Thom Rainer on Letting the Church Know the Preacher’s Salary

bible-walletThom Rainer has provided a preview of some of the salary information gathered by the Leadership Network from a survey of 1,251 churches with 500 or more members. A fuller report will come out shortly.

Rainer only deals with a few of the survey’s conclusions regarding transparency of church pastor salaries. He reports,

  1. No churches made the salaries available to the general public. That is 0%. None. Zero. Nada. Out of more than 1,200 churches.
  2. Only 1% of the churches made the salaries available to the entire congregation. This data point was the most surprising and the most fascinating to me. I knew anecdotally that most larger churches do not give out the salaries to the full congregation, but I am really surprised that “most” equals 99%.
  3. Of all the churches in the study, 82% made the salaries known to an in-house group that deals specifically with personnel issues. That in-house group includes boards, personnel teams or committees, finance and budget teams, or some sub-group of these larger groups.
  4. Many of these churches likely offer a “hybrid” approach. This fourth point is not in the study, but comes from my own consultations and observations. Many churches do not make the salaries known to the congregation as a whole, but they are willing to share the information with church members individually on request.

… [T]his research is descriptive, not prescriptive. The Leadership Network team is simply offering the results of a study. 

In Churches of Christ, I routinely encounter great skepticism regarding preacher salaries.

  • Some don’t believe in paying the preacher at all.
  • Some want the preacher to live on the edge of poverty, as his job is spiritual and involves a level of commitment the other members haven’t made (which Gospel is that in?).
  • Some want the preacher’s salary disclosed to the entire church.
  • Some want the entire church to vote on the salary (and there are some Baptist Churches that do this, but it’s not a common practice in my experience. In fact, this survey pretty clearly shows it to be next to unheard of in large churches).

Now, what is it about being large (over 500) that makes the church less likely to share the pastor’s/preacher’s salary? I don’t know, but I have a theory or two:

  • Preachers in larger churches have more bargaining power. That is, there are far fewer preachers that would do well in a larger church — and large churches are very preacher -dependent. A small church may be held together largely by families and friendships. But at 500+, our consumerist culture and the sheer size of the congregation means a goodly number of the members are there for the excellent preaching. Smaller churches make do with the preacher they have — and will put up with weak sermons for excellent pastoral care and Bible class teaching. Big churches demand excellence in the pulpit.
  • In larger churches, there is less democracy just because it’s really hard to organize that many people democratically. This is especially true as the church gets to the 1000+ range. The leadership/membership dynamic changes.
  • Members of a large church understand that they have less individual influence than in a small church. Too many cooks. WAY too many cooks. And so they either decide they have confidence in the leaders or they attend elsewhere.
    • Big churches often have lots of novice members. And they are not ready to have substantial authority in the church. You can’t run a big church with its large programs based on votes of members who know nothing of church leadership.
    • That is, a church can’t get that big if the members insist on having the influence they had when the church had 200 members. The group dynamics change — a lot.
    • But this means the leaders have to conduct themselves with great care — as they have to exude concern for the members and make wise decisions for clearly spiritual reasons.
    • The trade off for individual influence is excellence in leadership decision making. But size doesn’t justify domineering. Rather, humility and staying in touch with the hearts of the members becomes more important because members will find it harder to be heard. That means the leaders have to become more approachable and more sensitive to the Spirit’s movement within the congregation.
    • Some intentional mechanism for membership input is essential. Which is why large churches often take lots of membership surveys. I’m good with this, but don’t think it’s enough. I think there has to be something more personal, as well, such as the leaders communicating and listening through small group leaders.

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  1. It would not surprise me if the national political climate will change to the point that churches will have to fill out IRS F 990s or the equivalent — and any of this kind of information will likely be inventoried.

  2. Here’s an interesting footnote. IRS Form 990 is the “tax return” for 501 (c) 3 organizations.

    One of the things required on a Form 990 is the name, average hours worked per week, salary and benefits of the top five salaried employees.

    So, by way of example, if you want to know the salaries of the presidents at ACU, Harding, Lipscomb, Pepperdine, it’s public information, which you can find out. go to http://www.guidestar.org, if you’re interested.

