How Will Ministry Brands Buyout of 7 Church Website Companies Affect Churches?

In 2012 Ministry Brands began rapidly purchasing technology companies that serve churches. In 4 years they have purchased at least 23 companies including:

• 7 companies that develop church websites
• 9 companies that provide online giving systems
• 5 companies that provide church management systems
• 1 company that provides background checks

The big question everyone is wondering about is what will happen to all these companies and the churches they serve?

What Ministry Brands is Saying

Lauren Hunter of Church Tech Today recently got in touch with Ministry Brands and wrote about this.

In the article, Brad Hill, Chief Operating Officer for Ministry Brands is quoted as saying, “What does it really mean when there’s a change in ownership? First and foremost, our primary concern is customers and employees.” However, he did indicate there could be layoffs, “It’s a small minority of cases where we purchase a company and need to make adjustments with staff.”

John Dalzell, executive vice president of sales and marketing is quoted, “Our Overall guiding principle is that we want each of the brands to retain their integrity and independence. Each brand has their own unique make up.” However, he goes on to say, “Part of our DNA and fabric is to get churches to the right solution, even if it’s a different brand than what they came in for.”

3 Reasons Companies Buy Competitors

There are only three reasons companies buy another company that provides the same service they already provide.

1. Technology acquisition. If a company as an innovative technology they want to use in their brand, a company will buy the second company and then integrate that technology into their own product. Google, Apple and Microsoft do this all the time.
2. Reduce competition. Buying competitors increases the company’s market share and decreases competition. Having a greater market share and fewer competitors helps a company’s bottom line.
3. Increase efficiency & profit. When companies are combined, duplicate functions can be eliminated. The company only needs 1 data center, 1 sales team, 1 support team, etc. When these duplicate functions are eliminated, it saves the combined company money and increases profitability.

Ministry Brands for Sale

In August, the Wall Street Journal reported, “Ministry Brands LLC, a private equity-backed software provider for faith-based organizations, has retained Bank of America Corp. to explore a sale of the company and expects to garner $1.5 billion or more in the event of a deal.”

Clearly, Ministry Brands is interested in creating a company that is as valuable as possible to sell to other investors.

What Will Ministry Brands Do?

On the Ministry Brands website, it indicates their founders are Christians with a “shared vision to serve churches and faith-based organizations with a technology epicenter.” I have never spoken with anyone at Ministry Brands, but give them the benefit of the doubt on this.

However, it seems extremely unlikely that Ministry Brands will continue to operate 7 website development systems, 9 online giving systems or 5 church management systems. John Dalzell said, “Part of our DNA and fabric is to get churches to the right solution, even if it’s a different brand than what they came in for.” That tells me change and consolidation are inevitable.

Even if you believe Dalzell’s other statement, “Our Overall guiding principle is that we want each of the brands to retain their integrity and independence.” It’s highly unlikely that the people who invest $1.5 billion to buy Ministry Brands will consider that principle more important than increasing efficiency and profitability by consolidating down to 1 or 2 companies in each field.

What Does This Mean for Churches?

If your church is served by one of the companies now owned by Ministry Brands, you’re probably going to see some changes. You may be moved from one platform to another Ministry Brands platform it considers better. That could be a positive or a negative depending on your perspective.

As companies are consolidated, you’ll probably see more consistent 24/7 support. However, with a larger company you’ll be more likely to speak to a different support person each time you contact them, and you’ll have less access to the director of support or CEO of the company. And you never know, the next owners might decide to outsource their support to India as other billion dollar tech companies have.

Overall, there will probably be fewer options for church management systems, online giving systems and church websites. With less competition, prices may also go up.

How Will This Affect OurChurch.Com?

As co-founder of OurChurch.Com, which has been helping churches with their websites for almost 20 years, we’ve never been terribly concerned with what other church website companies do. Many have come and gone over the last 2 decades. Sure, we keep an eye on trends, but we’ve never been ones to chase fads or copy others.

Our goal has never been to be the biggest church website design company, but to listen to God’s direction, follow where He leads, and for those Christian organizations which he leads to us, to help them live out their mission online.

So, no matter what Ministry Brands does, we don’t expect it will affect us or our clients much.

What do you think?

• Do you think Ministry Brands’ purchase of 20+ tech companies that serve churches is good or bad for churches? Why?
• We would especially love to hear your perspective – positive or negative – if your church uses one of the services now owned by Ministry Brands or you work for one of the companies bought by Ministry Brands.

Edit 10/18/16 10:30 AM ET: While we love to see discussion in the comments below, there is also a very active discussion on this post/topic in the Church Communications Facebook group.