THE PASTOR'S SALARY: A Leadership Survey

In 1825, about the time Abraham Lincoln was splitting rails, 18-year-old frontier preacher Elijah Goodwin wrote, “I did not think it was right to preach for money; still, I thought a little money was very convenient when it came to paying ferriage at the rivers. In traveling and holding protracted meetings with others, I learned that preachers who said the most against paying preachers received the most money for their labors. Perhaps this was because, in preaching this way, the attention of the brethren was directed to the subject. I never took any part in this kind of preaching, and therefore got but little money.”

Once, when Goodwin was to travel several days from extreme southern Indiana to northwestern Illinois to preach at a camp meeting, someone asked him how much money he had for the trip. “I told him that I had just twenty-five cents,” Goodwin replied. “To this sum he added another quarter. … About dark [on the first day] I stopped at a public house and got my horse fed, but did not take supper myself, lest I should exhaust my little treasury and not be able to buy food for my horse. After my horse had eaten, I mounted and went on my way, traveling all night. … At noon I halted to feed my horse (not myself). This exhausted my funds. I rode all the way, eating nothing but grapes and hazelnuts. … The next day I reached my destination about 2 P.M., having eaten but two meals in three days.”

So it was for many preachers a century and a half ago, and some of those memories linger. A salary of a bag of corn and a couple of chickens left on the back porch is well within many pastors’ memories. But what is the state of pastoral compensation today?

Almost eight years ago, LEADERSHIP surveyed its readers. The results were published in “Clergy Compensation: A Survey of LEADERSHIP Readers” in the spring 1981 LEADERSHIP Journal. The news: mostly good. Pastors were, for the most part, not muzzled on the threshing floor.

But that was seven years ago. What’s happened since? Our 1988 LEADERSHIP clergy compensation survey has some answers.

Where Pastors Stand

In the following analysis, we’ll often compare the 1988 findings with those from 1981. To streamline the reporting, the numbers and percentages given in brackets [ ] will refer to the 1981 figures.

Compensation. Now for the news you’ve all been waiting for: compensation is up. Nationwide, the average pastor’s salary/housing payment (the financial equivalent of a lay person’s cash salary) is $28,775 [20,969]. Attach a benefits package averaging $4,320 [$2,303], and salary plus benefits equals $33,095 [$23,263]. This figure includes cash salary, housing allowance (or average value of receiving a parsonage), utilities allowance, insurance premiums, pension contributions, and Self-employment Tax (Social Security) allowance.

Reimbursements for expenses add another $2,404 [$2,167] to the package pastors receive. These professional expense repayments include transportation, continuing education, book, and other allowances.

The bottom-line church expense for paying and reimbursing a pastor averages $35,499 [$25,430], up 39.6 percent from 1981. Table 1 breaks down the various payment categories for three kinds of pastors: those in a parsonage, those receiving a housing allowance, and those with neither a parsonage nor a housing allowance.

Table 2 lists the average amount of each compensation item for the group that receives such compensation. Not every pastor receives pension payments, for instance, but among those who do, the average pension payment is $2,252 annually.

Comparisons. Compared to 1981, salary/housing payments are up 37.2 percent. Since the Cost of Living Index has risen 33.7 percent from 1981, pastoral salaries have gained about 3.5 percentage points.

The benefits package has improved more substantially, climbing 88 percent. A greater percentage of pastors are receiving each of the benefits since 1981. Today 35 percent [26 percent] receive Self-employment Tax benefits, and those getting the benefit average 27 percent more. Because of the rapidly escalating tax rate (1981 rate was 4.3 percent; 1988 rate is 13.02 percent), perhaps some churches are stepping in to soften the shock.

Three-quarters of the respondents receive health and/or life insurance coverage with paid premiums averaging $2,339 [$1,145], which reflect the spiraling cost of medical care. Pension contributions are received by 69 percent [64 percent] of pastors, who average $2,252 [$1,670], 8.7 percent of their salary/housing package.

The salary/housing and benefits package has risen 42.3 percent from 1981. If you subtract the 3.7 percentage points that higher Self-employment Tax has taken off the top and the 33.7 percent rise in the cost of living, pastors have a real gain of 4.9 percent in salary and benefits.

The category of professional reimbursements is up 11 percent since our first survey. Transportation expenses are now reimbursed for 75 percent of pastors [79 percent] at an annual average of $2,104, up only $62 from 1981. Half the pastors now receive continuing education support that averages $479, compared to two-fifths receiving an average of $375 in 1981. A book allowance is enjoyed by only 27 percent [42 percent], and the amount averages $219, down $161. As these reimbursements shrink or fail to keep up with actual costs, pastors pay for more of their professional expenses out of family coffers.

