Compensation

COMPENSATION PHILOSOPHY

The most common response to the question… “How would you define your compensation philosophy” would be a shrug of the shoulders and a “We have just been tweaking the system that has been in place for 40 years.”  When asked if they have based their system on a “Needs-Based” Philosophy, we get yet another shoulder shrug.  Many of the unusual characteristics of most missionary compensation systems is based on a philosophy that the mission does not understand, and indeed could not support other than to say that… “Everyone is doing it.”  This needed awareness is most often absent, and is largely neglected  The following considerations should be incorporated into EVERY agency’s practices.

COMPENSATION CONTRASTS MAY BE SEEN AS NEED VS. GREED VS. DEED

That descriptive title probably needs no explanation.

NOTE:  This is not legal advice.  We are not attorneys.  Misuse of this information can place an agency at risk.  Before basing your procedures on this information, consult with ACMin and/or your attorney.  

Many agencies presently, or in the past have:

• Allowed fundraising for a personal car?
• Set salaries, based in part on family size?
• Paid a single less than a couple for the same job?
• Paid one spouse, but expected ministry from both?
• Allowed salary increase for college loan payments?
Is this something Walmart could get away with? Then why can we?

Answer: Needs-Based Compensation

IS THERE A LEGAL BASIS FOR THIS… “NEEDS BASED COMPENSATION?”

In the few cases addressing the issue, courts have concluded that because ministers are the “lifeblood” of the church, any state interference in the relationship would violate the religion clauses of the First Amendment. That proposition was first articulated by the Fifth Circuit in McClure v Salvation Army.**

The minister is the chief instrument by which the church seeks to fulfill its purpose. Matters touching this relationship must necessarily be recognized as of prime ecclesiastical concern.  (From EEOC website)

What is that saying?

  1. Ministers were held to be exempt from US labor laws as they relate to minimum wage, overtime, etc…
  2. Religion driven conscience is the basis for the Social Security exemption for ministers.
  3. For the ‘state’ to define rules for minister’s compensation would be to interfere in the free exercise of religion.

So, can we totally disregard labor laws in the treatment of our missionary ministers?

“Totally” is a bit strong.  But, it seems to be largely so, if we have a ministry reason.  But be careful – and DOCUMENT.

If this is done wrong, we are very vulnerable to challenge.

HOW DO (OR SHOULD) VARIOUS ELEMENTS OF COMPENSATION FIT INTO A NEEDS-BASED SYSTEM?

Elements Such As:

  • Family size
  • Assistance with college debt
  • Special needs children
  • Longevity increases
  • Responsibility increases
  • Education allowance

In order to minimize the risk of successful challenge, and to better communicate compensation to donors, a good understanding of these factors is needed, and practices MUST agree with documented policies.

SOME DESIRABLE SPINOFF…  (NOT A LEGAL OPINION – ACMIN’S STUDIED THOUGHTS)

  1. Since salaries are set at subsistence levels, and not designed to allow provision for unexpected emergencies, reasonable funding can often be made available to meet those excess needs, if and when they occur.
  2. If “needs” are covered by outside income sources, salary can sometimes be reduced accordingly.
  3. Need is a subjective term.  It varies from case-to-case and can be packaged in “creative” ways.
  4. In a missions context, need is probably easier to determine than results are to measure.

SOME CAUTIONS TO CONSIDER:

AVOID FOCUSED FUNDRAISING FOR PERSONAL NEED ITEMS:

  1. Avoid missionary statements to donors like, “I need $$$$ for my children’s schooling.”
  2. What is the intent of the donor?  To support the individual or the mission?  Be careful with this.
  3. Never just send all to the missionary that comes in.  Can lead to an appearance of being a conduit.

SALARIES ARE TO BE SET THROUGH A BUDGETARY PROCESS.

  • Don’t allow the missionary to set his own his salary.
  • Must be done at an administrative level and must be kept reasonable.
  • Avoid suggestions of incentives, based on performance.

CRITICAL POINTS TO KEEP IN FOCUS:

ALWAYS go through the process of calculating the default compensation package.

NEVER do a “needs” adjustment, based on employee’s inability to raise funds.

If reductions are indicated, give three options:

  1. Find ways to trim your budget, based on ‘need.”
  2. Give up and find another line of work.
  3. Raise more money.

Insist missionaries talk to you about what their needs really are.

Provide periodic windows to revisit need factor.

As you can see, these are very complex issues.  As such it is probably one of the most neglected areas in missions administration.  Call us at 417-861-9897 or email jburgess@consultingministry.com