By Warren Bird
Leadership Network’s salary report (download the free executive summary here) focuses on top-tier staff in larger churches. The report drew attention ranging from national media to people’s Facebook posts. People’s critique seemed sharpest on disclosure issues, such as the person who asked, “Shouldn’t all large churches follow Evangelical Council for Financial Accountability standards of the full board knowing compensation details?” (We join the ECFA in recommending “yes.”)
But no one said, “My, those large-church pastors are excessively paid.” I believe there are several reasons why:
1. Comparing for-profit companies to non-profit large churches is a difference of night and day.
Top-level salaries in for-profit companies have grown astronomically. The average pay for an S&P 500 CEO was $12.4 million in 2015, or 335 times the pay of a rank-and-file worker, according to a report from the AFL-CIO. This was not always so. As recently as 1965, CEOs made 20 times the salary of an average, non-management employee; by 1978, CEOs were making just less than 30 times the average employee; by 1989, CEOs made 58.7 times their employees; by 1995, it was 71.6 times; and by 2014 CEOs earned 303 times as much as the average, non-management employee, according to another study.
2. Comparing most non-profits to large churches is also quite a contrast.
For example, if you look at higher education salaries (earlier year free here), they tend to be far higher than large-church senior-level salaries. Likewise, you’ll see that most church salaries are lower than larger non-profits in your area such as United Way or YMCAs (if you’ll look at Form 990 salary data available at places like Guidestar).
3. Historically, pastor salaries have been lower than community averages, but are increasing.
Clergy make less money than others with similar levels of education, but that gap is lessening, according to a recent report. In particular, clergy have lost ground to doctors, lawyers, and investment bankers, but they have gained ground relative to everyone else. Although clergy still earn less than comparable workers, their position has improved in recent decades relative to all but the highest earning occupations. However, these gains are largely because of decline in the number of hours clergy report working. Interestingly, according to a recent Christianity Today report, pastors feel the pinch less in salary and more in tight benefits and low savings.
Again, download the free report, “12 Salary Trends Every Church Leader Should Know—Executive Summary” at leadnet.org/salary.