    However, local religious organizations are exempt from this disclosure.

    So, while we verbally say we hold ourselves to a higher standard, in fact, we abide by a lower standard.

  3. Just for fun, here are the salaries of Presidents of four church of Christ universities:

    McLarty at Harding (reported in 2013), $183,213 + $23,844 in benefits
    Shubert at Abilene Christian (reported in 2015), $263,420 + $106,330 in benefits
    Lowery at Lipscomb (reported in 2015), $362,942 + $116,068 in benefits
    Benton at Pepperdine (reported in 2014), $505,218 + $214,998 in benefits

  4. Jay’

    I would love for you to do a post on how a young preacher or maybe someone older without much experience who has only been at one congregation or possibly two goes about the art of “negotiating’ with a potential new congregation. Most smaller churches will post what they can pay a preacher when they are actively seeking a new preacher on the internet but the larger the congregation generally speaking the more you see in the preacher wanted ad-“salary negotiable.” Do you have experience with this and could you elaborate?

    I know from my own experience and picking up on what a few friends of mine feel is that the truly humble preacher doesn’t want “money” to seem like an issue when in reality of course it is. Is negotiating with a larger congregation sort of like a poker match and the eldership wants you(the preacher) to lay your cards out on the table first or do most churches say this is what we can start a man with your experience and skill set? If they say this is what we can do and you feel they can do slightly better or that you simply need more to substantiate moving to a new group than what they are offering what is the next step? “I’ll see your 47,000 a year and raise you 5 more thousand? I’m trying to be funny but I’m very serious. Is anything negotiable like more vacation time or gas allowance and of course the housing allowance? In your experience what does “negotiate” really mean and are elderships really being truthful when they say a salary can be “negotiated” or does that just mean what we pay is highly confidential? In other words what is a tactful way for a young or inexperienced(in changing churches) minister’s(without seeming like he’s putting too much emphasis on money) negotiating if that is truly what happens. At what part in the interview should salary and benefits be brought up and who should speak first? Thanks.

    Perhaps there is an article you could point me too if you don’t want to address this yourself.

  5. Monty, information remains the key to being able to negotiate. I know ACU maintains data on preacher salaries, based upon geography, congregation attendance, tenure, and role. I recommend you secure that data, so you have a basis for discussing salary with the leadership at your congregation

  6. Monty, Dan Hotchkiss, a long-time senior consultant for the Alban Institute, now works independently with congregations and other mission-driven groups. He works with mainline denominations mainly and has consulted around governance issues. He has written books and articles which can be found by search engines. Peter Steinke has worked with ACU / ElderLink maybe ??? on similar areas, too.

  7. Ed Dodds,

    I think the American church will be lucky if the only thing they lose is exemption from 990 filings. There’s a move afoot to take away their tax exemptions unless they agree with the Supreme Court on gay marriage, and this could easily happen by fiat from the IRS.

  8. Monty asked,

    I would love for you to do a post on how a young preacher or maybe someone older without much experience who has only been at one congregation or possibly two goes about the art of “negotiating’ with a potential new congregation.

    I’ve been in countless salary negotiations with ministerial candidates. The discussions have ranged from “Just pay me whatever you think is fair” to “I have to have $X to support my family and won’t come for less.”

    Negotiations have also covered vacation time, retirement benefits, health insurance, responsibility for the “match” portion of the self-employment tax, the housing allowance, expected work hours, supervision of other ministers, relationships among the ministers (does the youth minister answer to the pulpit minister, an elder, all elders, a deacon …?), payment for attendance at seminars, allowance for books, office hour expectations, day off in lieu of Sunday, reimbursement for cell phone, mileage, laptop (Always a laptop for some reason), ownership of phone after termination, severance pay, weeks off to preach at meetings, participation in other hirings, annual reviews (timing, how raises and bonuses will be decided), and probably some other issues.

    The older the preacher, the more likely he is to negotiate wages and to want clarity on vacation, etc.

