Churches of God say no to salary request

Courteous rejections

Each of the churches responding did so courteously and gave reasons for declining the request.

J. Edwin Pope, chief financial officer of the Global Church of God, wrote that "it would not be appropriate to reveal confidential salary information of our employees out of deference to their privacy."

The PCG's Pastor General Gerald Flurry wrote that the requested information is "not made available to the public at this time."

Benny L. Sharp, business manager of the CGI, wrote that he would "be glad to present your request for salary information to the board of directors [of the CGI] for their consideration at the next board meeting."

Of the five organizations contacted, only the UCG has provisions in its constitution for providing salary information. Article 10.5 of the UCG bylaws, ratified Dec. 4 by the UCG elders in Cincinnati, Ohio, states: "At each annual meeting of the general conference, the treasurer shall disclose the salary ranges for all paid positions of the corporation."

However, Steven D. Andrews, treasurer of the UCG, said in a March 8 letter to In Transition he "must respectfully decline" the request for compensation information on the 10 highest-paid individuals.

He acknowledged that Article 10.5 of the bylaws "require[s] me to disclose salary ranges for all paid positions of the corporation. The bylaws require such disclosure to be made each year at the general conference.

"Since the manner, method and substance of salary disclosure for the UCG has been established by the general conference of elders, it would be inappropriate, if not unethical, to provide the information you request for publication in In Transition."

In a March 11 phone conversation, Mr. Andrews said salaries were not disclosed at the 1995 general conference because "I guess no one asked."

Mr. Andrews said no salary information will be disclosed until the next general conference.

No date has yet been set for the UCG's next general conference.

Influenced by WCG pay structure

Most of the major offshoots have been significantly influenced by the Worldwide Church of God's compensation structure, since they employ mainly former WCG employees.

Mr. Andrews, for example, said that, while the United Church of God is reviewing its salary structure, the UCG hired former WCG ministers and other employees at their old WCG pay rates.

In Transition learned from former WCG employees that as of the spring of 1995, when the UCG formed, most WCG field ministers' salaries fell within the following ranges:

• Never pastors with less than 10 years' experience were paid salaries in the low- to mid-$30,000 range.
• Pastons with more than 10 years' experience were paid salaries in the high $30,000s to the low $40,000s.
• U.S. regional pastors were paid salaries in the $50,000s.
• Senior international directors were paid salaries in the $70,000s.

Former WCG insiders note that exceptions to the above-stated ranges were not unusual, especially at Pasadena, Calif., headquarters.

They say that, when field ministers were stationed for a time at WCG headquarters, for example, their pay was higher than that of those who served in the U.S. field ministry.

The WCG rarely cut salaries in recent decades, even when elders' job duties were significantly reduced.

So, when former headquarters personnel were sent to serve in diminished responsibilities, they often retained their higher salaries.

The WCG reached these compensation rates in the mid- to late 1980s.

There were no significant across-the-board raises during the decade after Joseph W. Tkach Sr.'s succession as pastor general in 1986 after the death of Herbert W. Armstrong. Mr. Armstrong, as early as the mid-1970s, paid himself a base salary of $200,000.

Mr. Tkach, who died last September, said he was opposed to highly compensated church employees. Some WCG insiders say he preferred to cap evangelist-ranked ministers at $60,000.

However, several headquarters-based evangelists made significantly more than $60,000.

Ranking headquarters ministers also enjoyed extensive perquisites, subsidized housing standing out as the single most valuable category of compensation.

Some of the residences provided to ministers adjacent to the church property in Pasadena, along South Orange Grove Boulevard, have an estimated fair-market rental value of from $3,000 to $5,000 a month. These homes were provided to ministers at no cost or minimal cost.

The highest-ranking managers at WCG headquarters enjoyed free meals during work hours. Extensive travel at church expense further reduced their living costs.

Another perk was Imperial Schools, the private school operated by the WCG, which is scheduled to shut down in two months, at the end of this school year.

Pasadena public schools are not known for their high standards, and many parents who can afford to do so send their children to private schools. Imperial charged only a small fraction of the tuition charged by other private schools in the area.

Tithe advantages

Historically, elders employed by the Worldwide Church of God have enjoyed a financial advantage over other elders and other church members in that they were not required to save a second (festival) tithe.

Elders on the WCG payroll historically were given 9 percent of their base salary as a bonus to cover festival expenses. Instead of a full 10 percent, 1 percent was automatically deducted for what was once called the "tithe of the tithe," used to cover operational expenses for Feast of Tabernacles.