A catch-all salary category, “other,” contains the evidence of miscellaneous but substantial reimbursements received by 15 percent of our respondents. The average amount was $1,585 [$575].

Other income. About a third of the pastors supplement their income through ministerial activities such as weddings, guest sermons, speaking engagements, and funerals. These activities add an additional $2,603 on the average. Of the lay persons surveyed, about three-quarters feel pastors should be free to accept such paid assignments.

A far smaller number of pastors, 11 percent, supplement ministry income with nonministry enterprises and earn an additional $7,909. They aren’t getting rich, however. The ministry income of these pastors is about 30 percent below average, so what they make outside just about brings them in line with the average clergy income.

According to USA Today, the current median household income in the United States is $29,458. The median household income (including all sources of income) for our clergy respondents’ families is $33,414.

As a 33-year-old family man preaching thirty-five sermons a month on an eighteen-point, three-state circuit, Elijah Goodwin wrote about the “pitch-in plan” for support: “My family expenses from January 1, 1840, to October first amounted to $409.13; and my traveling expenses to $25.19, making, in all, $434.32. While the whole amount of contributions received was only $59.68, which fell short of my expenses $374.64, which may be regarded as my contribution to the cause of Christ during the ten months past. So much for the ‘pitch-in no-plan’ arrangement. … “

Pastoral income today is at least in the ballpark with the rest of contemporary society. Elijah Goodwin didn’t even make it into the bleachers.

What Affects Compensation

Several factors appear to help determine compensation levels. Let’s look at five (the following figures are totals of salary/housing and benefits):

Church size. As might be expected, the average number of worship attenders greatly affects the payment package. Churches with fewer than fifty on Sunday pay their pastors $18,745, 43 percent below average. Not until attendance reaches more than a hundred do churches pay what’s average. Churches with five hundred or more in attendance pay $41,460, which is more than twice what pastors of the smallest churches receive.

Position. Heads of staff lead the pack. They average $39,417, 19 percent above the average. Pastoral staff members earn $29,329, about 11 percent less than the average. Solo pastors are paid $28,855.

Among those surveyed, pay for heads of staff ranged mostly from $15,000 to $55,000, but several earned in excess of $65,000, and one over $90,000.

Staff pastors earned as much as $68,000, but few were paid over $50,000, and a few as little as $5,000.

Few solo pastors earned over $40,000, but a couple earned between $50,000 and $65,000. Compared to the other groups, solo pastors were found in more abundance in the $10,000 to $20,000 range.

Community. Urban pastors (with probably the highest cost of living) are best paid, averaging $35,845, which is 8 percent above the average. But their suburban colleagues, paid $35,634, are close. Small-town and rural pastors, making $31,070 and $26,776 respectively, receive below-average pay. Housing appears to be a factor. Only one-fourth of urban pastors live in a parsonage, compared to one-third of suburban, one-half of small-town, and two thirds of rural pastors.

Years in ministry. Pastors can generally expect their income to rise for the first twenty-five years in ministry and then tail off slowly. Those with twenty-one to twenty-five years’ experience earn the most: $40,477 (22 percent above average). Those with one to five years in ministry get an average of $23,840 (28 percent below average). Veterans with twenty-six or more years characteristically outearn those with fewer than twenty.

Housing. We found 46 percent receive a housing allowance; 42 percent are given a parsonage to live in. (The rest, for some reason, didn’t designate any of their pay package as housing allowance, thus increasing their income tax liability.)

Homeowners and nonhomeowners make roughly equivalent wages. By using an arbitrary parsonage value of $9000 a year (see accompanying story, “The Figures Behind the Survey”), the salary/housing package for parsonage dwellers is a few hundred dollars greater than the package of homeowners. However, homeowners can deduct interest expenses from income and reap tax benefits unavailable to those in parsonages. Also, homeowners most often benefit from real estate appreciation that adds to their net worth.

How Pastors Feel

At age twenty, Elijah Goodwin was called to preach a circuit that took him six hundred miles every eight weeks. “I was promised no salary,” he wrote, “only the brethren said that I should not want.” When his horse gave out on the first round, he was advanced $20 to buy another. “I, according to my promise, paid over all I had every time I came round,” Goodwin recalled, “but was never able to lift the note till my last round, which left me without a dollar in my pocket!”

The situation of pastors today, as we have seen, is somewhat different, but how do they feel about their level of compensation?