    The late Charles Siburt, a professor at ACU, actually provided a remarkably comprehensive list of issues to be resolved in the hiring process and tips on negotiating. He taught his students to negotiate their wages, recognizing that their first year’s wages would set the standard for many years to come.

    From a negotiating standpoint, it’s to the preacher’s disadvantage to delay negotiations until after the try out weekend. Once he’s told his old church that he might be leaving, he’ll be psychologically “one foot out the door.” I therefore always try to work out wages and benefits before the try out — to be as fair as possible to the minister. Besides, I wouldn’t want the church to fall in love with the guy only to be unable to come to terms on his wages/benefits. So it cuts both ways, but in my experience, the preacher does better to bargain before the try out weekend.

    As others have noted, there are sources for market minister wages, particularly at the ACU website. ACU does an annual survey of hundreds of churches and then sorts by ministerial job (youth, pulpit, involvement, etc.), experience, education, church attendance, church contribution, and state (and probably more). And time off and allowances are reported. In this country, “fair” means market. I don’t know another definition, except “fair” also should be sufficient for a man to raise a family.

    So, yes, “negotiate” means “negotiate.” And for an experienced or well-coached preacher, every term of his employment is part of the discussion. And in fairness and as a matter of integrity, the elders should try to lay out all the terms of the deal so that there are no surprises. For example, does “three weeks of vacation” include time taken for lectureships and seminars? Time taken to preach a meeting? You need to say one way or the other so that there are no hurt feelings or misunderstandings.

    If a preacher is coming from a church that provided a $500 book budget and a $1,500 seminar budget, what happens if the new church expects him to pay those costs out of pocket? He’s been hired for $2,000 less than he expected, plus those costs are likely not deductible (a) except to the extent in excess of 2% of his adjusted gross income, (b) unless he’s not subject to the alternative minimum tax, and (c) to the extent paid out of his housing allowance on a proportional calculation.

    The IRS makes these things complicated. If the church pays under an accountable plan, they are tax free to the preacher. Otherwise, he likely can’t deduct most of the cost — making a failure to request $2,000 in allowances have the effect of reducing his pay by about $3,000.

    Retirement and health insurance have their own complexities.

    There will be elders at the table who take offense at the preacher’s concern with mere money. These will be the more wealthy elders who’ve forgotten what it’s like to raise a family on low wages. I’ve been told by church volunteers that the preacher shouldn’t be concerned about money because he’s committed to a more “spiritual” lifestyle. I find this highly hypocritical because we’re ALL supposed to be spiritual — and I know nothing that requires ministers to care less about money than elders and deacons. And, as I said, it always seems to be the well off guys who take offense at paying the guy per the market.

    I’m a lawyer. Negotiating is what I do. I see no sin in asking for what’s fair and what you need to care for your family. Besides, we reveal our true natures in such negotiations. If a man truly is greedy, it’ll show. If he’s inflexible and unreasonable and demanding, you’ll know before the try out weekend.

    Just so, the elders will be evaluated by how they act in negotiating. If the elders are unreasonable and take a “take it or leave it” attitude, they’ll be no more generous come annual review time.

  9. Jay,

    Thanks for your thorough response. As always, you amaze me with the time you take to answer our questions! Bless you.

  10. I’d be interested to see the megachurch pastors’ salaries. I know Mark Driscoll made somewhere along the lines of $650,000 in total compensation. Steven Furtick lives in a $1.7 million home which would his put his salary in that same ball park. Chris Hodges at the Church of the Highlands has said that he is wealthy because God wants him wealthy in every way. Franklin Graham makes around $1 million a year and Rich Stearns makes nearly the same at World Vision.

    I’m not troubled by helping pastors/preachers a living wage, especially in areas where it takes a high income to own a home. However, Christianity Today has shown that megachurches in the South pay the highest salaries.. The book “Rich Christians in an Age of Hunger: Moving from Affluence to Generosity” has been recommended to address this topic. Any thoughts?

  11. I checked the Form 990’s for Samaritan’s Purse & World Vision. The latest filings are for 2014. According to those, Graham was paid $443,192 (+186,629 benefits). Stearns was paid $447,500 (+73,342 benefits).

