LifeWay Research 2008 Church Compensation Study: Pastor Raises Beat Inflation--Barely

Written by Mark Kelly

NASHVILLE, Tenn. – Inflation didn’t eat away all of the average Southern Baptist pastor’s pay increase over the past two years, but it came close – and churches may have a more difficult time keeping staff members ahead of inflation in 2008.

That’s one finding of the SBC Church Compensation Study, a survey of 12,854 staff positions in Southern Baptist churches. The survey was conducted by LifeWay Research, in cooperation with GuideStone Financial Resources and Baptist state conventions through July 1, 2008. The study also found that almost two-thirds of churches are partially or fully paying for their full-time senior pastor to have medical insurance and that compensation can vary significantly depending on geography, worship attendance and the pastor’s experience and education.

All the data acquired by the study has been compiled into a Web-based tool that will help churches as they begin planning staff compensation packages for their 2009 budgets.

Adjusting for church size, the average full-time Southern Baptist senior pastor’s compensation (salary and housing) rose 7.26 percent between 2006 and 2008. That rate of change was only slightly higher than the compounded 7.01 percent inflation rate for the same two-year period, according to figures supplied by the U.S. Department of Labor’s Consumer Price Index.

With no adjustments for church size, compensation for other full-time staff ministers increased 12.24 percent between 2006 and 2008, while compensation for full-time office personnel increased by 9.55 percent and by 9.92 percent for full-time custodians.

Churches partially or fully pay for their full-time senior pastors’ medical insurance 65 percent of the time, the study found. That includes 36 percent that at least partially fund family coverage, 19 percent who at least partially fund coverage for pastor and spouse, and 10 percent who provide coverage only for the pastor.

The research also discovered that 38 percent of those pastors have life and or accident insurance paid for partially or fully by their church, 32 percent have a disability benefit, 27 percent have dental insurance and 12 percent have vision insurance.

Help for smaller-membership churches

These statistics were determined after adjusting the data to account for church size, which indicates that even smaller-membership congregations are trying to take care of their pastors’ needs, said O.S. Hawkins, president of GuideStone Financial Resources.

"We are pleased to see that two-thirds of SBC churches are offering some level of medical coverage for their ministers and families," Hawkins said. "What is most rewarding is recognizing the number of smaller churches that understand that this is an important benefit for the overall financial well-being of their ministers."

Attendance, membership, budget

The study also found several factors significantly affect a full-time Southern Baptist pastor’s compensation, said Ed Stetzer, director of LifeWay Research.

"Average worship attendance accounts for the most variance in pastor salaries – 54 percent," Stetzer said. "The membership of the congregation is the next most significant factor, accounting for 50 percent of salary variance. Church budget also explains a noticeable amount of variation – 35 percent."

Each additional weekly attendee at a church increases, on average, a full-time senior pastor’s annual compensation (salary and housing) by $34, the research showed. Each additional church member increases compensation on average almost $6. Each additional dollar of church budget, however, increases it by less than a penny.

While statistically significant, a pastor’s years of experience – even at the same church – only explains a small variation in pastoral compensation, Stetzer said. Each additional year of pastoral experience on average increases a full-time senior pastor’s annual compensation by $254.

"It’s no surprise that pastors who have the additional responsibility of leading a larger church are paid more, but it is surprising how seldom churches reward experience," said Scott McConnell, associate director of LifeWay Research.

McConnell noted the study also uncovered several other interesting factors that affect compensation.

"Unweighted regression analysis provided some additional statistics," he said. "Compared to a pastor serving in the South, a full-time senior pastor in the Midwest on average receives $2,124 fewer dollars of total compensation; a pastor in the Northeast receives $6,978 more; and a pastor in the West receives $3,795 more."

Education also accounts for significant variance, McConnell added.

"A full-time senior pastor who does not have a seminary degree on average receives $3,660 fewer dollars in total compensation than a pastor with a seminary degree," he said. "A pastor who has a doctoral degree on average receives $10,015 more than a pastor with a high school education."

A valuable planning tool

The data gathered by the SBC Church Compensation Study have been compiled in a Web-based tool to help churches as they begin planning salary packages for 2009 – a process that promises to be very challenging in today’s uncertain economic climate.

"The SBC Church Compensation Study is an important resource for churches to use as they seek to determine appropriate salaries for their staff members," Hawkins added. "Our prayer is that churches will use it both as they seek to hire new staff, but also as they retain existing staff to ensure their compensation is competitive with other churches and within their communities."

The Web-based tool, which can be found at www.lifeway.com/compensationsurvey, will help churches determine appropriate salaries for their staff members by looking at survey data from churches similar to their own, based on geographical location and church size.

Staff and churches seeking more information related to retirement, life, health, life and disability benefits, salary, and compensation can contact GuideStone at 1-888-98-GUIDE (1-888-984-8433) or visit www.guidestone.org.

Notes: For the purpose of this article, pastor responses were weighted to account for a lower response rate from smaller-membership churches. When using the online tool, national totals may be somewhat higher than these weighted totals. This impact, however, is minimized when one looks at the results by church size categories or uses the customized report. The margin of error in the study varies, based on the number of responses for each ministry role. When running customized reports online, error can be minimized by selecting criteria that allow for larger numbers of participants. Part-time and interim designations in the survey did not take into account the number of hours worked or other factors that may affect the comparability of these averages.