Until recent years, a portion of the 9 percent was paid shortly before the spring Holy Days, the remainder before the fall Holy Days.

In recent years, WCG headquarters changed its policy, adding the 9 percent to each minister's regular salary, from which the elder was expected to provide for his own festival expenses and that of his family. If the elder attended his assigned site, most of his expenses were tax-deductible.

Additionally, elders--paid and unpaid--were not required to pay a third tithe (a tithe collectedly for poor church members, paid two years out of seven). This tithe represents, when annualized over seven years, a 2.86 percent donation.

Social security factor

The vast majority of WCG elders in the United States do not have federal social-security taxes withheld from their pay. This practice of the Worldwide Church of God and other churches is not unusual and complies with the U.S. Internal Revenue Service code.

The IRS, in its publication 517, Social Security and Other Information for Members of the Clergy and Religious Workers, gives the guidelines for ministers in the United States to avoid paying social security.

Most employees in the United States have 7.65 percent of their gross pay withheld for social security. Employers also pay 7.65 percent for each employee, for a total 15.3 percent tax on gross pay.

While those who have not paid social security are not eligible to receive social-security payments at retirement, they do enjoy more discretionary money from each paycheck.

In addition to the short-term benefits of avoiding social-security withholding, in the United States ministers of all religions are permitted a housing allowance.

Income tax factor

Ministers frequently pay less in federal income tax than do comparably compensated lay members. A major portion of the tax advantage comes from sheltering taxable income through a housing allowance.

IRS publication 517 states: "A housing allowance paid to you as part of your salary is not income to the extent you use it, in the year received, to provide a home or to pay utilities for a home you are provided ... Expenses of providing a home include rent, house payments, furniture payments, costs for a garage and utilities."

The IRS publication says ministers who own their own home, or who are buying it, are allowed to "exclude your housing allowance from your income if you spend it for the down payment on the home, for mortgage payments, or for interest, taxes, utilities, repairs, etc."

This IRS provision does not set a specific percentage cap based on a minister's salary; however, the WCG at one time capped the housing allowance at 50 percent of the minister's base pay.

The IRS does state that the clergy cannot "exclude more than the fair rental value of the home [including furnishings] plus the cost of utilities, even if a larger amount is designated as a housing allowance."

A minister who makes $40,000 annually, for example, and who is buying a home could realize a monthly housing allowance of $1,250, including mortgage payment, utilities, property taxes, furniture payments and upkeep. He may legally direct his church employer to reduce the amount of reported income by $15,000, from a $40,000 gross to a taxable base of $25,000.

Additionally, the IRS allows the same minister to deduct his mortgage interest and real-estate taxes paid on the home, further reducing his taxable income.

The fleet program

Until the past year, the WCG provided most ministers in its employ a late-model vehicle. Most elders were part of the WCG's fleet program. In the United States, the minister paid less than $100 per month for his portion of the fleet vehicle, which included the cost of vehicle, gasoline, insurance and all repairs.

In cases where the minister had teenaged drivers, this benefit could be worth as much as $600 a month.

However, the WCG has over the past year virtually eliminated the fleet, opting for a mileage-reimbursement program.

The Church of God International, founded in 1978, is perhaps less influenced by the traditional WCG pay structure than those offshoots formed more recently.

As mentioned earlier in this article, while the CGI declined to provide any salary information, Mr. Sharp offered to present In Transition's request for salary information to the CGI board of directors.

"It has always been the policy of the Church of God International that individual salary information of all employees is confidential," Mr. Sharp wrote in a letter responding to the In Transition request.

"Many times in the past when this issue was discussed, we agreed with the advice of then board member, and at the time vice-president of the Church of God International, Ronald Dart, who stated that an employee was entitled to the right to privacy regarding his salary and benefits."

Mr. Dart, who left the CGI and founded Christian Education Ministries late last year, said Mr. Sharp was correct in his characterization of the advice Mr. Dart gave to the CGI.

"However, I've rethought my historic position on this subject," he said in an March 15 telephone interview. "CEM's bylaws require it to publish all salaries paid by the organization."

In Transition learned that the two highest-paid people in the CGI before Mr. Dart's exit were CGI founder Garner Ted Armstrong and Mr. Dart.

Mr. Sharp declined to provide information about individual salries but In Transition has learned Mr. Armstrong's annual compensation was about 140,000 until recently. He was compensated by both the CGI and the Garner Ted Armstrong Evangelistic Association, which was recently dismantled.

CGI insiders say Mr. Armstrong, after recent turmoil within the organization (In Transition, Dec. 18), is now paid about $110,000 annually.

