Opportunity Cost – The cost of an alternative that must be forgone in order to pursue a certain action. Put another way, the benefits you could have received by taking an alternative action.
Suppose that you are a pastor of a church community with a limited budget. You can invest X tithe dollars into a program for recovery ministry or you can invest those same tithe dollars into a new discipleship program. The Law of Opportunity Cost calls pastors to remember a couple of things:
- You can only spend the tithe dollars on one program. You cannot double spend the allotted tithe dollars.
- The value you gain in one program must be measured against the value lost in not starting the other program.
- Value can be plus or minus.
This is a critically important concept for pastors. Leaders are not often choosing between a good and a bad option — They are choosing between two good options, with one of the options being better than the other. The key for pastors is to always remember that the goal in decision making is value added to the church. Thus, with limited resources a Pastor must make the better decision based on which direction will add value, cumulatively speaking, to the church body.
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