We continue our conversation about clergy well-being, clergy finances and clergy excellence.
Each congregation of the Indiana Conference desires to have a pastor who is a pastor of excellence. Did you know that as laity, you can proactively participate in helping your pastor experience such excellence?
In the October issue of Together, I reminded you that clergy finances have an impact on the overall state of clergy well-being. If a clergy person’s personal finances are creating personal challenges, that clergy person will not be able to lead his or her congregation from a point of excellence.
Did you know that clergy have dual status when it comes to federal income taxes? For federal tax purposes, clergy are considered employees of the church. For Social Security tax purposes, clergy are considered to be self-employed. With the self-employed status, clergy pay 15.3 percent in Social Security taxes (13.3 percent in 2011) in addition to federal and state income taxes.
Although there are benefits that can assist clergy in lowering their federal income taxes, such as housing allowances and exclusions, personal contributions to the United Methodist Personal Investment Plan (UMPIP) for clergy, and Accountable Reimbursement Plan, the Social Security tax is an additional financial burden clergy have.
Do you know what your pastor’s compensation is? Do you know what your pastor’s cash salary is? As you reflect on the compensation your pastor is given and the deductions – such as his or her personal share of health insurance and personal contribution to PIP – what are the federal, state and Social Security tax implications for your pastor?
Has your pastor received a raise to adequately compensate for his or her personal share of the health insurance cost? Is the parsonage located in a school district that no longer offers free bus service to its schools? Does your pastor have educational debt? Is your pastor making personal contributions to the pension fund? Does your pastor have an emergency fund?
The answer to these and other questions you might raise may help you to better understand in a compassionate and supportive way how your pastor’s call to representative ministry entails financial implications you may not have thought about in the past.
How can your congregation be proactive in assisting your pastor to be a pastor of excellence? Consider the following ideas:
- Encourage your pastor to take advantage of stewardship and finance related educational opportunities that will benefit your pastor personally, as well as the congregation;
- Encourage the congregation’s leaders to participate in training events that will teach them how to communicate the mission and ministry of the congregation;
- Encourage your pastor to preach and teach on the topics of faith and money on a regular basis;
- Pass an Accountable Reimbursement Plan for your pastor at your church’s charge conference;
- Encourage your pastor to make personal contributions to the UMPIP program. If your pastor cannot do so financially, support your pastor by assisting him or her in applying for a Rejuvenate grant;
- As a congregation, request and expect a year-round stewardship education program to be offered to the congregation;
- Avoid balancing the church’s budget by decreasing the clergy compensation;
- Encourage the Staff-Parish Relations Committee and your pastor to take advantage of those cost-saving measures your pastor is eligible for and that require charge conference action;
- Encourage the laity of the congregation to participate in faith-based personal stewardship education programs that will help them to become financially strong;
- Encourage your pastor to apply for Rejuvenate grants if needed; and
- Support future clergy in becoming clergy of excellence by financially supporting the campaign of the Rejuvenate Project.
The above ideas will not only assist clergy in leading from a point of excellence, the ideas also will benefit congregations in becoming stronger, more viable congregations. Clergy excellence is the goal of the Rejuvenate Project. Let’s make this goal a reality for all clergy in the Indiana Conference.
To find out about its learning opportunities and grants, visit Rejuvenate’s website at www.rejuvenateindiana.org.
Michelle Cobb is executive director of the Indiana Conference Rejuvenate Project based in Indianapolis. To contact her, call 317-924-1321 or send e-mail to firstname.lastname@example.org.