Mr. Dart reportedly was paid $95,000 annually. However, he declined either to confirm or deny his own CGI compensation or that of Mr. Armstrong.

Mr. Sharp said the CGI has no paid ministers outside the CGI's home office in Tyler, Texas. He said the CGI does not advocate members paying a third tithe and that the church pays the festival expenses of salaried ministers.

Ministerial benefits add up

In Transition asked a certified public accountant, in private practice but with tax experience in a Big Eight accounting firm, to assess the financial impact of the WCG's historic benefits to ministers.

The CPA, who has no current or past affiliation with the WCG or its offshoots, used as an example a church pastor who is paid a base salary of $40,000.

He noted that a dollar saved is worth more than a dollar earned because a dollar earned is subject to tithe and tax and therefore, depending on the tax bracket, can easily be worth as much as $1.20 to $1.50.

The accountant compared a minister's compensation to that of a lay member who paid second and third tithe, had social-security tax withheld and provided his family an automobile in the range of a late-model Dodge Intrepid, which was a common WCG fleet vehicle.

In the CPA's judgment, the lay member would have to earn $60,000 to $70,000 to equal the pay of the minister at $40,000.

Ministers at Pasadena with executive duties would experience higher potential tax exposure. Expensive housing provided them, along with other benefits mentioned earlier, would easily exceed the salary equivalent of $100,000, at which level a lay member living in the same region of the country who did not enjoy similar tax, tithe and other ministerial benefits would have to earn to benefit from a similar standard of living.

In fairness, however, the non-elder is often funding his social security or other forms of retirement and may have superior benefits, particularly in the health-care arena.

Are ministers paid too much?

Most ministers contacted by In Transition said they thought salary ranges should be published and that their organizations should be more forthcoming with financial information. However, they noted that compensation is a touchy subject and that, regardless of what a minister's pay is, some will think it's too high or too low.

One such minister is Melvin Rhodes, a UCG pastor serving the Lansing and Ann Arbor, Mich., congregations. Mr. Rhodes was ordained by the Worldwide Church of God in 1978 and served as a salaried minister with that organization until he affiliated with the UCG in mid-1995.

"I must admit I am a little sensitive to the subject of ministerial pay," Mr. Rhodes said, "partly because of correspondence going around on the subject, some of which smacks of minister-bashing. I see preferring a noncareer ministry, and I am not convinced that is good for the church.

"I also know that many full-time ministers are now into one business or another because they sense the same preference in their areas, that the full-time ministry won't last. Some lay members may hurt themselves in the longer term by going too far in tearing down the full-time ministry. There's a balance there somewhere."

Mr. Rhodes and other ministers said it is not uncommon for a Protestant minister to earn $50,000. Mr. Dart said the pastor of a large Protestant church in East Texas is compensated $150,000 annually, with the full knowledge of the congregation

Ministers' wives: Two for the price of one?

Another factor, former WCG ministers say, is that historically the WCG forbade elders' wives to work outside the home. Even beyond this policy, wives were required to work for the church without pay.

Ministers' spouses, in many cases, were scheduled to visit with their husbands and required to sit in on visits to comply with the policy that elders could not visit a woman alone.

In other words, in a high percentage of cases in the past, the WCG got two employees for the price of one. This policy was gradually relaxed over the past decade.

For many years, the wives of ministers serving church congregations were not allowed to work, although their counterparts at Pasadena were permitted to do so.

However, once field ministers' wives began to work, one effect was that some of their husbands carried an increased load of baby-sitting, transporting children to school and other domestic activities, reducing accordingly the time available to their congregations.

Former WCG ministers are quick to note that their former employer had no policy to reward those who worked harder and were more effective in their jobs. Mr. Rhodes noted that pastors who carried a heavy academic load in their pursuit of a graduate degree or those who were avid racquetball players at the expense of their jobs made essentially the same amount as others who worked 60 to 70 hours a week serving brethren in their congregations.

What are the duties?

"In considering pay you should also address the duties ministers are paid for," the daughter of a long-time elder, who asked not to be identified, said.

"Ministers are on call 24 hours a day, 365 days a year," she said. "They get phone calls at any time, day or night, from anyone. Their personal lives and those of their families suffer. They are subject to moves across the country or even overseas."

She said ministers' children are often moved from school to school, and throughout a minister's career, his assignments often do not allow him to be near children, grandchildren or elderly parents.

"I don't think the WCG ministry was overpaid in general. There were some problems, but overall most of the ministers I know worked hard and deserved the pay they received."