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Why Budget Influences Church Salaries More Than Attendance

Generating a budget-only report will increase the sample size and accuracy of your salary reports.
Why Budget Influences Church Salaries More Than Attendance
Image: Getty | Wong Yu Liang & Midnight Studio

One of ChurchSalary’s most powerful features is the ability to generate “budget-only reports.” Budget-only reports are not only more precise, they also increase your sample sizes by 2-4 times.

Why are budget-only reports so powerful? And why would you ignore church attendance as a criterion when analyzing compensation?

Two Main Reasons

There are a host of reasons why budget is the most powerful predictor of compensation for pastors and church staff, but let’s focus on the two main reasons.

Reason #1: Total Budget = Attendance x Giving

First, every church budget is driven primarily by giving. And the amount of total giving at your church is driven directly by the size or attendance of your church. Churches with more people have larger total operating budgets and churches with fewer people have smaller total operating budgets. Learn more about how this relationship works and the average level of what we call per person giving in our Church Growth Series.

As a result, when you filter churches based on budget you are simultaneously filtering them based on attendance. And because giving is directly driven by the incomes of the people in your congregation, there are very consistent patterns to how much money each person or family can (and will) give.

This means that, much like the human body, there are only so many shapes a church can take before its proportions start to look … odd. Like the ratio of height to width in humans, the ratio of people to resources (or size to budget) in a church trends toward an equilibrium.

This equilibrium creates a valley (or main current) of church growth. Extremely thin (e.g., 1,000 people/$50,000 budget) and extremely thick churches (e.g., 50 people/$5 million budget) are virtually impossible. Less extreme budget & size combinations are possible, albeit rare. Since climbing outside of this valley (or swimming outside the mainstream) is hard, these congregations are statistical outliers.

The main current in this river of church growth—i.e., 50% of churches—falls between $1,838 and $3,529 with a median or midpoint of $2,553 per person.

Reason #2: Larger Churches Have More Money

The second reason why budget is such a strong predictor seems almost too straightfoward and simple—larger churches pay higher wages because they (a) have more money in their budget, (b) have more flexibility in how much they pay, and (c) have more elevated hiring standards.

From an organizational standpoint, because of their increased complexity, larger churches often need to hire employees who have more experience, are more talented or capable, and/or who have higher levels of education and training. These employees are generally more rare and more in demand—which makes them “cost more.”

This means that filtering for larger church budgets is a roughy way to also filter for employees that have higher levels of experience, talent, and education.

Please understand, we are not saying that everyone who serves at a smaller church is less qualified, less educated, or less capable as a pastor or staff member. Far from it! This is simply a function of the law of averages. On average candidates that are more ambitious and who want to advance in their career as a pastor seek out larger churches that offer more responsibility and pay more money. These pastors and church staff try and “climb the church corporate ladder” by getting a job at a larger church (or growing the church where they currently work).

These are simply market trends operating at a macro-economic level. The hiring process itself, repeated over and over again across hundreds of thousands of churches, means that the larger a church is the more likely they are to require higher education levels or seminary training or to require higher levels of experience. Repeat these trends over and over and you get a clear correlation of higher pay and higher total church budget.

How is a Budget-Only Report Better?
The Unforgiving Math

The more criteria we use to filter the 32,000+ employees in our database, the smaller the sample size will become. This is basic math. Even though 32,000 is a massive dataset of employees, once you filter by 18 positions, 2 employment statuses (FT/PT), and 10 church budget ranges the dataset can theoretically get divided by a factor of 360.

The math looks like this+(naively assuming that all positions are distributed evenly between all criteria):

  • 18 x 2 x 10 = 360 bins
  • 32,000 ÷ 360 = 89 employees

That’s right, sorting for only three criteria in a massive database of 32,000+ employees can theoretically+(if employees are distributed evenly between all criteria) decrease the sample size to only 89 employees! If you further sort based on 10 attendance ranges things can start to get dicey real quick!

  • 18 x 2 x 10 x 10 = 3,600 bins
  • 32,000 ÷ 3,600 = 9 employees

In reality, this isn’t exactly how things work. Budget and attendance are so closely tied together because of per person giving trends that they overlap a great deal in the real world. For example, sampling for $250-500K churches means you are effectively sampling for churches with 101-200 people.

Still, the math underlying this filtering process remains the same. The more criteria you filter for the smaller your sample size will get. But how much smaller?

The Distribution of Churches

The chart below visualizes the distribution of churches within the ChurchSalary database as of May 2024. These 19,000+ churches follow the “river of church growth” based on their per person giving. As such, even though there are theoretically 100 possible budget and attendance combinations, 92% of all churches fit into only 32 budget/attendance combos.

We can actually take this a step further and estimate the sample size increase your church could expect if you run ignore attendance and run a budget-only report.

How to Use Budget-Only Reports

Drawing on more data almost always yields more accurate results. Churches frequently contact us and ask how many churches or how many employees fit into their budget and attendance category. One of the main reasons why you may see a lot of dashes in your Salary Comparison section is a low sample size. Try discarding attendance as a criteria and see what happens to the data in your report.

Finally, if your church falls into one of the wider budget categories ($1M–$2M, $2M–3M, $3M–$5M, $5M+) consider producing two sets of contrasting reports: budget-only and budget & size. The difference between these reports, as well as the distribution graphs in the Nationwide Salary Summary sections, can help you determine where your church fits within this large budget category. For example, the finances of 1,000–2,000 person church with a budget of $3 to $5 million may have more in common with the average 2,000–3,000 person church. Being able to compare and contrast reports in this way can help clarify where your church fits in the valley (or current) of church growth—and where your salaries should fit as well.

Start generating budget-only reports now!

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Lilly Endowment

ChurchSalary is made possible through funding from the Lilly Endowment Inc. As part of Lilly's "National Initiative to Address Economic Challenges Facing Pastoral Leaders," ChurchSalary—and our parent, Church Law & Tax—is committed to helping church leaders and pastors develop an atmosphere of healthy financial stewardship, especially in the area of church staff compensation.