Listen on Apple Podcasts, Spotify, Buzzsprout, online, or search ‘The Stewardology Podcast’ in your favorite podcast app.

 

In this special episode, we dive into your submitted questions about church finance! From tax status concerns to budgeting, pastoral salaries, and transparency, we’re covering it all with biblical wisdom and practical advice.

1. Is the Threat of “Churches Losing Their Tax Status” Legit?

Short Answer: Yes, it’s a real threat, but it shouldn’t scare the church.

What Could Happen if Churches Lose Tax-Exempt Status:

  • Giving may drop…if people are only giving for tax deductions.
  • However, Scripture teaches us to give out of gratitude—not for tax breaks.
    (See 2 Corinthians—written with zero tax incentives!)

Why This Threat Exists:

Many people argue churches wield too much influence and want to remove tax-exempt status as a way to reduce their power.

A Key Reminder:

  • Churches shouldn’t compromise truth out of fear of losing tax status.
  • The church has authority on moral issues and must be willing to speak boldly, even into cultural and political topics.
  • Trust God, do the right thing.

Pro Tip:

Most churches don’t even need to file for 501(c)(3) status! Many states allow tax-deductible donations without going through the federal nonprofit process. Some churches apply anyway to access grants, but that comes with risks.

2. Is There an “Ideal” Church Budget? Any Red Flags?

Answer: With church finance, there’s no “One-Size-Fits-All” budget. Every church is different. But here’s what to watch for in the realm of church finances:

  • Facilities: Rent or building ownership significantly impacts your budget.
  • Watch for rising facility costs, don’t let your building become a financial burden.
  • Staffing: Ideally, pastoral salaries should be 50% or less of the budget.
    • It used to be 35%, but today 50%–60% is more common.
    • Exception: Church plants may allocate up to 80% for pastoral salary during early growth stages.

Watch for These Budget Red Flags:

  • Vanity projects: spending big just to elevate the church’s or pastor’s image.
  • Excessive focus on building opulence at the expense of ministry.
  • Neglecting to maintain a safe, beautiful, and functional building.
  • No funding for evangelism or discipleship. That’s a major red flag!
    Your church should be about outreach, not just comfort.

(Bonus Red Flag: Skimping on communion bread…don’t go too cheap!)

3. Should Churches Consider Bivocational Pastors?

Answer: Sometimes, Yes—But It Depends.

  • Context matters. In areas without enough giving to fully support a pastor, bivocational models may be necessary. However, Acts 6 reminds us that the ideal is for pastors to focus on preaching and prayer, with deacons handling other tasks.

Key Thought:

Funding a pastor full-time brings spiritual benefits to the whole church. If your church needs bivocational pastors, ask why:

  • Is giving too low?
  • Is the church prioritizing funds correctly?

Our hope: Every church would be fully funded for the Gospel—including its pastor!

4. How Should Churches Set Pastor Salaries and Benefits?

One of the best practices we’ve seen: Benchmark salaries against local school districts. Compare based on education and experience. This helps ensure a fair, livable wage with appropriate benefits.

5. What Are Best Practices for Transparency with Church Finance?

Yes, Transparency Matters—But Use Wisdom. Churches should be transparent about income and expenses, but maybe not down to every penny. It’s not healthy (or helpful) to broadcast individual staff salaries publicly.

Good Practices:

  • Group salaries together (e.g., “pastoral staff compensation” as one line).
  • Lump similar expenses for clarity without exposing private details.
  • If individuals have questions, answer them directly.

Perspective:

  • Transparency isn’t just about salaries—it’s about the church’s overall financial health.
  • In some cases, seeing salaries can be encouraging (i.e., “That’s all we pay these hardworking pastors?”).
  • Other times, high salaries may raise concerns—but the goal is fairness and honesty.

Final Thought:

Church finances are ultimately about stewardship and mission, not just dollars and cents. Whether it’s budgets, salaries, or tax status, the goal remains the same: Glorify God and advance the Gospel.

 

Next Steps

 

Material presented is property of The Stewardology Podcast, a ministry of Life Financial Group and Life Institute. You may not copy, reproduce, modify, create derivative works, or exploit any content without the expressed written permission of The Stewardology Podcast. For more information, contact us at Contact@StewardologyPodcast.com or (800) 688-5800.

The topics discussed in this podcast are for general information only and are not intended to provide specific investment advice or recommendations.  Investing and investment strategies involve risk including the potential loss of principal. Past performance is not a guarantee of future results.

Securities and advisory services offered through GWM, Inc Member FINRA/SIPC