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Earthly Empires

By William C. Symonds, with Brian Grow in Atlanta and John Cady in New York
BusinessWeek Online

There's no shortage of churches in Houston, deep in the heart of the Bible Belt. So it's surprising that the largest one in the city -- and in the entire country -- is tucked away in a depressed corner most Houstonians would never dream of visiting. Yet 30,000 people endure punishing traffic on the narrow roads leading to Lakewood Church every weekend to hear Pastor Joel Osteen deliver upbeat messages of hope. A youthful-looking 42-year-old with a ready smile, he reassures the thousands who show up at each of his five weekend services that "God has a great future in store for you." His services are rousing affairs that often include his wife, Victoria, leading prayers and his mother, Dodie, discussing passages from the Bible.

Osteen is so popular that he has nearly quadrupled attendance since taking over the pulpit from his late father in 1999, winning over believers from other churches as well as throngs of the "unsaved." Many are drawn first by his ubiquitous presence on television. Each week 7 million people catch the slickly produced broadcast of his Sunday sermons on national cable and network channels, for which Lakewood shells out $15 million a year. Adherents often come clutching a copy of Osteen's best-seller, Your Best Life Now, which has sold 2.5 million copies since its publication last fall.

To keep them coming back, Lakewood offers free financial counseling, low-cost bulk food, even a "fidelity group" for men with "sexual addictions." Demand is brisk for the self-help sessions. Angie Mosqueda, 34, who was brought up a Catholic, says she and her husband, Mark, first went to Lakewood in 2000 when they were on the brink of a divorce. Mark even threw her out of the house after she confessed to infidelity. But over time, Lakewood counselors "really helped us to forgive one another and start all over again," she says.

Disney Look
Osteen's flourishing Lakewood enterprise brought in $55 million in contributions last year, four times the 1999 amount, church officials say. Flush with success, Osteen is laying out $90 million to transform the massive Compaq Center in downtown Houston -- former home of the NBA's Houston Rockets -- into a church that will seat 16,000, complete with a high-tech stage for his TV shows and Sunday School for 5,000 children. After it opens in July, he predicts weekend attendance will rocket to 100,000. Says Osteen: "Other churches have not kept up, and they lose people by not changing with the times."

Pastor Joel is one of a new generation of evangelical entrepreneurs transforming their branch of Protestantism into one of the fastest-growing and most influential religious groups in America. Their runaway success is modeled unabashedly on business. They borrow tools ranging from niche marketing to MBA hiring to lift their share of U.S. churchgoers. Like Osteen, many evangelical pastors focus intently on a huge potential market -- the millions of Americans who have drifted away from mainline Protestant denominations or simply never joined a church in the first place.

To reach these untapped masses, savvy leaders are creating Sunday Schools that look like Disney World (NYSE: DIS - News ) and church cafés with the appeal of Starbucks (NasdaqNM: SBUX - News). Although most hold strict religious views, they scrap staid hymns in favor of multimedia worship and tailor a panoply of services to meet all kinds of consumer needs, from divorce counseling to help for parents of autistic kids. Like Osteen, many offer an upbeat message intertwined with a religious one. To make newcomers feel at home, some do away with standard religious symbolism -- even basics like crosses and pews -- and design churches to look more like modern entertainment halls than traditional places of worship.

Branding Whiz
So successful are some evangelicals that they're opening up branches like so many new Home Depots (NYSE: HD - News) or Subways. This year, the 16.4 million-member Southern Baptist Convention plans to "plant" 1,800 new churches using by-the-book niche-marketing tactics. "We have cowboy churches for people working on ranches, country music churches, even several motorcycle churches aimed at bikers," says Martin King, a spokesman for the Southern Baptists' North American Mission Board.

Branding whizzes that they are, the new church leaders are spreading their ideas through every available outlet. A line of "Biblezines" packages the New Testament in glossy magazines aimed at different market segments -- there's a hip-hop version and one aimed at teen girls. Christian music appeals to millions of youths, some of whom otherwise might never give church a second thought, serving up everything from alternative rock to punk and even "screamo" (they scream religious lyrics). California megachurch pastor Rick Warren's 2002 book, The Purpose-Driven Life, has become the fastest-selling nonfiction book of all time, with more than 23 million copies sold, in part through a novel "pyro marketing" strategy. Then there's the Left Behind phenomenon, a series of action-packed, apocalyptic page-turners about those left on earth after Christ's second coming, selling more than 60 million copies since 1995.

Evangelicals' eager embrace of corporate-style growth strategies is giving them a tremendous advantage in the battle for religious market share, says Roger Finke, a Pennsylvania State University sociology professor and co-author of a new book, The Churching of America, 1776-2005: Winners and Losers in Our Religious Economy. A new Pope has given Catholicism a burst of global publicity, but its nominal membership growth in the U.S. stems largely from the influx of Mexican immigrants. Overall, the Catholic Church's long-term decline in U.S. attendance accelerated after the recent sex-abuse scandals, there's a severe priest shortage, and parish churches and schools are closing in the wake of a financial crisis.

