In 2008, it will cost more for churches to do business than it costs this year. Yes, the gas and electricity bills will be higher. Insurance rates will likely increase. Even what it costs to keep the grass mowed will go up. But that is not the primary concern. Churches should be aware that they will experience increased business costs related to pastors and church staff members in the coming year.
At the last meeting of the trustees of GuideStone Financial Services, formerly known as the Annuity Board of the Southern Baptist Convention, approval was given to raise the costs of most medical insurance plans offered by GuideStone. To be fair, GuideStone has worked hard to hold down medical costs for the past two years. But this year, the cost of medical insurance for most church staff members and their families will be going up.
Providing medical insurance for the pastor and church staff members is part of the cost of a church doing business. Public school boards across Alabama include medical insurance for their employees as a business expense incurred by the district. The growing number of automobile manufacturing plants in Alabama do the same.
In neither case is the cost of medical insurance figured as part of the salary paid the teacher or the production worker.
The church is no different. As an employer, the church has the responsibility to provide adequate medical insurance for its full-time employees, and that cost is just part of the business expense incurred by the church.
Responsibility for financial protection
There is more. Churches are frequently counseled to make sure their pastors and church staff members have adequate insurance coverage. Obviously insurance coverage protects the minister’s family in times of death or severe injury. It also protects the church from what could be long-term financial responsibilities.
A church well known to this writer had the tragic experience of its pastor being killed in an automobile accident. He left a wife and three daughters, the oldest in elementary school. The church had prospered during the pastor’s seven-year ministry and was in the midst of a building program at the time of the pastor’s death.
Church leaders had decided to crimp on all expenses for the building program. That included the pastor’s salary, retirement and protection benefits. It would all be made up in the future, they reasoned. But there was no earthly future for the pastor, and when he died, his family had only a few thousand dollars in savings.
Seven months later, the church found itself in the embarrassing position of asking the pastor’s widow and children to move out of the pastorium so the new pastor would have a place to live. Some church members tried to help the widow financially. The church even took up an offering for her, but it could not make up in individual gifts what it had taken away by not providing adequate protection benefits in case of death or disability.
Alabama Baptists are fortunate that protection benefits including an accidental death benefit and disability insurance are provided by the state convention when a church makes a minimum contribution to a minister’s retirement program.
Of course, a church should be placing an amount equal to at least 10 percent of a minister’s salary into the minister’s retirement program. This is still less than churches in most long-established denominations are required to put into ministerial retirement programs. Some denominations set minimum standards for churches in terms of salary and support for pastors. An amount equal to 15–20 percent of salary designated for retirement is not an uncommon requirement.
Baptist conventions cannot require minimum standards for retirement but guidelines can be advocated. The 10 percent guideline has long been promoted. Unfortunately, as retirement is lasting longer, as inflation reduces the value of savings and as health-care costs continue to rise, it is more and more obvious that the 10 percent guideline is inadequate. Too many ministers who have given their lives serving churches, while receiving minimum financial support, are now finding themselves inadequately prepared for retirement.
GuideStone’s Adopt An Annuitant program allows some in the most severe circumstances to receive a little extra financial support, but many, many ministers just eek out an existence from week to week and month to month because the churches they served did not adequately provide for their retirement.
The 10 percent guideline should be the minimum churches place in retirement programs. Some caring churches put in more than the 10 percent. Some provide the basic 10 percent and then match what the minister puts in above that amount. Yet some Alabama Baptist churches still fail to meet the minimum guideline. That is a sad commentary on the church and a future economic hardship on the minister.
Providing for church staff
There are other business expenses that churches can expect to increase in 2008 — things like mileage reimbursement for using one’s car on church-related business and convention expenses. It is amazing how lodging costs have increased. Only after these business-related expenses are provided will a church be able to talk about the take-home pay of the pastor.
Cost of living for the past 12 months is just under 3 percent, according to official statistics. That means a church must provide at least a 3 percent cost of living adjustment just to stay even. Only after that percentage is surpassed will there be anything resembling a raise for the pastor or other ministers.
So it will cost more to do the business of the church in 2008. But these are all important costs, necessary costs for churches to appropriately care for their pastors and other ministers.
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