Strategies for Shul Financial Success – Part 2 – Some Basic Principles

This is part 2 of Strategies for Shul Financial Success. You can read Part 1 here. I think it’s clear to most, that the Orthodox community is moving to smaller Shuls, which need a different financial structure from the big Shuls of the past.

In strong observant Jewish communities like Monsey, Kew Gardens Hills, Passaic, Lakewood, Teaneck, Five Towns and Brooklyn most small to medium size Shuls are not struggling. The financial struggle is occurring mainly among the big Reform, Conservative and Orthodox synagogues who have declining memberships and big budgets.
Take away: most existing Orthodox Shuls should not radically tamper with their existing financial structure.

The Chabad free membership model is based on the fact that most Shluchim are committed to their communities/territories for the long term and they often finance their Shul activities with schools. In the small town Chabad communities, the expenses are lower and the Shul can be financed through the employment of the Shluchim and contributions from a handful of donors.
Take away: don’t emulate the Chabad free membership model unless you’re covering your budget from sources outside of the membership or from a handful of members. Kiruv Shuls need to provide a flexible fee structure with free membership for beginners.

Most of the Shuls starting up today are on the small side, between 30 and 100 families. As I calculated in Back of the Napkin Cost To Run a Shul, the cost of running a 50 member Shul with a $30,000 Rabbi’s salary is about $75,000 or $1,500 per member family.
Take away: your Shul will probably cost between $1,500 and $2,000 per member.

To hire an experienced Rabbi, which is critical for your long term success, you need to pay between $50,000 and $100,000. Even the young brilliant amazing personable Rabbi, that you do hire for $20,000 – $30,000, will probably not stay with you at that salary for more than 3-5 years. This is one of the major problems Shuls face today. As we transition to smaller Shuls with smaller budgets, we can not adequately finance the Rabbis we need to be successful.
Take away: your small Shul structure will probably not be able to finance the Rabbi you need.

The three major sources of income for a Shul are membership dues, High Holiday seats and an Annual Dinner or Melava Malka. Mi she-beirakhs and facility rentals are secondary sources. Any shortfalls will need to be made up by donations from wealthier members. Your actual fee structure should be based on a budget spreadsheet which has been critically reviewed by a few wealthier Shul members.
Take away: create a budget and have it reviewed by a few wealthier members of your Shul