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The economics and ecclesiology of sustainable pastoral ministry: Part 1

The Reverend Dr. Frank Clark Spencer

This is the first article of a three-part series. Part 1 reviews research on how ministers are compensated and what leads to their flourishing in their roles in a congregational setting. Part 2 describes supportive programming consistent with the research. Part 3 provides new data on outcomes associated with current Presbyterian Church (U.S.A.) practices and why programmatic solutions must give way to structural change.

Undermining our ministers: How the corporate model has become our ecclesiology

As a part of my doctoral research, I examined the theology of call and the associated ecclesiology of mainline Protestant denominations. The study group included the United Methodist Church (UMC), The Episcopal Church, the Evangelical Lutheran Church in America (ELCA), the Presbyterian Church (U.S.A.) [PC(USA)], the American Baptist Churches USA (ABCUSA), and the Southern Baptist Convention (SBC). According to Pew Research Center data, this analysis group accounts for 29 percent of all Protestant adherents in the United States and 56 percent of the mainline designation.i The ecclesiology of this group ranges from highly episcopal (rule by bishops) to entirely congregational (rule by local boards). This research demonstrated that despite widely varying processes for ordination and employment in the congregational setting, each of the observed traditions follows the same variables in determining compensation. The explanation for such consistency in compensation outcomes in the face of divergent processes can only be explained by the influence of factors well beyond ecclesiology and theology. It appears the primary factor driving clergy compensation in United States mainline Protestantism is the adoption of the U.S. corporate model. If that is true, we must examine the nature of that corporate model and consider how corporate characteristics manifest in the church context.

The corporate model

Almost every legal entity of any scale in the United States is formed as a corporation.  These corporations are ubiquitous, not just publicly traded ones, but every hospital, golf course, charity, franchisee, really any entity that interacts with the public or holds assets. We don’t see it in our day-to-day life, but every commercial building we visit or apartment community is its own corporation.

To understand the implications of this reality, we must first understand the structure itself more precisely. The Fordham Journal of Corporate & Financial Law has published A Brief History of the Corporate Form and Why it Matters, which offers a useful overview, albeit focused primarily on profit-seeking entities.

“A corporation is a legally distinct entity that has many of the rights attributed to individuals.[1] These rights include the ability to enter into contracts, take out loans, sue others, be sued, own assets, pay taxes, and so on. …[4] Limited liability allows individuals to avoid personal liability for a business entity’s losses, thereby allowing risk-averse individuals to assume risks they otherwise would not have undertaken.[5] Corporations also allow individuals to pool resources to achieve goals that would be unattainable by a person acting in an individual capacity, and can last longer than an individual’s lifetime.”[6]ii

This corporate approach to the aggregation of assets and human resources in an entity with limited liability for the pursuit of goals that exceed the capacity of any individual has inescapable derivative consequences. If assets and resources are accumulated within a fixed boundary, then the budget and finances must exist within those fixed boundaries. Likewise, any employees of that entity must rely solely on the financial capacity of that same entity. Our laws and regulations reinforce the concept. State governments record every corporation in their Secretary of State offices, like the recording of mandatory birth certificates for people. The U.S. government provides a unique employer identification number (EIN) for each corporation, which functions also as the tax ID number, corresponding to the Social Security number for individuals.

As congregations adopt these same principles, as they are foundationally rooted in the American psyche, it follows that the congregation must have its own budget, pay its own employees, meet its own expenses, provide for its own facilities, and act independently to protect its legal positions, whether with assets or liabilities. Within the Protestant structures, the corporation usually exists at the congregational level. Incorporation and the attendant assumptions have completely engulfed the Church. Almost any congregation with any assets will be structured as a corporation. In the Presbyterian Church, the constitution demands it.

“Where permitted by civil law, each congregation shall cause a corporation to be formed and maintained.iii

And if we needed any more clarity,

“The Presbyterian Church said its national leadership can’t act on behalf of member churches because they are separate corporations.”iv

Compensation in corporations and congregations

Somewhat like the myths we tell ourselves in church about fair compensation, the corporate world has its own set of myths about compensation: pay reflects performance; increased shareholder value results in higher executive compensation.  In reality, compensation is driven by what has come to be called seat value, as in the compensation follows the position rather than the performance of the individual occupying the seat. In 1990, Michael C. Jensen and Kevin J. Murphy published an article in the Harvard Business Review demonstrating that CEO pay had little or nothing to do with performance.v In a much more recent article, posted on the Harvard Law School Forum on Corporate Governance, the highest correlations to the CEO Pay Ratio were: number of employees, total revenues, and market These factors could be expressed in congregational terms as size of staff, total budget, and number of members. Is it any wonder that using the corporate model of church organization, senior pastor compensation follows an almost identical pattern?