Similarly, the so-called mainline Protestants who dominated 20th century America have become the religious equivalent of General Motors Corp. (NYSE: GM - News) The large denominations -- including the United Methodist Church and the Episcopal Church -- have been shrinking for decades and have lost more than 1 million members in the past 10 years alone. Today, mainline Protestants account for just 16% of the U.S. population, says University of Akron political scientist John C. Green.

In contrast, evangelicalism's theological flexibility gives it the freedom to adapt to contemporary culture. With no overarching authority like the Vatican, leaders don't need to wrestle with a bureaucratic hierarchy that dictates acceptable behavior. "If you have a vision for ministry, you just do it, which makes it far easier to respond to market demand," says University of North Carolina at Chapel Hill sociology professor Christian Smith.

With such low barriers to entry, the number of evangelical megachurches -- defined as those that attract at least 2,000 weekly worshippers -- has shot up to 880 from 50 in 1980, figures John N. Vaughan, founder of research outfit Church Growth Today in Bolivar, Mo. He calculates that a new megachurch emerges in the U.S. an average of every two days. Overall, white evangelicals make up more than a quarter of Americans today, experts estimate. The figures are fuzzy because there's no common definition of evangelical, which typically refers to Christians who believe the Bible is the literal work of God. They may include many Southern Baptists, nondenominational churches, and some Lutherans and Methodists. There are also nearly 25 million black Protestants who consider themselves evangelicals but largely don't share the conservative politics of most white ones. Says pollster George Gallup, who has studied religious trends for decades: "The evangelicals are the most vibrant branch of Christianity."

The triumph of evangelical Christianity is profoundly reshaping many aspects of American politics and society. Historically, much of the U.S. political and business elite has been mainline Protestant. Today, President George W. Bush and more than a dozen members of Congress, including House Speaker Dennis Hastert, are evangelicals. More important, the Republican Right has been fueled by the swelling ranks of evangelicals, whose leaders tend to be conservative politically despite their progressive marketing methods. In the 1960s and '70s, prominent evangelicals like Billy Graham kept a careful separation of pulpit and politics -- even though he served as a spiritual adviser to President Richard M. Nixon. That began to change in the early 1980s, when Jerry Falwell formed the Moral Majority to express evangelicals' political views. Many of today's evangelicals hope to expand their clout even further. They're also gaining by taking their views into Corporate America. Exhibit A: the recent clash at software giant Microsoft.

As they thrive, though, there are growing tensions, with some mainline Protestants offended by their conservative politics and brazen marketing. "Jesus was not a capitalist; check out what [He] says about how hard it is to get into heaven if you're a rich man," says the Reverend Robert W. Edgar, general secretary of the liberal National Council of Churches.

Especially controversial are leaders like Osteen and the flamboyant Creflo A. Dollar, pastor of World Changers Church International in College Park, Ga., who preach "the prosperity gospel." They endorse material wealth and tell followers that God wants them to be prosperous. In his book, Osteen talks about how his wife, Victoria, a striking blonde who dresses fashionably, wanted to buy a fancy house some years ago, before the money rolled in. He thought it wasn't possible. "But Victoria had more faith," he wrote. "She convinced me we could live in an elegant home...and several years later, it did come to pass." Dollar, too, defends materialistic success. Dubbed "Pass-the-Dollar" by critics, he owns two Rolls Royces (NasdaqNM: RYCEY.PK - News) and travels in a Gulfstream 3 jet. "I practice what I preach, and the Bible says...that God takes pleasure in the prosperity of his servants," says Dollar, 43, nattily attired in French cuffs and a pinstriped suit.

Hucksters?
Some evangelical leaders acknowledge that flagrant materialism can raise the specter of religious hucksterism à la Sinclair Lewis' fictional Elmer Gantry or Jim and Tammy Faye Bakker. "Our goal is not to turn the church into a business," insists Warren, the founder of Saddleback megachurch in Lake Forest, Calif. After The Purpose-Driven Life made him millions, he repaid Saddleback all the salary he had taken over the years and still lives modestly. Cautions Kurt Frederickson, a director of the Fuller Theological Seminary in Pasadena, Calif.: "We have to be careful when a pastor moves into the CEO mode and becomes too market-oriented, or there might be a reaction against megachurches just as there is against Wal-Mart."

Many evangelicals say they're just trying to satisfy demands not met by traditional churches. Craig Groeschel, who launched Life Church in Edmond, Okla., in 1996, started out doing market research with non-churchgoers in the area -- and got an earful. "They said churches were full of hypocrites and were boring," he recalls. So he designed Life Church to counter those preconceptions, with lively, multimedia-filled services in a setting that's something between a rock concert and a coffee shop.

