The new research on church staff salaries and budgets is amazing.
I have been poring over the data of the study recently released by Leadership Network and Vanderbloemen Search Group. It is rich with helpful information.
As I read the study, I looked for surprises or changes in patterns from what I have been seeing in recent years. And though the data I’ve collected in the past may not compare perfectly with the research of this latest study, the contrasts are, at the very least, instructional and interesting.
Here are six of those surprises or changes:
- Growing churches pay their pastors and staff slightly less than declining churches. At first glance, this information seems surprising. But growing churches often reach new Christians who have not established healthy giving patterns. Other growing churches may be more likely to reach younger families with lower incomes.
- Only two percent of the churches’ budgets are funded outside congregational giving. Some churches receive funds from leasing facilities, from schools that are in the church’s building, or from investments and endowments. But, in reality, those sources of income are very small compared to congregational giving.
- One third of the churches increased the outsourcing of staff over the past five years. As I have noted in other articles, outsourcing is a major trend in churches. Leaders are increasingly becoming aware that many typical employee functions are not part of the core that makes a church unique. Here are some of the more common church staff outsourcing I have found with an example of each (affiliate links included):
- Administrative assistants/secretaries (EAHelp)
- Bookkeepers/financial assistants (MAG Bookkeeping)
- Web support/webmasters (Render)
- Ongoing writing and publications (Ellipsis)
- Overall church staffing costs have declined to 49 percent of the budget. To be clear, the number of 49% comes from the Leadership Network/Vanderbloemen Search Group research. I am comparing that to my own earlier data that shows church staffing costs to be 54% of budget. It would appear that overall church staffing costs are declining. I would surmise that much of that decline is coming from efficiencies gained from outsourcing.
- The attendance-to-staff ratio is 76:1. For every 76 persons in average worship attendance, churches have the equivalent of one full-time staff person. Those numbers count all staff, including pastors, assistants, custodians, and others. It does not include school staff if the church has or sponsors a school.
- About 81 percent of churches limit visibility of specific salaries to a board, a subcommittee, or senior staff. This perspective seems to be a major shift from the days of all church members pouring over every dollar given to every staff person for salaries, benefits, and expense reimbursements.
How does this latest research compare to your church or to trends you are seeing in other congregations? Let me hear from you.
Posted on November 7, 2016
With nearly 40 years of ministry experience, Thom Rainer has spent a lifetime committed to the growth and health of local churches across North America.
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52 Comments
Adam Will – Thom is right, you need an advocate in the church. Several years ago, a church member made a negative comment about my salary. An elder said to him, “the grocery store charges him just the same as they do you and me for a box of Cheerios.”
That ended that, and I got my raise. Praise the Lord for an advocate, one to plead my case for me.
Do you think number 6 is a good shift or bad?
Brandon,
That is an excellent question. I would like to know Thom’s thoughts along with any of the pastors’ here.
My church has increased in numbers in seven years that I have been pastor, but raises for staff has not increased. I have had one raise less than $1000 and less that a thousand in retire benefits. The same for other staff members. The problem is that before I came some of the former staff took advantage of the church, so now the church takes it out on the present staff. No complaints because God has always provided.
Thom, I’m a Finance and Operations Director for a church of 1,600 and I am always trying to find benchmarks for budgeting. The single largest expense in churches our size is for staffing and so your findings which indicate that staffing is coming in at 49% of budget is very interesting to me. As I’ve researched this benchmark over the years I’ve found the variance to be so sizable that it led me to ask my peers in church finance to detail what they include in the budget and the staffing numbers they are comparing. My conclusion is that everyone is doing it differently. For instance, one church includes Missions in their General Fund budget and another church does not. Some churches exclude operations staff and operations costs from their comparisons choosing to compare ministry related staff and expenses only. Others include all capital expenditure budgets while others do not. Benevolence budgets are excluded in most of the churches I’ve talked to but there are a few that include these costs. I could go on. What would be helpful is for someone with your resources to set a standard by which we could truly compare and benchmark against other churches. Until then, we really don’t know if 49% or 54%, or some other number, is something we should be tracking against. The only thing that I’ve been able to give my Finance Team and my board that has satisfied them is a factor specific calculation that compares next year’s budget to staff ratio to a ten year history in our own church. That said, a nationwide apples to apples comparison would be much more helpful. Just something to think about for next years VB survey perhaps.
Thanks for all you do.
Kurt –
Thanks. I am working with my son, Art Rainer, to do just that.
I agree with Kurt and am glad to hear you’re looking into this. Thanks Thom and Art!
Any progress on Kurt’s question and Art Rainer’s work?!? I’m wondering along similar lines. What is included in “staff expenses”? Would that include social security reimbursements? If a church pays half of S.S. bill, could that be considered an operational expense since most employers pay half of social security? What about worker’s comp? As for non-clergy, would payroll taxes be staff expenses or operating expenses?
I think it would be helpful to have general guidance on what are considered staff expenses, and what should be considered operations.
Thank you for your invaluable insights that help the church at large!
