How Do Cemeteries Make Money or Stay Open When They’re Full?

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When you think of a family-owned business, you probably don’t immediately picture a cemetery. Graveyards and cemeteries, though, are typically for-profit enterprises that operate much like any other business. 

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But the business of operating a cemetery is different from other ventures in one key way: the cemetery’s product (burial plots) is ultimately limited. 

And cemetery owners have to keep maintaining the plots they’ve sold, even after there are no more plots to sell. So how do cemeteries make any money with these limitations? 

How Cemeteries Monetize with Services

Most cemeteries are required to put a percentage of their grave sales into a “perpetual care fund” during their prime operating years. That is, the years when the cemetery isn’t full and still has plenty of burial plots left to sell. 

The cemetery is then expected to run off that savings fund forever, or “perpetually.” But saving up for eternity isn’t a prospect most cemetery owners and operators find easy to comprehend. 

They can work around the perpetual care fund requirement by reducing the cost of cemetery plots and earning the majority of their income from services, instead. 

Here are some of the services cemeteries might monetize to earn extra money on the side.

Opening and closing services: One of the main services a cemetery sells is the opening and closing of gravesites—i.e., gravedigging. This is where the cemetery digs a grave before burial and fills the grave afterward. 

The service of opening and closing the grave often comes paired with—but still separate from—the grave itself. A cemetery has to charge an additional fee for digging the grave and filling it back in so that it can pay its professional staff to complete the task. 

Opening and closing services can also include the opening and closing of mausoleums or columbariums if the cemetery has those on offer. 

Gravestone installment: The other central service cemeteries offer is gravestone and headstone installment. In fact, installing gravestones and headstones is where many cemeteries make most of their money. 

Gravestones and headstones can be simple or more elaborate. But no matter its size or level of detail, a headstone must be securely placed to last as long as possible. 

Cemeteries capitalize on that necessity by specializing in placing headstones perfectly. Then they sell the service of headstone installment to families that choose their cemetery. 

Funeral home services: Some cemeteries maximize the number of services they can offer by opening up a funeral home on the premises. By pairing a cemetery with a funeral home, the business can sell numerous additional services. 

A funeral home sells services like funeral planning and hosting, as well as body preparation. Having a funeral home onsite can also make a cemetery more desirable to families who want to keep the funeral and burial as simple as possible. 

Partnering with other businesses: Not every cemetery has its own funeral home. But many graveyard businesses partner up with their local funeral homes and earn a percentage from referrals. 

Cemeteries might also partner with related businesses like flower shops to create a funeral network. 

Through partnering with businesses in this way, a cemetery can earn a small percentage of those other businesses’ profits based on how many paying customers the cemetery sends their way. 

Added maintenance: As mentioned, cemeteries are responsible for maintaining their grounds in perpetuity. For that reason, many states require cemetery operators to invest in a Perpetual Care Fund during their prime operating years. 

But a cemetery might also offer additional maintenance services to customers who want something more. For example, you could pay the cemetery a monthly or yearly fee to maintain flowers planted on the grave of your loved one. 

Or, you might pay a stipend to have the staff polish your loved one’s headstone on a regular basis to keep it in good condition. 

Paying for this type of maintenance service is typically optional, as it’s something you could perform yourself if you chose to. 

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How Cemeteries Stay Open When They’re Full

The unique challenge of operating a cemetery is that once the graveyard is full, you can’t sell any more of your central product: gravesites. 

Cemeteries can still monetize some of their services, like specialized gravesite and headstone maintenance, after the cemetery stops accepting new clients. 

But there are also some additional methods of staying open that cemeteries put to use when they run out of usable space. 

Perpetual care trust: The main way cemeteries remain open when they’re full is by withdrawing funds from their perpetual care trusts. 

Each state has different regulations and requirements when it comes to cemetery operations. But most legislation requires cemetery owners to dedicate a percentage of their profits or sales to a perpetual care fund. 

A typical requirement is that funeral operators deposit 10% of gravesite sales to a perpetual care trust. 

That percentage only applies to the sale of the grave plot itself, however (not other goods and services, and it’s typically limited to a number of “prime operating years” where the graveyard is mostly empty. 

For those reasons, most cemeteries eventually run out of funds in their perpetual care trusts.  

Exhumations and reinterment: Ideally, a cemetery plot is a permanent and final resting place. Sometimes, though, exhumations happen. 

Whether it’s for law enforcement or another reason, the cemetery can charge a fee for completing an exhumation and reinterment of a grave. 

If, for any reason, you need to reverse the grave of a loved one and re-bury them, you’ll likely pay the cemetery a fee to do so. 

Individual perpetual care trusts: Cemeteries are usually responsible for maintaining their own perpetual care trusts. But in states where that isn’t the case, you might be able to pay into an individual perpetual care trust for your or your loved one’s gravesite. 

Even cemeteries who have general perpetual care trusts might allow customers to purchase individual trusts. An individual perpetual care trust, in this case, could cover additional maintenance and ensure that your gravesite receives the best care possible. 

Expansion: Another way cemeteries stay open once all of their grave plots are taken is by expanding their property. While it isn’t always possible, a cemetery might be able to purchase a neighboring lot and create even more land for gravesites. 

In this way, cemeteries can prolong their prime operating years and continue making money from grave plots and primary services like grave-opening and -closing. 

Municipal management: If the business behind the cemetery closes down after it’s full, the cemetery itself typically remains. In this instance, the local government might take over the management of the cemetery’s maintenance. 

Since there’s no more usable land, the government doesn’t have to worry about selling additional gravesites.

Volunteerism: Similarly, the local community can take personal responsibility for managing and maintaining a cemetery if the business goes under, or if it business can no longer afford the cost of maintenance. 

Neighbors might volunteer their time for lawn-mowing, headstone-cleaning, and other maintenance tasks. 

Changes in the Cemetery Industry

We like to think of a cemetery as a permanent resting place for the deceased. But what happens when there’s no more room to bury our dead? There’s a finite amount of available burial space in every city, state, and country, and we’ve nearly used up all of that available property. 

Luckily, attitudes and opinions about burial are changing as space runs out. More and more, people are showing a preference for cremation over burial. 

Researchers believe that by 2035, nearly 79% of people will choose cremation rather than traditional burial. And with full cemeteries relying mostly on their perpetual care trusts to care for their grounds into eternity, cremation may become even more popular than that.


Sources

  1. Samuelson, Tracey. “How do cemeteries make money?” Marketplace. 13 October 2014. www.marketplace.org/2014/10/13/how-do-cemeteries-make-money/
  2. “The Basic Laws Pertaining to Cemeteries.” Law Offices of Stimmel, Stimmel & Roeser. www.stimmel-law.com/en/articles/basic-laws-pertaining-cemeteries
  3. Katz, Brigit. “Cremation Rates Reach All-Time High in the U.S.” Smithsonian Magazine. 17 August 2017. www.smithsonianmag.com/smart-news/cremation-rates-reach-all-time-high-us-180964478/

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