Considering Church Space Rental
Should a congregation use offer its building in an effort to generate ancillary income? I believe that different congregations can faithfully answer that question both a "yes" a "no" or a "maybe." However, in whatever way the church chooses to answer the question, I would hope they would do it eyes-wide-open.
For churches open to ancillary income, here are some thought as a place to get started and some resources that might help. Keep in mind that the Christian Church in the Southwest is not a law firm, and at many point along the way, your church may need the guidance of a lawyer.
1. Start with fiduciary responsibility
Fiduciary responsibility is a term the legal profession uses to name the commitments any stakeholder (board member, elder, decision-making staff person) needs to attend to. In general, stakeholders have the (a) duty of care--to treat that which is entrusted to them by the church with the same attention as they would their own property or affairs; (b) duty of obedience--to abide by the stated and agreed to policies of the by-laws and other governing documents; (c) duty of loyalty--when acting as a decision-maker for the church to seek the best interests of the church; to acknowledge any conflict of interests between what's best for the church and what might be in one's personal best interest or a business interest. Every church should have a conflict of interest policy.
CCSW produced a video to be used in our Ministerial Boundaries Training (but helpfu here as well): Fiduciary Responsibilities Video. We have permission to share this video with CCSW and Disciples congregations, but we do not have right to share it beyond our circle of congregations.
A paper on “Fiduciary Responsibilities, Conflicts of Interest, and Church By‑Laws” by Frank Sommerville: Download document
A PowerPoint on basic church tax rules: “Basic Church Tax Rules” PowerPoint
The key is that your decision‑makers understand their fiduciary responsibility and are able to recognize and handle conflicts of interest appropriately.
2. Conflicts of interest: what and why
A conflict of interest is not an automatic disqualifier. It simply means someone has a personal interest that might pull in a different direction than the church’s best interest. When that happens:
The conflict should be acknowledged openly.
The person with the conflict should not participate in the decision (they “recuse” themselves).
The board follows its conflict‑of‑interest policy and documents the process.
Example: If a member sells Mary Kay, Pampered Chef, or another product and wants to rent space regularly, they have an interest in shaping the church’s policies so their business can rent space at a low cost and so the church avoids tax liability. That does not make them a bad person or untrustworthy. It simply means the church needs to name the conflict and handle decisions in a way that protects the congregation’s mission, values, and operations. And that person should not participate in decision-making around building use policies.
3. Connecting mission and building use
It's important that a congregation define its mission, vision, and values before opening themselves up to rental. Group rentals that align with the stated mission of the congregation relate differently than groups that may have access to renting the space but have a purpose outside the scope of the church's mission. With cottage industries, you may want to allow groups to rent, but with the advice of an attorney you recognize that such groups would need to be charged fair-market rental rates and that the church would need to account for that income as "unrelated business income" and pay taxes on the proceeds.
Once the basics are in place:
Your decision makers understand their fiduciary responsibilities.
Your mission statement gives you a clear sense of what kinds of partnerships fit your values.
You are ready to explore cost‑sharing and income‑generating partnerships.
You can then begin shaping a simple business plan around a few key areas:
4. From principles to a basic plan
Management & governance
Clarify purpose and guardrails: why you are doing this (mission fit, hospitality, stewardship) and what kinds of uses are off‑limits.
Decide governance: who has authority to approve users, fees, contracts, and exceptions (board, trustees, staff).
Set written policies: building‑use policy, priority of church events, expectations for behavior, and cancellation rules.
Establish the legal framework: review insurance, waivers, contracts, zoning/occupancy, and potential unrelated business income with legal/financial counsel--consult actual legal professionals and insurance providers.
Define what “good” looks like:
How much income does this need to generate to be worth the church's effort?
What's acceptable wear‑and‑tear and where is the line for recouping for damages?
Renting space to groups, even groups with clear connections to the ministry of the congregation, will change the dynamics of the congregations day-to-day function. So, the whole congregation should be brought into the planning early.
Operations (space and procedures)
What spaces are available for rental? One church may decide that its sanctuary can be host to piano recital or other artistic performance; another congregation may want to limit access to the sanctuary to only those things which are clearly worship. Again, not advocating for a single right answer there for every church, but naming the "eyes-wide-open" aspect of the decision making.
Identify what times are available, what times are not available, and how to handle contingencies like funerals. Ask me (Andy) how I know not to accept wedding requests for the Saturday before Easter.
Identify what you're willing to do for outside groups (set-up, coffee/tea/water, clean-up).
Develop procedures: booking workflow, keys/access, setup/teardown, cleaning expectations, locking up and alarms.
Plan for additionaL maintenance and long‑term facility needs.
Marketing & “sales”
Identify likely users: music teachers, recovery groups, neighborhood associations, nonprofits, small weddings, community events, etc.
Clarify why someone would choose your building (location, parking, price, ethos, acoustics, kid‑friendliness, etc.).
Create simple promotional tools: a web page or one‑page PDF with photos, room capacities, rates, and contact information.
Choose channels: website, social media, word of mouth, local nonprofits, schools, and wedding/event listings.
Standardize inquiry responses: who answers and how quickly you respond.
Your congregation may find it wise to prioritize regular, recurring users over one‑off events. For example, a weekly Kiwanis meeting that pays a modest fee can be more sustainable than a series of unrelated one‑time events at a higher rate, because regular users can be trained to access, use, and secure the building with much less demand on volunteers or staff.
You may also want to look at organizations that help congregations think about space and community partnerships. One widely respected example is Partners for Sacred Places.
Finance & accounting
Decide what rates you will charge and what level of income would make this “worth it.”
Estimate added costs: utilities, custodial, repairs, staff time, insurance, supplies.
Decide how payments, deposits, and refunds will be collected and recorded.
Determine where this income is designated in the church budget.
Human resources & roles
Assign a coordinator who is empowered to say yes/no and manage the process.
Identify supporting roles: bookings, communication, on‑site hosting, setup/teardown, cleaning, and tech support.
Provide training in hospitality, safety, emergency procedures, and conflict handling.
Clarify how you will compensate or recognize significant extra work by staff or volunteers.
Address safety and safeguarding, especially for groups working with children or youth.