The good news: Two-thirds of pastors are satisfied with their present level of compensation, and another 15 percent are neutral. In fact, 30 percent consider themselves “very satisfied,” and only 2 percent are “very dissatisfied.”

The spirit of a hireling did not appear among survey respondents. A Lutheran pastor from Wisconsin voiced a common sentiment: “Financial gifts aren’t that important to me. What affects my ministry more is the constant loving, caring attitudes expressed by my members in response to the proclamation of the gospel.”

A pastor of a small Christian and Missionary Alliance church in Oregon wrote, “I’m not in the ministry to get rich. I find it a privilege to serve and feel fortunate that I’m compensated for doing something I enjoy so much.”

And a Baptist commented, “I never depend on the church for funds. I will pay the people to let me share the gospel with them.”

The not-so-good news: About one in five (19 percent), however, expressed a degree of current compensation dissatisfaction. Several realities factor into this feeling:

1. Compensation level. It’s no surprise that dissatisfaction grows as salary level drops. The “very satisfied” enjoy compensation 20 percent above average. The “somewhat satisfied” are close to average. Interestingly, the “neutral” pastors are about 17 percent below average in compensation. Their quiescence is commendable. Those registering dissatisfaction average 19 percent below the norm.

2. Cost of living. The sense of falling behind the cost of living also provides irritation. As pastors sense inflation eating at their pay, dissatisfaction follows. Of those registering dissatisfaction with their compensation, a full 86 percent feel they’re losing ground to the cost of living, compared to 21 percent for the very satisfied.

“Since 1983 I’ve had no pay increase,” wrote a Baptist pastor from a small church, “yet Social Security rose from 9.35 to over 13 percent in that time, and utility costs increased. Am I missing a message?”

3. Exploitation. When asked, “Do you feel you are now, or ever have been, deprived, mistreated, or exploited by a ministry situation?”-a wide-open question-57 percent answered no.

Of those who answered yes, only 21 percent think they’re currently exploited, which computes to fewer than one in ten currently mistreated. Half the ones who have felt abused said the problem occurred in their first pastorate.

What are these situations of discord? Here’s a sample:

“The leaders wanted to keep me humble. The salary was the last item on the budget, and if a raise was to be given, it would be ‘taken’ from one of the church ministries” (Baptist, Tennessee).

“I was disappointed in the fact they were treating me as an operating expense. That attitude finally caused me to move” (Southern Baptist, Virginia).

“It’s ‘all in fun’ when the elder jokes about how much I make, or is it? There’s no joking about how much he makes” (Church of Christ, Kansas).

“Instead of a raise, I was offered a $1,000 bonus if I could raise worship attendance and giving levels a certain percentage over a given time. That taints with suspicion every act a pastor does. After I got them to rescind the bonus offer, it was suggested that if we didn’t meet the goals, I could have the amount withheld from my salary” (Lutheran, Kansas).

4. The future. Several pastors, especially those in parsonages, registered concern about their financial futures. Pastors owning their own homes have built up an average of $36,500 [$34,720] of equity, and their homes have an average market value of $93,865 [$73,750]. (The increase in market value coupled with a small increase in equity indicates greater mortgage indebtedness for pastors in 1988.)

Pastors in parsonages eye this nest egg with a tinge of envy. Said a Methodist from Ohio wistfully, “I wish I were getting started on a home for retirement.”

5. Secular peer comparisons. When asked to place themselves on a ten-point scale in relation to the compensation received by similarly educated and experienced professionals in their community, pastors ranked themselves 3.9, somewhat lower. When asked the same questions about their pastors, however, lay persons placed their pastors at 5.5, indicating they think pastors do slightly better than their professional peers.

How a pastor’s salary compares with secular peers:

Much worse Much better

1 2 *3 4 5 * 6 7 8 9 10

Pastors Lay Leaders

Obviously, pastors and lay people see this situation from different perspectives. But pastors also differ among themselves: “I don’t expect to be paid equal to doctors and lawyers” was the explanation of a North Dakota Lutheran.

“This is UAW country,” volunteered a Michigan pastor feeling the inequity. “Even blue-collar types can earn $50,000 per year.”

6. Congregational comparisons. Perhaps the most difficult comparison is with the perceived average prosperity of fellow church members. On another ten-point scale comparing pastoral compensation with average household income in the congregation, pastors listed themselves at 4.9, or almost average. Lay respondents perceived pastors as better off-5.9. Who’s right? It’s hard to tell.