Once established, some ambitious churches are making a big business out of spreading their expertise. Willow Creek Community Church in South Barrington, Ill., formed a consulting arm called Willow Creek Assn. It earned $17 million last year, partly by selling marketing and management advice to 10,500 member churches from 90 denominations. Jim Mellado, the hard-charging Harvard MBA who runs it, last year brought an astonishing 110,000 church and lay leaders to conferences on topics such as effective leadership. "Our entrepreneurial impulse comes from the Biblical mandate to get the message out," says Willow Creek founder Bill Hybels, who hired Stanford MBA Greg Hawkins, a former McKinsey & Co. consultant, to handle the church's day-to-day management. Willow Creek's methods have even been lauded in a Harvard Business School case study.

Hybel's consumer-driven approach is evident at Willow Creek, where he shunned stained glass, Bibles, or even a cross for the 7,200-seat, $72 million sanctuary he recently built. The reason? Market research suggested that such traditional symbols would scare away non-churchgoers. He also gives practical advice. On a recent Wednesday evening, one of his four "teaching" pastors gave a service that started with 20 minutes of music, followed by a lengthy sermon about the Christian approach to personal finances. He told the 5,000 listeners about resisting advertising aimed at getting people to buy things they don't need and suggested they follow up at home by e-mailing questions. Like Osteen, Hybel packages self-help programs with a positive message intended to make people feel good about themselves. "When I walk out of a service, I feel completely relieved of any stress I walked in with," says Phil Earnest, 38, a sales manager who in 2003 switched to Willow Creek from the Methodist Church he found too stodgy.

So adept at the sell are some evangelicals that it can be difficult to distinguish between their religious aims and the secular style they mimic. Last December, Prestonwood Baptist Church in Plano, Tex., staged a spectacular Christmas festival, including a 500-person choir, that attracted 70,000 people even though the cheapest ticket was $20. Throughout the year, some 16,000 people take part in its sports program, which uses eight playing fields and six gyms on its $100 million, 140-acre campus. The teams, coached by church members, bring in converts, many of them children, says Executive Pastor Mike Buster.

Gushers of Cash
Kids are often a prime target audience for megachurches. The main campus of Groeschel's Life Church in Edmond, Okla., includes a "Toon Town" of 3D buildings, a 16-foot high slide, and an animatronic police chief who recites rules. All the razzmatazz has helped Life Church quadruple its Sunday school attendance to more than 2,500 a week. "The kids are bringing their parents to church," says children's pastor Scott Werner.

Such marketing and services help to create brand loyalty any CEO would envy. Willow Creek ranks in the top 5% of 250 major brands, right up with Nike (NYSE: NKE - News) and John Deere (NYSE: DE - News), says Eric Arnson. He helped develop a consumer-brand practice that McKinsey then bought and recently did a pro bono study for Willow Creek using that methodology.

Other megachurches are franchising their good name. Life Church now has five campuses in Oklahoma and will expand into Phoenix this fall. Pastor Groeschel jumped the 1,000 miles to Arizona after market research pinpointed Phoenix as an area with a large population but few effective churches. Atlanta's Dollar, who is African American, has pushed into five countries, including Nigeria and South Africa.

All this growth, plus the tithing many evangelicals encourage, is generating gushers of cash. A traditional U.S. church typically has fewer than 200 members and an annual budget of around $100,000. The average megachurch pulls in $4.8 million, according to a 1999 study by the Hartford Seminary, one of the few surveys on the topic. The money is also fueling a megachurch building boom. First Baptist Church of Woodstock, near Atlanta, for example, has just finished a $62 million, 7,000-seat sanctuary.

Megachurch business ventures sometimes grow beyond the bounds of the church itself. In the mid-1990s, Kirbyjon Caldwell, a Wharton MBA who sold bonds for First Boston before he enrolled in seminary, formed an economic development corporation that revived a depressed neighborhood near Houston's 14,000-member Windsor Village United Methodist Church, which he heads. A former Kmart now houses a mix of church and private businesses employing 270 people, including a Christian school and a bank. New plans call for a massive center with senior housing, retailing, and a public school.

For all their seemingly unstoppable success, evangelicals must contend with powerful forces in U.S. society. The ranks of Americans who express no religious preference have quadrupled since 1991, to 14%, according to a recent poll. Despite the megachurch surge, overall church attendance has remained fairly flat. And if anything, popular culture has become more vulgar in recent years. Still, experts like pollster Gallup see clear signs of a rising fascination with spirituality in the U.S. The September 11 attacks are one reason. So is the aging of the culturally influential Baby Boom, since spirituality tends to increase with age, he says. If so, no one is better poised than evangelicals to capitalize on the trend.