Thom Rainer: Surprising Insights Regarding Church Budgets and Salaries

collection plateLongtime readers know I am a fan of Thom Rainer’s work on church leadership. He recently posted an article “Six Surprising Insights Regarding Church Budgets and Salaries.”

Here’s his summary:

  1. Growing churches pay their pastors and staff slightly less than declining churches.
  2. Only two percent of the churches’ budgets are funded outside congregational giving.
  3. One third of the churches increased the outsourcing of staff over the past five years.
  4. Overall church staffing costs have declined to 49 percent of the budget.
  5. The attendance-to-staff ratio is 76:1.
  6. About 81 percent of churches limit visibility of specific salaries to a board, a subcommittee, or senior staff.

Let’s think about these for a moment.

  1. Growing churches pay their pastors and staff slightly less than declining churches.

Sorry, but this doesn’t mean you grow by cutting your staff’s pay. Rather, my guess is that growing churches have other budget priorities. They have to pay for meals for the poor, wells being dug, new classrooms, new classroom chairs, new AV equipment, etc. Stable, plateaued churches have all that stuff, likely aren’t as focused on outside ministry, and they figure people are coming to hear the preacher (as opposed to coming to do ministry), and so they put their money on what drives attendance.

But it’s only a slight difference. Ministers will be excited to see a church growing and figure they’ll be rewarded down the road as money is invested in building the congregation. But growing a church is hard, stressful work. Be sure your staff feels appreciated and isn’t distracted by money worries.

2. Only two percent of the churches’ budgets are funded outside congregational giving.

My congregation has a campus ministry — which we’ve had since 1954. We have thousands of alumni all over the country. And every effort made to raise support for the ministry from other churches or from alumni in the last 30 years has been unsuccessful. People give to their own churches. Although Christian colleges can raise millions, campus ministries are nearly all locally supported. I don’t know why, but it’s a fact. (The fact that colleges employ full-time development people whose jobs are to raise money might just be part of the reason.)

Some church plants are, of course, supported by other congregations — but on a budgeted, temporary basis. Some “mission churches,” small congregations in areas where the Churches of Christ are weak, are funded with help from other churches, usually churches that helped plant those churches.

On the other hand, if you take money from others, you also must submit to their rules and requirements, and you just might not like them. There’s much to be said for financial independence.

3. One third of the churches increased the outsourcing of staff over the past five years.

This is evidently a big trend. Churches have likely farmed out payroll services for years, but now they’re hiring graphics artists and even secretarial work from outsource providers. The Internet makes all sorts of efficiencies available.

Tips for Outsourcing Creative Work

In an earlier post, Rainer writes,

I’ve mentioned on a number of occasions that churches try to do too many functions beyond their core internally. I’ve also noted that many churches could be much more efficient if they outsourced bookkeeping and finance (the example I have given is MAG Bookkeeping); website development (Mere Church); website maintenance and strategy (Render); writing (Ellipsis); and assistant/secretarial (eaHELP). Churches are likely wasting millions of dollars collectively in America.

This is way outside of my own experience, but my children are familiar with and use these sorts of sources. For example, I don’t know why an outsourced bookkeeping service over the Internet would be better or cheaper than hiring a bookkeeping service in town, especially given the unique needs of churches. But maybe a service that specializes in churches could be advantageous.

Just so, not all secretarial work outsources well, although typing dictation (does anyone do that anymore, other than doctors?) is certainly one possibility. But filing? Composing the church bulletin? I mean, some tasks would seem to require knowledge of the church and its members.

I’d be interested in the readers’ thoughts.

4. Overall church staffing costs have declined to 49 percent of the budget.

Interesting number. Megachurches often have a lower percentage due to economies of scale. But I’m not sure that this is a good trend. I mean, either people are giving more per family (they’re not in most places) or else the church has smaller staff. Well, if they’ve learned to better delegate and to train their members, that’s good. But it may also mean that they’re not investing in staff needed to grow the church. We may see a trend toward being more cautious as growth becomes less certain and more difficult.

5. The attendance-to-staff ratio is 76:1

This is, to me, astonishing. It used to be said that you needed 1:100 to 1:150 of anticipated size — that is, you should staff for the church you plan to soon become. So a church of 400 planning to grow to 500 would need a staff of 4 or 5 people, depending on strategy and organizational structure.

At 76:1, that church of 400 has 6 staff members. The difference isn’t great, but it multiplies by the many thousands. And, to me, it means that we’re more and more inclined to hire our ministry done by others. That is, volunteerism is on the decline, and that’s a serious problem. We can outsource our bookkeeping, but not our Christian walk. I mean, church isn’t a charity we support. It’s a lifestyle we choose. It’s a change in citizenship, worldview, culture, everything. And it involves being involved.

Any how on earth is staff pay declining as a percentage of budget while staff sizes are growing? That can’t be, so maybe staff sizes aren’t growing at all. Maybe we’ve been overstaffed for many years. Or maybe the 1:100 to 1:150 ratios in the church growth books are way out of date or assume stronger training and involvement.

What ratios are the readers seeing?

6. About 81 percent of churches limit visibility of specific salaries to a board, a subcommittee, or senior staff.

I’m a retired elder. Our church is in the midst of a preacher search (I have no involvement — send no resumes). I have zero interest in knowing what they pay the guy they hire. I worry about all sorts of things at church, but the preacher’s pay is about 1,000 on my list — unless it’s too low. The Torah says to pay the people who work for you and that the workman is worthy of his hire. Underpaying a preacher (or anyone else) is not good business; it’s a sin. I’ll have no part in it.

I know many disagree with me, but think about it. List the 5 most important priorities your elders ought to have. I’m sure the readers would differ greatly, but I doubt that anyone would list “Making sure we don’t pay the preacher too much.” I mean, the biggest complaint I hear about elders is they treat the church too much like a business. Well … who in business overpays for executive services — other than Fortune 500 companies?

I think members obsess over salaries because (a) it’s something they know something about (although they likely know nothing about what preachers and spiritual formation ministers get paid across the country, i.e., the market) and (b) they don’t think the preacher works very hard — which is sometimes true but usually false. The people who know are the ones who volunteer during the workday and are at the building throughout the week. They know. The rest of us are just guessing. And you really can’t evaluate his pay unless you know — for a fact — how hard he works as well as the going rate for such things.

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About Jay F Guin

My name is Jay Guin, and I’m a retired elder. I wrote The Holy Spirit and Revolutionary Grace about 18 years ago. I’ve spoken at the Pepperdine, Lipscomb, ACU, Harding, and Tulsa lectureships and at ElderLink. My wife’s name is Denise, and I have four sons, Chris, Jonathan, Tyler, and Philip. I have two grandchildren. And I practice law.
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