Where in the World are the Warrens?

By Cindy Warren

A family steps off an airplane and is greeted by the Bowers family (Keith, Carrie, Jason, and Lucas), General Baptist Bible College president Joyce Porcadilla, and many other sweet, welcoming faces.  Who are these new arrivals?  Aren’t they General Baptist missionaries to the tropical island of Saipan?  Not anymore?  The Warren’s mission trip has turned into two destinations instead of one.

The Philippine countryside

The Philippine countryside

My husband Phil and I are now living in Davao City, Philippines, along with our two youngest sons, Oliver and Harley.  There are a few things we have to to adjust to here.  The money system is different than on Saipan, and the language is sometimes a barrier.  I exchanged my first US currency for Philippine pisos at the information desk at the mall!  Other major differences are the congested traffic, the many open air markets, and the fact that some of the mall include grocery stores.

Our two youngest sons are now attending a Christian school with the Bowers’ sons just four blocks from our home called Faith Academy International.  They have a great school and they enjoy being close enough to walk over to shoot hoops and play on the new soccer field with the other students.

We have been trying to build relationships with our pastors here in the Philippines.  So far we have visited the Matigsalug Bible Institute and the General Baptist Bible College and met with the staff, have attended a baby dedication, attended a Sunday morning service at First General Baptist of Davao City, and attended both the Pastor’s Conference and the 360 Conference.

The Warrens are now serving General Baptist work in the Philippine islands.  We pray that they will adjust seamlessly to this new assignment, and facilitate General Baptist work there in a way that allows us to do together what cannot be done alone.  

Making it on a Pastor’s Pay: 4 Reasons Salaries are Low

By Franklin Dumond

Honest discussion of the salary and benefit needs of a pastor should not be uncomfortable. The Scripture is very direct: pastors are expected to work hard; churches are expected to offer fair compensation.

congregation in pewsThe pastor’s salary should be reviewed on an annual basis. The finance committee should review the entire salary package as each annual budget is prepared. Years of experience, educational level, and cost of living adjustments should all be part of the discussion. Support staff such as secretaries and custodians should also have salary packages reviewed annually, but they should be evaluated and paid in comparison to their skills and positions, not in comparison to the pastor or staff ministers.

Church paid salaries have historically been lower than the average salary amount in most communities. Too often the old adage “Lord you keep him humble; we’ll keep him poor!” has been an actual fact. The scandal generated by a few notorious preachers has sometimes reinforced the tendency toward lower salaries.

A few reasons for lower church salaries are:

  1. Unbiblical priorities. The New Testament is very clear that pastors are to be respected, treated with dignity, and paid fairly. The Apostle Paul instructs, “Let him that is taught in the Word communicate unto him that teacheth in all good things. Be not deceived; God is not mocked: for whatsoever a man soweth, that shall he also reap.” Galatians 6:6-7
  1. Unrealistic expectations. While all believers are expected to trust God, and not man, members may expect their pastor to live on less as an example to the flock, while the flock continues to live on more despite the noble example of the underpaid pastor.
  1. Untrained lay leaders. Many lay leaders who serve on finance and budget committees simply have never been trained to develop a pastoral compensation plan. For example, the specialized tax status of pastors is often a mystery to lay leaders. Even self-employed businessmen do not always understand the special dual status of the pastor, who is considered an employee for income tax purposes but self-employed for Social Security purposes.
  1. Unfair models. The salary model churches often use is based on the net, or take-home, pay of the average church member. While this can be a fair approach to compensation, it generally does not take into consideration that the gross salary of the average worker is substantially greater than the net pay. Most workers benefit from having an employer who provides health insurance, job training, and retirement benefits, in addition to the matching share of Social Security paid by the employer. Yet all too often the total package for a pastor is based on the take-home (net) pay of an average worker, not on the total package paid directly and indirectly to that worker by their employer.

Personnel committees, finance committees, and pastor-search committees do well to avoid two perilous pitfalls in planning for pastoral compensation. First, it is never appropriate to use an average of church member’s income to determine the pastor’s salary unless an honest study is done of the actual income of the members. Best guesses about average income will always understate the income levels. Census data on average household income in any census tract will provide surprising insights into actual household income within the congregation.

