The soul business: How cemeteries make money (or don’t)

by The City Wire staff ([email protected]) 20,608 views 

The old saying “whistling by the graveyard” may have new context for anyone who has seen a cemetery but never thought about how one makes money.

According to Kelly Lowell, manager of Benton County Memorial Park in Rogers, the days of stand-alone private cemeteries have been largely replaced by a business model where a cemetery and funeral home are partnered.

“For us, it’s really been about having the funeral home here on the premises. That’s the long-term aspect of it. I think having it where we can work both places is an important part of it,” Lowell said.

Having funeral home staff work the cemetery business is what allows Benton County Memorial Park to not run into overhead issues, including staffing and grounds maintenance.

“For us, our (customers) expect a cemetery that is well taken care of as opposed to a country cemetery (maintained by volunteers). It helps with the manpower situation. It takes a lot of time and a lot of resources to maintain a cemetery. For a funeral home, we can share staff. For us, that’s what makes us different. With the amount of work that goes into it, you really need people that can work both places,” he said.

As a result of the level of care required to maintain the cemetery to Lowell’s standards, plots can run as high as $360 for the least expensive plot on site, while others can run as high as $600.

But included in those prices is a fee required by the State Cemetery Board of Arkansas.

“They are what are called perpetual care cemeteries. People might say that they’re in the business of making money, for-profit cemeteries,” Lowell said. “What happens is if you’re not governed by a cemetery board or you’re not a city-owned cemetery, or if you’re not affiliated with a church, then you have to be perpetual care. With everything that sells, a percentage of that money has to go into the perpetual care fund. It is then held at a bank and overseen by the state cemetery board.”

In the case of Benton County Memorial Park, the fee ranges from $60 to $100 and is included in the sale of the plots. Should the cemetery go broke, the State Cemetery Board will then tap into the banked perpetual funds for maintenance of the cemetery.

“The only way it can be touched is with permission from the government,” Lowell said. “It’s also a positive thing for a family because they know whatever happens, there will be money set aside for a nice place to come to. They’ll never have to worry about weeds growing up or leaving messages and not getting a return call. That’s the advantage of it.”

Cemeteries also profit through the opening and closing of grave sites, typically charging as much as the plot itself to dig the grave and then again to bury the remains. The fee can run higher if the burial takes place on a weekend or holiday.

An alternative to perpetual care cemeteries are non-profit or public-owned cemeteries.

One public-owned cemetery is Oak Cemetery in Fort Smith, which charges a flat $400 for each plot regardless of location or size — standard, infant, or cremains. As a result of the flat rate, Fort Smith Parks and Recreation Director Mike Alsup said the cemetery has become heavily subsidized.

“In our case, Oak Cemetery doesn’t make money. It doesn’t break even. We operate with money from the tax base in order to stay open.”

In 2013, Alsup said the city had spent $148,940 on the cemetery upkeep, maintenance and staffing while only bringing in revenues of $80,712, a little more than half of the operating cost.

Alsup said with the high costs associated with running a cemetery, he’s “not sure why cities got into the cemetery business.” He said the difference between a public or non-profit cemetery and perpetual care cemeteries was essentially the cost.

“I’d say it was to offer a more affordable funeral for people who couldn’t afford it. It’s a good service the city offers,” Alsup said.

Lowell said while cost is a very likely concern for some, he said for those looking for a permanent resting place perpetual care was the way to go.

“We’re probably on the higher end in terms of cost, but we tend to have a lot more personal attention for a family.”

And Lowell said the ultimate goal at Benton County Memorial Park was to break even, using the funeral home to help prop up a business that often is unprofitable.

“Our goals are a bit different than the average cemetery. We want to maintain it nice and have it compliment the funeral home,” he said. “That’s the wave of the future. You can’t just do one thing anymore. You need to diversify. It helps the funeral home, too, to have prices lower for people. The old days of having a funeral home, you’d see people working a crossword puzzle if they weren’t doing something. Those are the days of the past. If they have that kind of overhead, they won’t be that successful in the future.”