GuideStone, our chief purveyor of advice on ministerial compensation, hates the compensation system expressed by the two sentences above.
Better said, the professionals there and in our state conventions and LifeWay prefer a different approach to ministerial compensation that most SBC churches are using.
While I think that my denominational staffers advocate for the better system, I’m not sure that churches have been weaned off of the natural methods of paying the preacher. That is, decide what the church has to allot for pastor pay and let (or work with) the pastor to divide this according to his preferences. My guess is that in a denomination of around 50,000 congregations where the average church size is 125 in worship attendance and the median size is 70 in worship, GuideStone experts lose this argument. My title expresses the more common experience shared by churches and pastors.
The latest effort to persuade churches is in the form of a 34 page “white paper” article by Southwestern seminary PhD student Christian Messemer, a former financial planner. The paper, “A Shift Toward Total Compensation: A Pastor’s Primer,” is available for download at Guidestone’s Compensation Planning resource page. I downloaded it. I read it. I understood it. It is a solid and helpful resource although a couple of notches above the level above a “primer.” I think it is a great effort but unlikely to find wide reading among my colleagues who may prefer the Baptist Press summary of the paper: Pastor Compensation Studied by Financial Planner.
The main point:
The biggest misunderstanding, Messemer writes in the paper, is the difference between gross wages and total compensation, and how pastors are at a disadvantage when compared to employees in other professions.
This is the difference in a church’s approach to paying the pastor. “Here’s your package, preacher” or “Let’s talk about salary and benefits. We will fund your retirement and insurance.”
The SBC’s experts and counselors see problems that can be identified as (a) churches are uninformed, (b) churches may be penurious with pay, (c) clergy are uninformed, (d) clergy are too passive in discussing pay, and (e) clergy tend to make poor long term financial decisions.
A possible solution is seen in compensation models but, alas, I’m not seeing this paper as moving the needle but nonetheless recommend it for those pastors and churches that want to be better prepared and informed.
A few things that are worth examining and discussing:
Ultimately, under the Lord, the pastor is responsible for his future, or, as I heard it aptly put years ago, “No one is going to take care of you, pastor.” GuideStone’s Mission Dignity program helps about 1,800 retired ministers and/or spouses. Outstanding! But, the average amount of help is $350 per month. The benefit to recipients shouldn’t be discounted but that amount is only about one-fourth of the average Social Security monthly check.
Pastors should have input on the components of their package. The easiest pay raise is the one that lets you keep more of your income. Many pastors can give themselves a raise by:
- maximizing their housing allowance and
- having an accountable reimbursement plan with the church whereby they receive some non-taxible income in the form of reimbursement; no SECA or income tax, and
- paying attention to what is taxable and what is not, especially in regard to health insurance.
Some churches may have a financial layperson who can help with this but no church I ever pastored did. Educate yourself and work with the church. The white paper is good in explaining these things, as is GuideStones Compensation Guide.
You cannot afford to neglect retirement contributions. I had to ask for this with my first church. It is great if the church will fully fund this (10% of total compensation is the usual figure offered as a goal), or will match your contribution. If you have a total “package” to work with then it’s up to you to recognize that if you are going to have sufficient retirement income, you need to start saving early and continue consistently. Try some deferred enjoyment now in favor of planned enjoyment later. Typically, retirees have several streams of income: they continue to do some level of work and earn, they have Social Security, they have a retirement fund out of which they receive income. Don’t shut off one of these streams by failing to save.
Insurance is a problem for clergy and laity alike. All of the churches I pastored agreed to pay my family comprehensive health insurance. This was not a big issue for the first couple of decades but it’s much more expensive now. I always worked with my church to minimize this expense to them. It is probably easier for your church leaders to understand this part of compensation. The may not know a lot but do know it is expensive.
It is unlikely that churches will change their compensation approach. The average church is like a small business. They know exactly what their expenses and expected revenues are and have a total figure in mind for their clergy staff. But, it’s always good for the pastor, present or prospective, to have thorough discussions about matters of pay.
Let’s be honest here. This isn’t exactly a scintillating topic but state conventions and other denominational entities are doing their best to help educate. Everything an SBC pastor or church needs in order to manage financial matters is quickly and easily available. It’s up to the pastor, staff, or lay leader to find it and use it.