Second, it is important to consider the long term implications of a parsonage to the pastor who is more than 30 years of age. Home ownership in our society is a keystone to retirement. The general practice of a 30 year mortgage means that if a pastor does not purchase his own home by his early 30’s he will not have it paid for by the usual retirement age. While the parsonage is convenient for the church and may be necessary for the pastor due to lack of housing, it should be used sparingly in the long term pastorate. Churches sometimes rent their parsonage to provide housing allowance for the pastor. To encourage a long term pastorate some churches provide a down payment in the form of a loan or grant to the pastor which is forgiven over a period of a few years. Other churches use the parsonage for second or third staff members as the church grows and develops.

Every salary package should address three broad areas: base salary, fringe benefits, and professional expenses.

This article is the final installment of a six part series by Dr. Franklin Dumond, Director of Congregational Ministries, on understanding and planning for a pastor’s salary.  To learn more about the process and intricacies of paying your pastor, catch up on part 1, part 2, part 3, part 4, and part 5.

Making it on a Pastor’s Pay: 5 Dangers of a Reimbursable Plan

A reimbursable plan for the pastor’s salary package can seem like a good idea because it is simple to compute, but can be dangerous in actual practice.

dollarsIn a reimbursable plan, the available salary for the pastor’s family is used in part to pay for the costs of ministry first, leaving the remainder for the take home salary.  In the not too distant pass this strategy was used to reduce the pastor’s tax burden.  The dangers of this approach are five-fold if the plan is not computed from the proper starting point.

A reimbursable plan would state, “We are providing a salary package of $50,000.”  What that statement does not identify is that from this plan the pastor will be reimbursed for items like health insurance, travel, continuing education, and phone that would normally be considered costs to the employer.  Thus a $50,000 package may actually result in only $20,000 to $25,000 in actual take-home pay.

There are five dangers of these kinds of reimbursable plans.

  1. Costs are unfairly shifted from the employer to the employee.  In the United States employers are required to match Social Security contributions. Shouldn’t the church at least do the same?  Health insurance, despite the complications imposed by the federal government, is tied to employment in our country.  Shouldn’t the church do the same?
  2. Unrealistic assumptions are at work.  One motivation for these kinds of reimbursable plans is the drive to reduce taxes that are owed.  While everyone should take every legal tax break possible, the net result of these plans is that taxes are reduced because income is reduced.  For many years I listened to my mother-in-law complain about paying extra income taxes every year.  I offered to let her have my reduced tax burden if she would give me her level of income.  She never made that trade!
  3. Unbiblical standards are being used.  The Bible calls for fairness and generosity for those who labor hard to teach and preach.  Enough said.
  4. Unskilled bookkeepers don’t deal well with the IRS.  Financial reports and W-2s for this type of system must be carefully maintained.  It does little good to have gone through the pain of careful reimbursement if the financial report or the quarterly 941 misstates what was done.  The complications of this system lead to mistakes by both the church and the pastor.
  5. These plans are unfocused on the future.  The reimbursable plan deals only with the moment.  Reduced taxable income is reduced available income.  Reduced taxable income is reduced retirement benefits.  A plan that provides easy solutions for the church treasure today may not provide the management systems necessary to maintain credibility in the 21st century.

The advice from Scripture regarding compensation for pastors and staff ministers has not always been taken seriously.  Congregations and their leaders often want to be fair, or even generous, but information about what is being done in other churches, along with guidelines and suggestions for implementation, have not been readily available.  On the other hand, the very nature of ministry often finds pastors hesitant to ask for adequate salaries.  Indeed, many pastors would find a means to do ministry even without a salary.

This article is part 5 (read part 1, part 2, part 3, or part 4) of a six part series by Dr. Franklin Dumond, Director of Congregational Ministries, on understanding and planning for a pastor’s salary.  Check back over the next few weeks (or subscribe using the box to the right) to learn more about the process and intricacies of paying your pastor.