Question: Who owns material created by a clergyperson or other employee of religious institutions?
Answer: A recent article in Christianity Today (“CT”) posed this question and provided some intriguing answers. CT noted correctly that the U.S. Copyright Act of 1976 makes the clergyperson’s creative work a “work for hire,” which means that the copyrights in sermons are owned by the church or religious organization that employs him or her. CT also called attention to an issue that intellectual property attorneys often miss: for a non-profit organization, such copyrights are considered charitable assets and must be used for charitable purposes. If a charitable organization gives away its copyrights, then it may run up against the Internal Revenue Service’s (IRS) ban on “private inurement” because of the resulting personal gain. If copyrights are handled incorrectly, the organization could lose its tax-exempt status under Section 501(c)(3), and the individuals that receive the copyrights could also face other adverse tax consequences.
According to that, it's not merely between the pastor and the hiring church. Some legal advice is wrong, which is the point of that last statement. While they may have an agreement, it may affect tax exempt status. They may have to choose.