases, the COVID church lockdown revealed to marketers a significant audience out there watching church online. As a result, they’re approaching pastors about advertising on the livestream – but those pastors aren’t sure it’s either appropriate or worth the money.
So I asked a range of highly respected pastors, marketing experts, and other Christian communication professionals what they’d recommend. While we didn’t find a consensus, we did get a wide range of interesting responses:
– I wouldn’t allow it. The main reason is you don’t know the ethics of that business owner. Second, church is run from the tithes and offerings. Lastly, the singular focus of the online worship experience is the gospel and it tends to be blurred when we make it a profitable broadcast. Also, if that was OK, then why would you not put advertisements in your pre-roll video loop in the worship center? It’s the same concept. Movie theaters do it, but I don’t think it’s appropriate for churches. – Executive director of a national church media ministry
– I think “why not?” I’d be open to it at the beginning or at the end. As long as that company’s leadership aligns with our values. For instance, I would love to be sponsored by an organization like Pray.com or Museum of the Bible. – Pastor
– If it’s a sponsoring company or product with no value conflict (florist, clothing store, etc.) it shouldn’t be a problem. But the slippery slope is when the church starts depending on that money to the point they can’t live without it. Then compromises start to be made. The sponsors may decide the pastor should back away from a Biblical stance, or soften his doctrine. When a church or ministry becomes dependent on the revenue, then the sponsor could become too powerful, and that would never be acceptable. – Christian media producer and former network executive
– We have a local business sponsor our livestream and it offsets our expense. However, we don’t run a video commercial, but put up a “This livestream is sponsored by ____” type graphic at the start of the service like PBS does. We’ve never had any criticism. – Pastor
– I wouldn’t touch it with a 10-foot pole. It feels desperate to me. And some things should remain sacred and a place of worship is that place. – Church marketing director
– I’m not sure. I like it but part of me is hesitant. – Pastor
– I think it’s a very slippery slope. You are bound to get criticism from some people which probably could offset any gains with a decline in giving. Also how do you arbitrate who gets to advertise and who doesn’t? – Church marketing and fundraising consultant
– I think it had better be worth the money! If I did it I would be very intentional about telling the congregation. I’d want them to know that it pays the expense of the livestream, or the church mortgage, or the children’s ministry. – Marketing agency CEO
– I think a graphic on the screen at the end would work. – Church fundraising expert
– I think once you open that door you will struggle to close it. And others will come wanting to also place ads. If you say no to some (who may be members of the congregation), then it can appear to be playing favorites. I think there’s more to be lost than gained. – Church marketing consultant
– Well, churches advertise on other platforms so I’d probably treat it the same way. Does it make sense for them? Are the advertisers part of the church? – Church branding strategist
– It seems like a creative idea but I think I would be concerned about the perception of people watching. We’re bombarded with ads already and then to have more during online church service… I’m not sure people are ready for that. – Pastor
– I’m doubtful about doing it on the livestream, although we accept advertising on our podcast version of the message. – Church communication director
– I wouldn’t because allowing that is a quasi-endorsement and complaints about businesses will reflect on the church which would increase their liability. But most importantly, “Church” is a solely values-based entity different from secular organizations. Just as pastors shouldn’t go into business with their church members, so shouldn’t the church itself. Short answer: “No!” – Church leadership consultant
As a bonus, I asked attorney David Middlebrook, founder of “The Church Lawyers” about the question from the tax perspective. Here’s his response:
Churches and other nonprofits are certainly permitted to sell commercial time slots to other organizations. The question is ultimately whether: (i) the activity will be deemed nontaxable sponsorship income to the church; or (ii) taxable advertisement income (UBIT) to the church. Here is a very brief article that does a good job explaining the basic difference:
In the situation here, a church selling commercial slots to other organizations for the purpose of television commercials, the IRS would very likely deem the church’s actions as commercial activity because the IRS generally deems “the sale of separate spaces . . . [as] an unrelated trade or business.” IRS, Pub. No. 598, “Tax on Unrelated Business Income of Exempt Organizations,” at 6 (“Sales of Advertising Space”), available here (rev. Mar. 2021); see id. (concluding that the sale of separate advertising spaces by a nonprofit is an unrelated trade or business in the context of a national association of law enforcement officials publication that offers advertising spaces).
The church can always request a private letter ruling from the IRS about whether its “sale” of commercial airtime, under the church’s specific facts of the situation, is nontaxable income or UBIT. We could gladly assist in requesting a private letter ruling from the IRS. The technical requirements for a proper ruling request are here.
So now you have a range of perspectives from pastors, communication and marketing directors, fundraising consultants, and even an attorney. The question is:
What do you think?