It may be “back to school” time for teachers and kids but it’s “back to budgeting” time for church sessions. The single largest expense for the majority of churches in the Presbyterian Church (USA) is personnel. And the single most significant driver of the personnel line item is the pastor’s salary and benefits.
As an illustration of the “new math” that sessions will need to incorporate into their budgeting formulas for 2014, let’s look at an “average” PCUSA church in rural Nebraska.
According to the presbytery website, Central Nebraska Presbytery has 40 congregations but less than 40 minister members. The 40 churches are located in 21 of the 46 counties encompassed by the presbytery.
- 23 churches have pastoral positions. Fifteen are filled, eight are vacant. Of the 15 pastors currently serving congregations, 8 are women and 7 are men. Among them is one clergy couple serving two churches.
- 14 churches are served by 10 Commissioned Lay Pastors (CLP). Four of the CLPs are women and six are men.
- 2 churches are served by one Temporary Supply Pastor and one church is served by a Parish Ministry Associate.
Looking specifically at the churches with pastoral ministry vacancies we discover that:
- Keystone and Bethany in Lemoyne have 10 and 4 members respectively.
- Bethany in Ewing, Neb., has 48 members, 25 in worship and annual per member giving of $343.
- The United Church in Ewing has 58 members, 30 in worship and per member giving of $380.
- Stapleton First has 67 members and a robust $1,321/member giving level.
- Gothenburg’s First has 152 members, 80 in worship and per member giving of $834.
- O’Neill First has 181 members, 68 in worship and per member giving of $389.
- Valentine Presbyterian has 224 members, but their 2010 statistics indicate that their average giving per member is $585.
The reason per member giving is emphasized is that it is a key indicator to the “math” related to calling a pastor.
Last year, the national average for all PCUSA churches was 180 members giving an average of $1,207.44 each. But in Central Nebraska, according to PCUSA statistics, the average per member annual contribution (in 2010) was $693.74.
In 2013, the minimum effective salary (cash salary + housing) set by the Board of Pensions for the purpose of calculating benefits is $40,000. In 2014 the minimum is $42,000 and in 2015 it rises again to $44,000. Also rising are the percentage rates for the Medical Dues portion of benefits.
Pension dues are 11 percent of effective salary. Death and Disability benefits dues are 1 percent of effective salary. Medical Plan dues are 21 percent in 2013 and cover the member plus partner and any/all children. So, currently, the math related to benefits is 33 percent of effective salary.
In 2014 that rate rises to 35 percent of effective salary and in 2015 dues for members only coverage will remain at that rate but partner, child(ren) or family coverage will rise to 36.5 percent.
So, for a church with a pastor who is married and has dependent children all covered, budgeting for benefits means — at the minimum allowable levels:
2013: 40,000 x .33 = $13,200 for a salary + benefits line item of $53,200.
2014: 42,000 x .35 = $14,700 for a salary + benefits line item of $56,700.
2015: 44,000 x .365 = $16,060 for a salary + benefits line item of $60,060.
This is the bare-bones starting point for budgeting for a session that has, or wants to have, a pastor. Before you’ve turned on the first light, paid the first building insurance premium, contributed the first dollar toward your pastor’s Social Security, considered dental coverage, bought curriculum or supplies for Sunday School … before you’ve supported the first missionary, done the first outreach event, printed the first newsletter or paid your church’s per capita.
In 2009, according to PCUSA Research Services survey, the average Presbyterian church spent 56 percent of its total budget on staff salaries and benefits. If we applied that statistic to our numbers above, the average church would have a 2013 budget of $95,000, 2014 budget of $101,250 and in 2015 a budget of $107,250.
In addition to growing the budget, they’ll need to grow the congregation. Doing the math, in order to simply pay for the minimum salary and benefits for a pastor in 2013 a church needs 44 members each giving at the national $1,207.44 level. In 2014, that same church will need 47 members, and in 2015 they’ll need 50 members giving at least $100/month each just to pay for the pastor. To cover the full budget they’ll need 79 members in 2013, 84 members in 2014 and 89 members in 2015.
All of which would buck the trend of declining membership in PCUSA churches nationwide.
What about our sample churches in Nebraska?
Well, here’s where the math gets a little more complicated. The minimum salary figure differs presbytery to presbytery. No matter the membership, no matter the demographic or economic realities of the community, no matter the average wage or salary of others in the same town, churches in a particular presbytery must comply with that presbytery’s “minimum terms of call” standards for pastors.
So, what’s that number for the churches in our sample? Well, at the October meeting of Central Nebraska Presbytery, the committee on ministry will be recommending that the 2014 minimum terms of call for a new pastor be $43,315.32. Sessions in Central Nebraska will need to plug that number into their budget calculations. The personnel line item is going up.
Salary + housing (minimum) = $43,315.32
Which means that in 2014 the minimum number that a session can plug into the budget for a pastor’s salary, housing and benefits is $43,315.32 x 1.35 = $58,475.68. If that accounts for the 56 percent of the total budget, they’re looking at an annual budget of $104,420.
Let’s see how that translates for our sample of eight churches in that presbytery that currently have pastoral vacancies.
According to the presbytery minutes from March 2013, the presbytery closed a church in Ord and is in the process of closing the Lemoyne congregation. Sadly, Keystone, with only 10 members, is also likely to close. Also, as The Layman reported in June, the Stapleton congregation now worships as two congregations: one PCUSA and one EPC. How this affects the ability of the First Stapleton congregation (PCUSA) to finance a pastor is unknown. The presbytery minutes indicate that answering that question is a priority for the Administrative Commission currently functioning as the session.
Based on the math, it’s hard to see how neither of the Ewing churches (58 and 48 members respectively) is likely able, on their own, to call a pastor.
That leaves Gothenburg’s First, O’Neill and Valentine.
O’Neill has 181 members, 68 in worship and per member giving of $389. That translates into annual contributions of $70,409. Calling a pastor, even at the presbytery minimum, seems out of reach.
Gothenburg’s First has 152 members whose average per member giving is $834. That translates into annual contributions of $126,768. Valentine Presbyterian has 224 members and their 2010 statistics indicate that their average giving per member is $585. If those numbers hold today, that would give them a budget of annual contributions of $131,040. Like Gothenburg, Valentine historically calls pastor at terms higher than the presbytery minimum, but as minimums rise along with benefit cost as a percentage of salary and housing, prudence is advised.
None of these formulas take into account the utilization of endowment or investment funds, the creative financing of ministry through rental of church facilities to third parties nor additional means of income generation. Those variables are specific to the churches themselves and that math will necessarily be done in the coming weeks by each session as they budget for 2014.
If you would like to research similar information about your congregation, visit: http://www.presbyterianmission.org/ministries/research/help-congregations/
If you need some tutoring on the new math or are not sure about how this is computed, you should contact your committee on ministry liaison, the presbytery office or the Board of Pensions at www.pensions.org.
Or, if you’re one of those kids who just likes to go directly to the calculator, there’s a dues calculator on the Board of Pensions site: http://www.pensions.org/AvailableResources/CalculatorsandModelingTools/Pages/Dues-Calculator.aspx