This is an area that I have been researching for decades. I do understand that churches vary on how they categorize specific items for budgeting. As far as being consistent, I would note the following:
1. Personnel expenses should include all salaries, benefits and expenses that relate to that position including FICA, housing, retirement, medical and expense/conference accounts.
2. The premise for this is that if that position was not filled or occupied, would that expense or benefit be used or spent. If not, then it is a personnel expense. If those funds would be expended even if not connected to a paid position (volunteer), then it would not be considered a personnel cost but as a ministry expense. For example, say you have an expense/conference account related to ministry areas (music, students, children, etc) for a staff person to use. The understanding from the church is that only the staff person would be using those funds. This should be included as a personnel expense. If those funds were available to any volunteer or person associated with that ministry, then it should be excluded from personnel costs because it would be a true ministry expense.
3. The underlying principle in whatever measure or percentage that relates to personnel costs is to identify what it costs for the church to have a paid position, whether salaried or hourly. This certainly should include salary and benefits. In the above post, SS (or FICA) costs would be personnel, not operational expense, because if the personnel position was not filled, you would not have that expense.
4. As far as the ~50% number, I have found this to be a good number. If a church or organization is debt free, then 54-55% is within reason. Above that consistently almost always creates a problem in the long term by choking off needed resources for the church to do the things that it should do as a church (ministry and missions).
5. A more prominent measure to determine a valid relationship between personnel costs and budget (or income from offerings) would be personnel effectiveness in leading the church to fulfill its mission. Any person who is consistently not meeting the needs of the church is seriously hampering and causing harm to that organization. In that case, 100% of that cost is regrettable.
6. I also believe that a better measure for personnel costs would be to church income than budget, especially if the income is significantly less than the actual budget (over 5%).
I wonder if observation #1 may also be due not only to growing churches including new tithers but also to a potential attitude among congregations that pay their pastors higher. Isn’t there a link between “we pay him to do that” and decline? Conversely, when a pastor is paid less, there is emotional room for him to teach group effort. And group efforts lead to growth. Similar to what Matt M. commented above about his largely volunteer team.
It seems my church is breaking the mold. I pastor a church that averages only 20-25 faithful members/attendees. Yet I am full-time with a small compensation, but they do recognize it is not sufficient and want to increase as we grow. I just praise God daily that He is still faithful and provides for His church and my family.
Thom, do you have any data surrounding churches comprised entirely of volunteers (i.e. no paid staff)?
Nope. Sorry.
Spot on.
Growing churches also heavily utilize teams and “volunteers.” At my old church <100, we paid everyone who did anything for church. 84% of our budget was salaries. We couldn't "do ministry" and church declined, now to 20 individuals.
My current church has grown from 100-600 in five years, and 30-35% of income goes to salary. Only a few people are paid and most administration or facility work is all team/volunteer based (cleaning, maintenance, etc.) It allows a large portion to go to missions and in the community to have creative ministry take place.
Ironically, I also make just as much as a staff pastor at my church of 600 then I did at my church of <100. I don't mind at all because the mission is main focus and the fact we're able to reach more people with more financial resources.
Thank you for this insight. I posted a concern on an earlier topic but this more fits the bill. I love our church but we are declining and have cut mission giving to one percent. Our salary and benefits for a full time preacher and P-T music/ accompanist and custodian take up over 70 percent of our budget. I believe in taking care of people but we also don’t have programs going to reach within local congregation…..so basically we are a congregation paying for bills and salaries….Thoughts?
All your facts and figures are spot-on with how our church is. Good insight.
Thanks, Mike.
I pastor a growing Church and make very little compared to other local pastors and even my denomination’s standard. How do pastors advocate for fair compensation without seeming greedy or self serving?
Adam –
Get an advocate in the church who will address these issues on your behalf.
sit the Deacons down and explain the problem with them. Never is a man more free to minister than when his bills are paid.
I’d also advise that you have your denominational compensation standards with you to give to your key leaders. Since I’m Southern Baptist, I don’t have denominational standards, but we do have a compensation survey that shows what comparable churches pay their staff. Your denominational resources will show your key leaders that you’re making a reasonable request.
I called Lifeway a few years ago with compensation questions. The data from the annual survey was lacking for my area. They recommended a senior pastor with an MDiv should be making something comparable to the local high school principal. That might be information worth having.
my new church seems to be the total opposite in that it gets most of its money from rental income. It is so hard to wean them off.
One of the glaring problems with employing people is the cost of employing (hiring) someone. The federal and state and sometimes local government demand tribute that increases the cost of employing someone. That needs to be should be addressed. The business of God needs people in their ranks to further the business of God here on this earth.
“Pouring over.” Really?
Yes. Really.
Shold be “poring over”
Both of you are correct. Correction made. I stand in abject humiliation.
I want to see a picture of you in sackcloth and ashes before I’ll believe your repentance is real.
P.S. Yes, I’m kidding!
Should be should !
Yes , but should be, “should “.????
I agree with the sentiment, but it should actually be “poring over.”
Dr. Rainer – I’m sensing that my poor attempt at humor may missed the mark. I apologize if it seemed otherwise. I appreciate your insightful articles.
Not at all, Phil. My grammar needed correction.
…have missed
lol “auto-corrected” yourself…