Pastor's Salary

I've seen a few references to "free house" from various posters.

Most churches that have a parsonage use it to justify paying the pastor less. It is not really a "free house." What is happening is that the pastor is paying for the church's parsonage, because what would usually be paid to him in a housing allowance is going to pay for the parsonage.

He never accumulates any equity. Thankfully, many if not most, SBC churches are getting out of the parsonage business.

Here's an idea....Suppose a church has a parsonage. It is paid for...in reality, previous pastors have paid for it. The church sells the parsonage. The money is placed in some type of savings instrument and designated as an "equity fund." When the next pastor is called, especially if he has been living in a parsonage, he has no money to fund a down payment on a house. The church uses the equity fund to loan him a down payment at a low rate of interest. An agreement can be drawn up for the pastor to pay interest payments or interest plus principle payments to the church each year. Should he leave the church before the equity loan is paid in full, the church can give him a reasonable amount of time to sell his house and repay the church. Just a thought...might be worth considering.

 

I was a member of a 501(d) for 24 years, and I can probably speak to that. Strictly speaking, I don't see that as an absolute requirement, but practically speaking, virtually all of them are communal groups: Amish, Shakers, Bruderhof, etc. The IRS calls them "apostolic organizations" because they follow the example of Acts 2:44-45 and 4:32.

The essential requirements are (1) the income for the group come from ministry-owned businesses or farms, not from a commune where members all work at "external" businesses, and (2) all the income goes into a common purse, and (3) all the bills are paid from that joint account. Simply living communally, where Adam works at Walmart, Bob works at McDonald's, and Carl works at Avis, is not enough, even if they put their money into a joint account.

Because so few organizations qualify for 501(d), the IRS doesn't have a separate tax form for them, so they make them use the same form for partnerships, Form 1065. The church has to figure out what portion of its income went to general living expenses (that part is taxable) and what part went to ministry expenses (that part is tax-exempt). Then you take the taxable income, divide it by the number of members, and each member pays income tax on that "share" of the "partnership income", even though legally it's a 501(d), not a partnership.

So if your church/community is 501(d), its income will be partly taxable and partly tax exempt. Further, donations and contributions made to it by outsiders are not tax-exempt, since it's not a 501(c) organization. Probably more than you wanted to know.

--
Eric Pement

 

I see... Guess I won't be doing that then.

Thanks Eric!

MH

 

I am not a pastor - yet (I am working in that direction). I have a very close firendship with my current pastor, who is also my mentor. I do hold a ministers license, and I do pulpit fill at my church and other area churches (without regard for denomination) as called upon.

First, I would comment that in comparison to my pastor's salary (our church is smaller), his appears generous to about right. The notable difference being that my pastor has served for the past three years without any pay increase at all, simply because our finance committee feels we cannot afford to pay him any more than we do. Our pastor does not complain about the moeny - his complaint, if he voices one, is that he wished more members of the congregation would take evangelism more seriously.

I couldn't help but notice that the pastor in question here seems to be concerned about respect and money. I can understand why a pastor would be concerned about how well he is respected by his congregation, but I would hope that such respect would be based upon his faithfulness and dutifulness to the Gospel of Jesus Christ, and would therefore, have nothing to do with how much or how little he was paid. (I grew up in a SBC in Mississippi, and I now attend an ABC church in Illinois - what they have in common: most members don't have a clue about how much their pastor makes, or don't - and most of those, don't care to know.) That he opts out of Social Security and then complains about it, is a "tell" to me that he lacks Heavenly Security. We often forget something about our pastors - they sometimes need a pastor themselves. I pray that someone in that church will step up and pastor that pastor.