The larger the congregation, the larger the budget, and the more well-to-do the lay leadership, the more the pastor is paid, regardless of performance or stated principles of the denomination. The converse is also true; the smaller the church, the more it will struggle, as that is the other tenet of the corporate model, each budget must stand on its own. The results then mirror the problems observed in the corporate world — severe income disparity between highest- and lowest-paid, between genders, and between white clergy and clergy of color.

Flourishing in ministry  

The corporate model explains part of our struggle to employ pastoral leadership in congregations and why part-time calls have been increasing, but the cash compensation is only one component of flourishing for pastors. Significant, recent research has identified what leads to rewarding vocational experience. To avoid burnout and/or disillusionment, pastors must experience daily well-being. Dr. Matt Bloom of Notre Dame says,

“Our wellbeing is shaped by, for example, by the health and vitality of our family, co-workers, neighbors, and friends. The contexts in which we live and work are important, as are the organizations in which we participate or are members. Some people live in contexts that constantly undermine their wellbeing. Contexts in which people are ostracized and marginalized, for example, are extremely hostile for wellbeing.”vii

Likewise, authenticity is required before any pastor can reach the state of thriving. This aspect asks, “whether how I spend my time and to what I contribute aligns truly with what I believe as a pastor.” Finding a fulfilling way to embody ministry in a self-fulfilling structure becomes critical to long-term flourishing.viii Particularly within the PC(USA), when ministers have invested significant time, effort, and often money in seminary education, the need for authenticity seems even greater. Being forced for economic reasons to work a secular job would not be supportive of this need for authenticity.

The data argues strongly against the current narrative that the future of ministry belongs to an increasing number of tentmakers. Well-being research conducted by Research Services of PC(USA) finds that tentmakers are the least satisfied group within the denomination’s ministers. Tentmakers are less satisfied with their role, their current position, their compensation, and benefits than any other subset of ministers.ix Rather than being an inclusive solution, the tentmaking concept is potentially a harmful shifting of economic responsibility from the congregation and denomination to the individual minister, a direct result of assumptions embedded in the corporate model.

The results of flourishing research define the practical components required for ministers to flourish and therefore thrive in a sustainable ministry environment:

  1. A structure that allows for full-time ministry so that authentic identity as pastors can be affirmed and ministers can devote themselves to the work of the Gospel and not the warehouse.
  2. Compensation that is sufficient to meet the daily needs of family, recognizing that almost no ministers are sole breadwinners but that their financial position must be reasonable.
  3. A structure that provides needed support in the form of education, benefits, and colleagues, such that contact with the larger denomination is seen as positive rather than stifling or, worse, diminishing.
  4. Help when needed to eliminate debt and other financial burdens.
  5. Denominational and congregational practices that work to support and affirm women, people of color, LGBTQ leaders, or any historically marginalized group.

Part 2 of this series will explore programmatic solutions that support sustainable pastoral ministry. 

i Pew Research Center  
ii Halloran, Tyler, A Brief History of the Corporate Form and Why it Matters, Fordham Journal of Corporate & Financial Law, Nov. 18, 2018.

iii Book of Order, G4.0101  
iv Associated Press, Boy Scouts’ bankruptcy creates rift with religious partners, September 24, 2021.  
v Jensen, Michael C. and Murphy, Kevin J., CEO Incentives—It’s Not How Much You Pay, But How, Harvard Business Review, May-June 1990.  
vi Burney, Ben, What Does the CEO Pay Ratio Data Say About Pay?, Harvard Law School Forum on Corporate Governance, 2018.  
vii Bloom, Matt, Flourishing in Ministry: How to Cultivate Clergy Wellbeing, Rowman & Littlefield, Lanham Maryland, 2019, page 23.  
viii Ibid  
ix PC(USA) Minister Survey: Wellbeing Report, Research Services, July 2021.