(While this column could be considered a sequel to last month’s article about business education (or the lack thereof) in seminary, enough new ground is broken here on the issues of church budgeting that it can also be read as a standalone work.)
Just as in December, many churches were finalizing their budgets for fiscal year 2012, so too in January do these same churches (including mine) present those budgets to the rank-and-file membership—in other words, the folks who are in the pews each week—for official approval at their annual general meeting. One of the questions—whether spoken or unspoken—often is, “are we spending too much or too little on personnel?” In other words, does the pastor make too much money, or not enough, or just the right amount?
There is a simple reason for this curiosity--in many parishes (again, including mine), more money is spent on personnel than on either operations or mission work. So, if the plurality of the budget is going to personnel, it stands to reason that personnel would be where the most attention is given, and where it is most likely controversy would ensue.
Even in churches where that is not a controversial issue, measures are often taken to obscure those figures. I have seen church budgets that put ALL staff salaries on a single line item, making it nearly impossible to know how much each staffer is paid. I have also heard of churches where the staff is justified in wanting to protect themselves, such as a church, when discerning whether to cut back on the number of services they offered on a Sunday morning, had a person anonymously ask if the pastoral staff would take a pay cut since they would be doing half as much work. This is NOT the case in my parish--each part of my compensation (cash salary, housing allowance*, Social Security and Medicare tax offset**, health insurance, and pension) each gets its own line item in the budget, and my compensation has not been the focal point of any conflicts thus far. I am not saying those two facts are related--only that both are true.
*: Housing allowance is an IRS tax deduction for pastors that allows us to classify all of the expenses involved in our housing (generally rent/mortgage, utilities, furnishings, upkeep, and insurance) as fully tax deductible for income tax purposes. As long as my parish officially designates a portion of my salary as a housing allowance, I can claim it as a deduction on my tax returns. This benefit is of somewhat less use for pastors who live in a church-provided parsonage, because the fair rental value of the parsonage is considered income by the IRS and must be declared by the pastor for self-employment taxes.
**: While pastors are considered employees for income tax purposes, we are considered self-employed for payroll tax purposes, meaning we are on the hook for the entirety of the 15.3% of combined Social Security/Medicare taxes. Some parishes, like mine, will generously pay their pastor an additional stipend of 7.65% of their salary + housing allowance to offset this. However, many parishes do not, and for those that do, that additional stipend is considered income by the IRS and must be declared by me (I do, however, get to claim the employer portion of self-employed payroll taxes as a deduction on my 1040).
In any case, the best rule of thumb I have ever heard when it comes to pastoral salaries is this one from my-pastor.com: Don’t make your pastor live on more faith than you do. Put a different way: the pastor (assuming this is a full-time pastorate) should make somewhere in the neighborhood of whatever the median household income in your community is. This is the case for me, and it is also a rule of thumb that is essentially Biblical in nature, as 1 Corinthians 9:14 states that “those who preach the Gospel should get their living from the Gospel.” (CEB) Traditionally this has been interpreted that pastors should, whenever possible, be able to live solely on the means given to them by their ministry settings (parish, hospital, etc).
But this rule is tricky, because unlike almost every other profession that bases its compensation at least somewhat on educational qualifications (doctors and lawyers, for instance, earn a premium in part because of the educational level their jobs demand), clergy salaries are instead based on their parishes, rather than their qualifications, and so questions will often crop up as a result. This is wholly understandable—in terms of time invested (though not necessarily tuition invested), a pastor generally has the equivalent education of a lawyer, but while it is socially acceptable to pay lawyers a premium for the skills obtained in that education, owing to (among other things) the fairly black-and-white stance the Bible takes on people accumulating wealth, this is not quite the case for pastors--unless you belong to Creflo Dollar’s “church,” but that’s an entirely different kettle of fish.
Other variables often get introduced based on, for instance, the size of the pastor’s family. I’m easy in that regard—unmarried with no kids means that I don’t need a large salary to live on, but outside of the Roman Catholic Church, I realize that I am largely the exception and not the rule. Other pastors may have other obligations that must be taken into monetary consideration, such as the increasingly common extreme loads of student debt carried by many of today's seminary graduates.
Finally, all of this becomes doubly tricky considering the amorphous nature of any pastor’s job responsibilities. For a solidly middle class wage, I am a motivational speaker, a coach, a teacher, a handyman, a confidant, a counselor, a chauffeur, an event planner, and an amateur social worker. I am the very first point of contact for many, many people down on their luck who have fallen through the cracks of society’s safety net. I am a person who people will go to when they feel like they have nowhere else to turn.
But here’s bottom line: for most pastors, including me, we would not have it any other way.
Yours in Christ,
Eric
Edit, 3:00 pm 1/11/12: As a postscript, it was awesome for me to hear from my seminary alma mater that there will in fact be a pair of financial seminars offered in Spring 2012, taught by an accountant who is a GTU alum. This is a great step forward!
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