    Admitted, those reports are two years old. But also, neither is a “church” and neither man is a pastor, per se.

    But Dustin’s question remains very legitimate

  12. Dustin,

    I think the pay of megachurch pastors is symptomatic of a much larger problem: We are confused as to what the church exists to do. If it’s a worshiping organization designed to produce the most engaging, emotionally riveting assembly possible, then we should pay pastors as the entertainers they are. The market governs.

    However, if the church is an alternative society, unlike the surrounding world, in which we passionately pursue not only community but care for each other, evangelism, benevolence, etc., then the elders of such a church would place a premium on charity and other functions. The assembly would not be ignored but would not be the centerpiece of the church or even in the top five or six institutional priorities. And elders who have a wider range of priorities will find better uses of the money than rewarding a talented speaker.

    But this leads inevitably to more difficult topic. Market forces will in fact require churches to pay top dollar for the very best speakers — unless the speakers have priorities other than wages and see money that they are paid as money taken from more important priorities. But if we start hiring preachers who prioritize the work of the church over their own compensation, they might teach that as a Kingdom principle for the church members to honor. And so the pastor might ask the members to treat their own wealth as a Kingdom asset — which might hurt attendance.

    And so, countless churches conspire with the members and ministers to be silent about the nature of the church and who really owns our personal wealth. Hence, we prefer Paul to Jesus, because Jesus is so very pointed on these topics. He makes us uncomfortable, and no one wants uncomfortable church members.

    But this is not unique to megachurches. It’s true of many much smaller churches — they just aren’t as good at drawing a crowd and gaining donations to support an affluent congregation that wants Jesus-themed coffee shops and sermons that make the week easier but don’t ask too much.

    Smaller churches rarely can afford to pay a preacher more than what I would consider fair pay, and we live in a country in which talented executives are paid absurd sums — because (in theory) they bring home the bacon and should be commensurately rewarded. But I see even in more mainstream churches something just to the edge of the prosperity gospel. We don’t preach that God necessarily rewards donations in this life, but neither do we teach the Kingdom as radically different from the world. Rather, to many of us and our churches, the Kingdom is simply the world saved by Jesus — with no real transformation. And because transformation is not preached, we think in purely capitalistic terms.

    When we debate these things in class, we look for rules to obey and to bind on others — rather than seeking for ways to have our passions changed so that we are driven to seek other things. The reason Paul doesn’t say that the preacher gets X times the congregational average and no more is because it didn’t occur to Paul that we’d ever overpay the preacher at the cost of caring for those among us in need. It was, I’m sure, unthinkable.

    (Thanks for the question. This was helpful to my own thinking — which is evolving.)

  13. The global church is trending 1) southern hemisphere, 2) bivocational ministers, 3) charismatic/pentecostal. Ministers who “tent make” can potentially derive income in web portal offerings, books, newsletters, telementoring (which content can also get them fired). Early reformers/restorers diversity of income lesson…

  14. David you are right about Rich Stearns. However, Franklin Grahams’s salary has been over a million several times as he was getting paid by Samaritan’s Purse and the Billy Graham association. However, the past few years he did not accept the salary from the Billy Graham for a few years but he did re-accept that salary last year.

  15. Prosperity preaching is self sustaining. The members don’t mind their preacher being immensely wealthy and living a luxurious lifestyle because he’s teaching the crowd they can be like him. That’s exactly what they desire to hear. If he(pastor) wasn’t a highroller then either he hasn’t learned the secret yet(novice) and can’t teach the secret to them or he’s simply out of God’s favor. The more wealthy their pastor the greater the teacher or guru. After all if you owned a struggling company who do you want to show you how to turn it around? The guy who is just barely doing better than you or a proven expert whose been there and done that and made gazillions?

  16. Monty wrote,

    Prosperity preaching is self sustaining. The members don’t mind their preacher being immensely wealthy and living a luxurious lifestyle because he’s teaching the crowd they can be like him.

    Exactly.