How To Intelligently Provide For Your Director
And Support Staff In Today’s Challenging Times
A wig once said, “Lord, since we know you desire your workers to be humble servants, we will care for their physical needs with this in mind.”
In reality, it is a good thing that no thinking Christian lay person figures that way. Ask yourself these questions, however:
1. Would you be willing to work the hours they work for the pay they receive?
2. Could you support and educate your family on the salary you pay them?
3. Are their salaries keeping par with today’s high cost of living?
4. Considering their education and what similarly educated people earn in
similar secular work, are they being fairly compensated?
5. Could you provide the standard of living you expect of them on the salary and benefits you currently offer?
6. If you had to give an account of your stewardship before God, would you feel that you have treated them fairly and honestly with your expectations for the compensation you give?
Living expenses have risen nearly 20% in the last five years according to the Consumer Price Index. The Department of Labor also reports that most professionals have had between 12 to 21% salary increases in the same period. How are you doing for your minister and staff?
A camp and retreat center that desires to intelligently provide for their director and staff with a fair compensation package should consider salary and benefits for the following areas:
You may want to investigate information concerning a
reimbursement policy for director and staff expenses.
Such a policy treats the director and staff’s expenses as
non-taxable income. This can provide a director and staff
with a reduced tax burden.
1. Operating/Business: Costs should be paid as expenses; that would assist your director and staff to make what you pay them go further.
a. Transportation expense
Travel to seminars, conventions, and etc, as well as taking
individuals of the organization to meetings and such. Auto expenses
could run from $1,000 to $5,000 or more than the average person
connected to the organization. The IRS allows forty-four and one-half cents per mile for (2006). Certainly you should not expect to offer them less.
b. Office expenses
Library books, tech equipment and other items for study and
work with your camp and retreat center.
c. Hospitality and entertainment expenses
Luncheons and entertainment with church officials, missionaries,
and others, in the home or out to eat, etc.
d. Continuing education expenses
Seminars, conventions, formal continuing courses of study that
can help them stay current for the work of your organization, as well
as other formal education that they feel will help them as they
work with you.
2. A realistic take-home salary
a. Note experience
b. Educational backgrounds
c. Suggestion: note salaries of the area's public school teachers and
administrators.
3. Housing allowance: Costs that should be paid expenses that would assist
your pastor and staff to make what you pay them go further. (would you like living in the home you provide them or assist them with owning?)
Many organizations today are no longer providing housing because directors and staff opt for housing allowances instead. This allows them and the staff to exclude the designated housing allowance from taxable income. They are also allowed to claim the interest expenses and property taxes on their schedule for further tax reduction. This provides the opportunity for them to realize home appreciation that can assist if needed when retirement or a move should happen. It also provides the satisfaction of owning a home, an important benefit.
a. Provided housing: is it possible to provide other options?
b. Assist the director with owning a home.
c. A reasonable housing allowance should provide your director
with a home
Utilities: Costs that should be paid expenses that would assist
your director and staff to make what you pay them go further.
Some pay the basic costs, some pay the full costs.
a. Home heating expenses
b. Electric expenses
c. Water and sewer expenses
d. Telecommunications expenses
e. Internet expenses
4. Reasonable vacation opportunities and holidays
Refreshment and family time together. A time to recharge them for
their work and ministry at your camp or retreat. It will help them remain fresh and less burnt out.
5. Security measures and benefits: Costs that should be paid expenses that would assist your director and staff to make what you pay them go further. (We can assist you with these for your director, staff, and their families)
a. Major medical insurance coverage
Consider including other health benefits: dental, vision,
hearing, etc.
b. Disability insurance coverage
To pay when they are laid up and cannot minister
c. Group Life insurance
We can assist you with coverage offers $10,000 to $250,000 with
very little underwriting, a great benefit if a staff member has
a health issue. A big benefit many employees receive with their
employers. The cost is below the normal offering for similar
individual insurance. The IRS does require the premium for
life insurance provided above $50,000 to be shown as taxable
income. The portion below is non-taxable. We will assist with
figures for taxable and non-taxable premium portions.
d. Adequate auto insurance coverage
This would include their auto or provided work auto
e. Home insurance
This would include their personal possessions or home insurance
if they own their home.
f. Coverage for libraries, tech equipment, and other items they use
These are usually excluded from their home insurance as
tools of the profession.
g. Professional liability and other protection
Coverage for them as they work and guide the organization
in general, along with the individuals entrusted to their care.
h. Long Term Care insurance
Coverage for extended periods of time when they and their spouse
are not able to care for themselves
i. Pension and retirement care
What have you done for your director for when they can no longer carry
on the work? Tax deferred annuities allow them to deposit money into a tax-deferred plan from their salary that the organization can also contribute to. We offer specially designed 403b plans with no administration costs or setup costs as other plan would have. These 403b plans have unique opportunities for your staff. For ordained people, there is an opportunity to draw their housing allowance tax free from it after they have retired from working with you at your organization.
j. Embarrassment Fund
A sum of money your organization can provide your director’s spouse and children if they live in provided housing while working with you. Ask yourself, when would you have to ask them to leave to make room for the next director? What would they live on? Where would you put the new director if the family of the former director remains in the provided housing?
k. Key-person insurance.
No director would care to leave their work with your organization
suddenly by death, especially when your organization has accepted a
new building program or other major projects of ministry under
their leadership. When a organization experiences the lost of their
director by death, funds usually decrease, and people seek to deal with the loss in their own and varying ways. Many may leave the organization, leaving those left behind with financial matters that are far too great for them. Others may withhold funds they had given regularly previously as they seek to deal with the loss. From the many organizations we deal with, we have seen many experience some very sad and trying times after such a loss. We offer several products that can and have made a wonderful difference for those who have taken advantage of them to protect themselves in this area.
l. Health and fitness programs :
Consider providing some physical opportunities for personal workouts with consideration for memberships in some area facilities, or provide opportunity at your own location for your director, staff and others. A healthy director and staff will offer a more excellent ministry for your organization that is most cost effective and efficient. Directors and staff as a profession are really careless in this area and need all the encouragement you can give. The number one heath issue they deal with as a profession is depression which is preventable with proper exercise and right relationships in all areas of life.
Let us know were we might be of assistance as you plan and review these important areas that most lay people expect and take for granted from their employer. The average employer offers benefits that are of a value that is near or more than 35% of employee compensation today.
This has not been designed as all inclusive, nor are we in the business of offer accounting or legal advice; this is given as suggestions to provoke thought and action on these issues to go more in depth with your accounting and legal advisors; our expertise are financial planning, risk management, and insurance. We are available to assist you if you feel that assistance is desired.
Dorr R. Phelps, GP, LUTCF, CPIA, CSA, RFP, CFP
Phelps Financial Services, Inc.
659 Park Meadow Rd., Suite H
Westerville, Ohio 43081
Phone 614-899-6000 Fax 614-899-6022
Website: www.phelpsfinancial.com
Email dphelps@phelpsfinancial.com
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