September - October 2018

Written by Don Walter
From his column A Minute with Don

minute-with-don-00-18_article.jpgWe hear a lot about “big data.” According to the ever popular Wikipedia, the term refers to huge amounts of information which change often and are difficult to structure in ways that traditional data management and analysis software can easily use. Those successful at mining such material are supposedly able to detect otherwise hidden behavioral trends in group preferences. If you’re in the business of selling hotcakes, hamburgers, or political candidates, this stuff matters. Behavioral patterns of large groups tell interesting stories.

I have long had a fascination with demographics and those who analyze such things. In a world that seems to value the uniqueness of the individual, it is fascinating to see how many commonalities we share. Apparently we’re all special in very similar ways.

Pensions and Benefits USA recently was privileged to work with members of GMC Research Services on a project related to U.S. pastoral compensation. After a period of not collecting this data, the church again started gathering it a couple of years ago. The reason for wanting these statistics is not to focus on individual churches, but rather to see what the data reflects for the USA church collectively. These materials have now been categorized and sorted for use with the compensation calculator at Congregations may use this tool when fulfilling their obligations as expressed in Manual Par. 129.8.

The big picture suggests a collectively strong commitment by Nazarenes to caring for our parsonage families.

In analyzing the data, Research Services Director Dale Jones said, “In 2017, Churches of the Nazarene on U.S. districts reported that they spent $305,310,648 on pastor, associate, and support staff salaries and benefits.” According to Jones that “equals 40.6% of reported expenditures.” In some cases, the amount was more than 45%. This generally would include salary, housing, and benefits but not expense reimbursements.

While this information does not qualify as “big data,” it does reveal an important truth. As a group, Nazarene congregations in the USA place significant value on those who serve in vocational ministry. In addition to what these local congregations spend, Pensions and Benefits USA generally pays about $43 million annually in benefits with dollars provided by both these congregations and individuals.

This is not to say ministers are highly compensated or overpaid. But when we look at the big picture and compare the amount of money available to spend, and how much is used to provide for those who serve, it is a compelling story that suggests a collectively strong commitment by Nazarenes to caring for parsonage families.

There is another important message to be drawn from this data. It doesn’t take much of a percentage of a large number to represent a significant expense. The payment of over $300 million dollars in salary and benefits represents a tax and reporting challenge. Small mistakes, repeated several times over in this exchange, could add up to millions of dollars. Based on decades of conversations with church staff and local church treasurers, it isn’t a matter of “if” this is happening, but rather “how much,” and what it is costing clergy each year.

A significant area of concern, especially with the new tax laws, is providing for the appropriate reimbursement and reporting of expenses. A local congregation’s failure to have a properly structured accountable expense reimbursement plan could be costly to the minister. The failure to take advantage of fully tax-favored benefits paid for by the employer is another concern. When it comes to efficiently and effectively structuring ministerial and lay employee compensation, the stakes can be significant. Certainly, it is not an exaggeration to say that hundreds of thousands—if not millions—of dollars are at stake each year simply with regard to how church employees are compensated and reimbursed for expenses.

Pensions and Benefits USA understands this. That’s why we post resources on structuring ministerial compensation at Each year we make available updated reporting guides for both clergy income tax and local congregations from the Evangelical Council for Financial Accountability (ECFA). We also encourage pastors and treasurers to take advantage of the ECFA’s excellent financial resources available through ChurchExcel.

God continues to bless His church by calling women and men to vocational ministry. They in turn bless the church with their faithful, dedicated service. It is encouraging to know that the church invests a sizeable amount of dollars each year for the care of her ministers. When this compensation and reimbursement process is done efficiently and accurately, all involved benefit, and we find comfort in knowing that the resources with which God has blessed us are being put to their best use.

Don Walter is director of Pensions and Benefits USA for the Church of the Nazarene.

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