5 Best Practices for "Other Ministry Income"
Guidelines for dealing with money that's not a part of your regular salary.
5 Best Practices for "Other Ministry Income"

Editor's Note: In his free ebook, The Minister's Salary, Thom Rainer addresses the issue of "other ministry income"—income ministers receive from services offered at weddings, funerals, revivals, speaking engagements, etc. While some minister's argue that such income is gift income and tax exempt, Rainer stresses that the IRS is clear: "this income is earned in the course of your work and is thus subject to taxation." He then goes on to offer the following best practices, which are based on conversations he's had with dozens of ministers.

Best Practice #1: It is okay to accept other ministry income. You have earned this income by conducting a funeral, officiating a wedding, or speaking somewhere beyond your church. You had to prepare extra work. You sometimes had to give up your weekends, particularly with weddings. It is one extra assignment to a schedule that is already busy.

Best Practice #2: It is generally advisable not to set fees. Leave the amount that you will receive to those you are serving. Sure, that means you will sometimes receive very little and other times receive nothing. But you are already receiving a salary from your church. Fee setting typically sends the wrong message.

Best Practice #3: Be willing to do these services for nothing. There will be some situations where the family or organization has very little financial means. Accept the reality that a certain number of your weddings, funerals, and speaking engagements will result in no outside income. For example, civic organizations and schools rarely will pay someone to speak. And there will be times that it is obvious the family or person cannot pay. Graciously decline any offers they make, and be grateful for the opportunity to minister to them.

Best Practice #4: Always express gratitude for anything you receive. I know a few pastors who take a few minutes to write a brief handwritten note every time they receive an honorarium or stipend. That is a class act that should be emulated by others.

Best Practice #5: Do not anticipate other ministry income in your budget. Other ministry income is unpredictable, uneven, and usually modest in amount. Do not build your financial lifestyle predicting these funds. Decide ahead of time how that money will be used and stick to it. Some ministers put it toward retirement. Some put it toward special savings accounts for items like automobiles. Some put it aside for their children's college fund. Some use it to pay down extra principal on debt. And some give the funds to their spouse for extra spending money.

This post was adapted from the free ebook, The Minister's Salary, by Thom S. Rainer. Dr. Rainer serves as president and CEO of LifeWay Christian Resources. Among his greatest joys are his family: his wife Nellie Jo; three sons, Sam, Art, and Jess; and seven grandchildren. Dr. Rainer can be found on Twitter @ThomRainer and at facebook.com/Thom.S.Rainer.

For help determining fair and reasonable compensation for the entire church staff, see the 2014-2015 Compensation Handbook for Church Staff; for comprehensive help understanding tax laws, see the 2014 Church & Clergy Tax Guide.

This content is designed to provide accurate and authoritative information in regard to the subject matter covered. It is published with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. "From a Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers and Associations."

Due to the nature of the U.S. legal system, laws and regulations constantly change. The editors encourage readers to carefully search the site for all content related to the topic of interest and consult qualified local counsel to verify the status of specific statutes, laws, regulations, and precedential court holdings.

Recent Posts
Subscribe to Church, Law & Tax
Church Board Guide to Developing a Risk Management Strategy

Church Board Guide to Developing a Risk Management Strategy

Learn why it is essential your church develop a risk management strategy and how to implement the strategy in your church.
Liability & Church and State Issues: Volume 4 of Pastor, Church & Law

Liability & Church and State Issues: Volume 4 of Pastor, Church & Law

Learn which local, state, and federal laws apply to religious organizations.