How the pastor’s income compares with the congregational average:

Much worse Much better

1 2 3 4 *5 *6 7 8 9 10

Pastors Lay Leaders

It’s commonly felt by pastors that lay persons often look at the bottom-line cost of having a pastor (salary/housing, benefits, and reimbursements) and compare that with their own take-home pay: Hmmm. He makes $32,000 a year. My pay’s only-let’s see, twelve times $2000-$24,000 a year. Why, he makes a bundle! Of course, such calculations forget to add benefits and withheld taxes to the parishioner’s take-home, and to subtract reimbursements from the pastor’s package. A Baptist pastor in Massachusetts wishes his church would “separate salary from retirement and professional expenses. People see the package amount and think it’s adequate, when that’s far from the truth.”

Whatever the reality, pastors feel the comparison and dislike the perceived discrepancy. Some sample comments:

“No one else in our church with as much required of him has so little to show for his efforts” (Presbyterian, Pennsylvania).

“We need more open discussion on the financial needs of living in a high-income community” (Methodist, California).

And then there’s the sometimes-embarrassing public aspect of the pastor’s salary: everybody knows, and has an opinion on, what the pastor makes. The pastor of a Reformed church in Michigan offered this remedy: “We should publish the salaries of all the members at budget time.”

Said a Lutheran in California about the process of setting the pastor’s compensation, “I’d like less of a public spectacle.”

7. Inability to change. Here’s a place where clergy and laity differ. A solid majority (60 percent) of clergy with subpar salaries consider it unrealistic to expect to change the situation. Yet 57 percent of the laity who rated their pastor’s salary below average among fellow professionals or the congregation feel it can be remedied.

The laity are matter-of-fact with solutions:

“Someone other than the pastor needs to research the comparable data and present it to the decision-making groups” (Mennonite, Oregon).

“We could share with the congregation the median income of the families compared to the pastor’s income” (Nazarene, Illinois).

Pastors are more mixed:

“Someone told me that people like to look up to pastors morally, through them politically, and down on them financially. This seems to be generally true of the older generation on my board,” quipped a Presbyterian in New York.

“How can we vacuum more money from the pockets of our inactive members?” asked a Methodist from Illinois.

From a small church in Oregon came the prediction: “Until our congregation grows, we will be unable to increase my salary.”

The slight sense of inability to change in 1988 differs from the 1981 findings. In that survey, 55 percent of the clergy and an even stronger majority of the laity thought it possible to remedy low compensation. Now they’re less sure.

Back to good news:

Pastors don’t feel overly restricted by their income. Nearly three-quarters of pastors don’t consider their children’s educational opportunities severely restricted. Only 32 percent think their vacation options have been limited, 28 percent their car choices, and 22 percent their housing selections.

Only 3 percent believe their retirement will be restricted by their financial situation. Given that 49 percent aren’t buying houses and 31 percent have no current pension contributions, that’s a sign of either great faith or magnificent oversight.

Given people’s general desire to have more than their income allows, these figures for pastors are remarkable. Two pastors did have interesting comments, however. One’s solution for money shortages is to “do more funerals.” (How do you drum up business?) Another said simply: “Damnable credit cards!”

Pastors aren’t about to quit. Among pastors surveyed, only 3 percent have seriously considered leaving the ministry for financial reasons, and 83 percent have never considered it. They’re in for the duration. The pastor of a large church in Indiana perhaps summarized this group’s inclinations: “I am not one to base my feelings on the amount of money in my pocket.”

This decision to stay is in light of pastors’ perception that they could earn more in secular labors. When asked “How do you think your personal financial situation would be affected if you left the ministry for other employment in the job market?” they thought they could do somewhat better-6.3 on a ten-point scale. (The laity placed them at 5.3, indicating only marginal confidence in pastors’ ability to improve their pay packages in the marketplace.)

Pastor’s income if in the secular job market:

Much worse Much better

1 2 3 4 5 * 6 * 7 8 9 10

Lay Leaders Pastors

We could find no statistical correlation between the pastors’ financial situation and their attitude toward ministry. This is truly remarkable. In the light of various real and perceived inequities, pastors consistently keep a positive overall view of their calling. They may be discouraged about their particular situation-“passive acceptance,” “mild resentment,” and “frustration” seem to be the most common responses to their plight-but their desire to minister remains intact.

Deep hurts do exist-for instance, the Southern Baptist from Texas who wrote, “I ought to be able to divorce my feelings from my performance, but it seriously impairs my attitude when bills pile up and I know I can’t increase my income,” or the Lutheran in California who penned, “Lack of money will prevent us from seeing our parents for the first time in seventeen years. I simply wish I could get more pay so I could joyfully go about my job.”

