Jump directly to the content
Excessive Pay and Benefits
Though rare, blind spots can trip up any church.

The notion that churches pay excessive salaries and benefits to pastors and staff sounds delusional. In fact, excessive compensation is a relatively rare occurrence. But when it happens, excessive compensation often becomes public, scandalous, and potentially damaging to the reputation of the church as a whole. Huge houses for ministry leaders, air-conditioned houses for their pets, fleets of fancy cars, and a general lack of financial transparency tends to get the attention of certain people—including the media, federal regulators, and United States senators.

Federal inquiries

In 2007, Sen. Chuck Grassley (R-Iowa) launched an investigation into the financial practices of six high-profile media ministries. The summary of the probe noted that tax provisions affecting churches and religious organizations had not been updated in decades and that many of the same financial accountability issues that were raised in past scandals still exist.

"While the majority of churches and religious organizations operate with policies and procedures that make them accountable to their members, it is the small minority that don't that are subject to scrutiny by the members and the public, including the press," the report said.

No allegation of criminal wrongdoing was made against any of the six ministries. However, Grassley's original investigation has entered a second and more general examination of the self-governance of ministries and nonprofit organizations. This examination will look into a variety of financial issues, including excessive compensation.

Article Preview

This article is currently available to ChurchLawAndTax.com subscribers only. To continue reading:

View All
from our store
Church Finance

Church Finance

Learn about budgeting, financial reporting, tax compliance, insurance coverage, and more.
The 2019 State of Church Compensation Report

The 2019 State of Church Compensation Report

Data and statistics about the state of church compensation in the U.S. for 2019.
2019 Church & Clergy Tax Guide

2019 Church & Clergy Tax Guide

Find comprehensive help understanding United States tax laws as they relate to pastors and churches.
12 Law & Tax Guidelines for New Ministers

12 Law & Tax Guidelines for New Ministers

Essential knowledge to ensure legal and financial clarity and integrity in ministry.

ChurchSalary

ChurchSalary

Experience a whole new way to set compensation. Eliminate the guesswork – get access to detailed compensation reports in just minutes.