Thursday, March 7, 2013

Why synagogues run a deficit

The other day, someone asked me regarding a large local synagogue, "They must never have money problems, right?" He pointed to their busy catering operation, and their long membership list, as the basis for this assumption.

Without discussing any particular shul, though, I can say with some confidence that every shul which attempts to serve its members with more than a simple space for davening runs a deficit, whether small or great. I have three reasons for this statement:

1: The staff's goal is to provide services
As with any non-profit, the goal is not profit, but rather services. Any money which comes in, whether budgeted revenue or surprise contribution, is plowed back into the operation in order to provide more services - which cost money.
[As I noted above, the exception is the synagogue that is just a room in which to daven.]

2: The budget-setters harbour religious optimism
Many shuls function with the belief, spoken or unspoken, that "things will work out", and they will survive, regardless of any immediate crisis. We have a hard time imagining that the shul could collapse. This leads to a degree of fiscal laxity.

3: The customers set the price
Manufacturers determine their prices based upon their own costs, and what they believe the market will bear. The same is true for service providers. In synagogues, though, the paying customers – members of the board – are the ones who decide how much they need to pay in dues. [The same is true for schools with parent-based finance committees.] The result is that dues are calculated based on a negotiation between the customers' needs and those of the institution, and the synagogue will not be able to rely on dues to fund their budgets.

My point is that a synagogue's financial stability is not dependent on the salaries of the staff, or the size of the building, or income from a catering operation. Rather, it depends on the attitude of the people who decide what services to provide, the people who set the budget, and the people who set the price.


  1. Shalom RosenfeldMarch 7, 2013 at 3:24 PM

    "the exception is the synagogue that is just a room in which to daven"

    Rav Moshe discusses the rebbe who opens a shteibel as a way to make a living; he demands an apology (and funds!) when the local praying population opens a new place down the block instead of his! Okay so he got mad and called the congregation "commies" in some of his sermons ... so what?

    Is that a shul in which you'd like to be?

  2. And reason #4: Many heavy users of synagogue facilities don't join or donate.

    Note that the 'Mi sheberach' distinguishes between 'kol mi shem'yachadim batei knaisiot litfillah" and "u'mi shebaim betocham lehitpallel".

  3. Shalom-

    While I agree that that's inappropriate, I'm not sure that it contributes to deficits on a systemic level. Such people don't normally lead to greater expenses.