Yet a Wisconsin pastor has the final word: “It is frustrating not to be adequately compensated for a sincere and competent ministry, but I have been committed to ministry above financial considerations.”

Observations and Implications

What do we make of this information? Here are a few observations.

The task of setting pastoral salaries is crucial. In many churches, the process of setting or changing pastoral compensation is Byzantine. Some pastors have no idea how to go about it. As one lamented, “They don’t know how to compensate a pastor. They pull the figure for the raise out of a hat.”

If a businesslike procedure is to be followed, probably the starting place would be a job description. Only 53 percent [36 percent] of the surveyed pastors have job descriptions, and of these, half have no review procedure. However, nine out of ten pastors have their salaries reviewed at least annually.

When we asked pastors and lay people to rank how important various factors ought to be in evaluating a pastor’s level of compensation, we found close correspondence with the 1981 responses. Table 3 lists the factors by how pastors and lay people ranked them in 1981 and 1988.

“Amount of responsibility” and “ability to relate to a wide range of problems” rank one and two on all four lists, and “pulpit ministry” is consistently high. Considered relatively unimportant are “size of professional staff’ and “compensation of fellow clergy in denomination.” “Age” is dead last on each list, but, interestingly, the survey shows compensation to increase with every successive age group.

The ranking of “length of service” points out a discrepancy between clergy and lay perceptions. Pastors consider it third most important, but lay people rank it eleventh. We suspect it has something to do with laity’s penchant for results (ranked fourth compared to pastors’ seventh) over longevity. Pastors know what it takes to stay put and face problems, but lay people want something positive to happen.

Pastors also put more stock in educational achievement. Perhaps, having passed the trials of university and seminary, they overrate the importance of degrees. Again, lay people appear more practical; they value the size of the budget-their ability to pay the pastor-much greater than does a pastor.

Just as in a marriage it’s good to discuss role expectations, so it would be helpful for pastors and their boards to rank this list and discuss their expectations-apart from the salary-review process. Through open discussion, each will better understand the factors the other values for setting compensation at a later date.

Working spouses need consideration. Seventy-eight percent of lay respondents think a pastor’s spouse should feel free to work outside the home to supplement family income, and 55 percent of pastoral spouses do just that. They contribute an average of $10,500 to the family budget.

We analyzed their motivation for working. Overall, 38 percent are at it only because of financial need, 19 percent choose to work for career purposes, and 43 percent list a combination of need and career. Not surprisingly, among the pastors dissatisfied with their compensation, a greater proportion attributed to financial need their spouse’s reason for working.

This created frustration. From Indiana, a Christian Church minister protested: “My income requires that my wife work to meet our financial needs. This is deeply frustrating and infuriating since it strikes at our home situation directly.”

The suggestion: Churches and pastors need to work out and make plain what is expected of spouses. Does the church expect the spouse to contribute to family support? If so, the reasons for that expectation should be spread before the pastor as clearly as possible.

For the most part, pastors are doing okay. It’s the rare pastor who’s paid what he or she is worth, but the vast majority of pastors aren’t headed for the poor house, either. They’re holding their own, perhaps even getting a little ahead. They’re making it-some by hiding the credit cards, others by talking with the trustees.

Some bleak drawings, however, do remain at the edges of the picture, such as the plight of a pastor who wrote: “I have a sick child, and the only way to resolve our financial strain is for my wife to work. But who will take care of the child? Many people in the church feel the wife should not work so the parsonage family can ‘keep up appearances.'” We hurt with those who are hurting.

Yet, gladly, for the most part the scene is pleasant, although not spectacular.

Remember Brother Goodwin, the frontier circuit rider? One dark November night he lost his way in a dense forest. Unable to rouse dog or man by “hallooing,” he decided to wait for morning. He wrote: “I made a bed of my saddle blanket, a pillow of my saddle, and a covering of my overcoat. I tied my horse, by the bridle, to my arm, so that if a bear or a panther should approach, my horse would become afrightened, and, by pulling at the rein, would arouse me. It was a pretty cold night. The first snow of the season fell during the night. I was near the Patoka [River] and could hear the rippling water as it rushed against the bank and over the drift-wood near me. As I lay there, I thought it was a great pity that all that sweet music was being wasted on the air, without an ear to hear it, or a human heart to enjoy it.”

Lost in the woods, sleeping on the ground, covered with snow, underpaid, overworked-and content.

Paul wrote, “I have learned to be content whatever the circumstances” (Phil. 4:11b). Elijah Goodwin knew such contentment. May we experience it, too.