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Assembly Finance Committee Report to the Assembly


We, your committee on Finance, submit the following recommendations to the Annual District Assembly and go on record instructing the local churches to comply with the following:


Funding the Mission

The stewardship of the local church is a very sacred responsibility that requires administration. As part of the denominational organization, each local pastor and church embraces their responsibility of supporting the North Central Ohio District, Mount Vernon Nazarene University and the global church and its missionaries. Just as individuals are instructed in the Word (Malachi 3:8-10) to bring the whole tithe into the storehouse, so should a local church set aside a portion of the tithes and offerings they receive to share with others. Each pastor and congregation should make adequate provision in their yearly budget planning process for their assigned commitment to the district, the university and the general church. The Finance Committee recommends weekly or monthly support.


Each church should remit payment for all funds using the Funding the Mission link, located on the district website, the denominational website This interactive website offers a 'track giving' tab which has been designed to help local churches monitor their progress towards full payment of their allocations as well as several other features that add value.


Each church, in accordance with the formula set out by the global church to shall give at least

                - 5.50% of its income base to the World Evangelism Fund (WEF)

                - 2.25% of its income base to Pensions and Benefits

                - 2.25% of its income base to Mount Vernon Nazarene University

                - 4.65% of its income base to the District Fair Share Fund


This covers all district operations, provides for district ministry support and the three departments (NYI, NMI and NDI)


Notes: Amounts given to WEF and approved mission specials are excluded from the income base and NOT to be included when figuring total income. Church income is any donation received by the church that qualifies as a charitable contribution. All donations that qualify to appear on a charitable contribution receipt are included in church income. This includes all non-cash donations of $5,000 or more.


Pastoral Support

A.            The support of a pastor is a sacred honor and responsibility of the church board. Manual 32.3 states: The church is obligated to support its ministers, who have been called of God, and who, under the direction of the church, have given themselves wholly to the work of the ministry.

B.            As a district, we understand more than 40% of our pastors are considered bi-vocational. As such, we encourage congregations not to demand or even suggest that a person needing to work outside the church to provide for their families commit full time service to the church. Furthermore, any spousal income should have NO bearing in determining financial compensation for the pastor.

C.            Therefore, we suggest each church board designate a committee (be it the Finance or Personnel Committee or a separate stand-alone committee) to oversee the care of the pastoral family(ies) shepherding their congregation.

D.            As part of the process of calling a new pastor, that a compensation agreement detailing the annual salary, benefits and reimbursements be drafted and signed to avoid misunderstanding by either party prior to the beginning of the relationship. Manual 115.4.

                Copies should be sent to the district office and entered into the official church board minutes.

                i. The district has provided a compensation worksheet to assist this process, located on the district website

E.            That annually, the church board review all pastoral staff compensation and adjust in accordance with stated pastoral performance goals for the year and the income of the church. Manual 129.8

                i. When conducting said compensation review, church boards be reminded of the difference between a COLA (cost of living adjustment) and a salary increase. A COLA simply brings a pastoral salary up to last year's level. It is not an increase.

                ii. Employee benefits and reimbursement adjustments are handled differently by the IRS and are not considered salary increases. While appreciated, these adjustments generally have minimal impact on the financial welfare of the pastoral family.

F.            The general church has informative resources that are readily available as well. These may be found at


Compensation Package

Part 1: Cash Salary

Actual cash salary is but one part of a compensation package for a full-time pastor. Provisions for housing, appropriate benefits, plus reimbursements for applicable business and professional expenses, and providing for retirement equal the entire compensation package which are the church's responsibility.


Above all, we are reminded while there is no one definitive source a church board can look at to determine an equitable compensation for their leaders, we urge local church boards to consider the following resources:

                - Our district superintendent

                - The Pensions and Benefits office of the general church which has an annual compensation by size and location report posted under the resource tab

                - Local sources, such as the school board and/or hospital salary scales


Most importantly, the central objective of a church's compensation package should be to allow a pastor to effectively carry out his/her responsibility to the church and to God, both administratively and spiritually while not having to worry about providing for his/her family.

                1. With the recent changes in tax law, it is important to remember each church board should attempt to structure compensation packages to help the pastor minimize their annual tax liability.

                2. All employees, ministerial or lay, must be provided a W-2 each year which reflects cash salary paid as compensation, any bonus or love offering, social security/Medicare tax allowances and taxable fringe benefits.

Compensation Package

Part 2: Housing Allowance

Whether the local church still maintains a parsonage for their pastor(s) or provides rental or mortgage assistance, the federal tax code (Section 107) contains wording that creates a substantial tax benefit to pastors.

In the case of a minister of the gospel, gross income DOES NOT include

        1. the rental value of a home furnished to him/her as part of their compensation OR

        2. the rental allowance paid to him/her as part of their compensation, to the extent used by him/her to rent or provide a home and to the extent such allowance does not exceed the fair rental value of the home, including furnishings and appurtenances such as a garage, plus the utilities and reasonable repair costs.


Bi-vocational ministers may have a housing allowance, but only from their ministerial income. It can however, be up to 100% of that compensation. It cannot exceed it.


Each church board must designate this amount in advance (with official action and recorded in the minutes). It is suggested church boards either make this declaration part of the agenda for the first meeting of each calendar year or make the wording open ended enough upon hire to cover from that point forward.


While excluded from federal income tax, housing allowances must be included for Social Security and Medicare tax purposes (SECA) in those computations. Church treasurers are urged to work with their pastor(s) to ensure compliance with the tax code and reporting.

Additional assistance is available from the district finance team and the general church Pensions and Benefits website

Compensation Package

Part 3: Benefits

Self-Employment Tax:  (SECA) Most laity do not realize the Social Security rules for pastors are different and each pastor must pay this tax. It is currently 15.3% of reported cash income. Each church should budget for this amount when determining pastoral compensation.

Retirement:                     Supporting pastors in retirement requires planning and saving, just like it does for laity. Whether churches use the Nazarene 403(b) retirement savings plan or work with their pastor(s) on an individualized plan, a designated amount should be set aside monthly as part of their compensation. Designated amounts can be sheltered from income tax.

Health Insurance:          No pastoral family should serve without health (including dental) insurance coverage. With the passage of the Affordable Care Act back in 2010, those who cannot find an available and applicable group policy, may purchase insurance through government supported plans. The enrollment period is in the fall of each year.

In the case of a bi-vocational pastor or a pastor whose spouse has an insurance option available, the church board should work to provide either the monthly premium or applicable spousal contribution amount.

Life and Disability:          If possible, policies are available at relatively low cost and should be considered as part of a compensation package. It is far better to plan ahead rather than have to face the issue of what to do if a pastor passes away or is disabled and unable to serve for an extended period of time.

Death Benefit:                 The district provides a $10,000 benefit to the designated beneficiary on file at the district office for any district lead pastor who passes while serving in that role. Please contact the district office for further details and beneficiary form.

Education:                         The Nazarene church has long supported the educational aspirations of their pastors. Indeed, the creation of our Nazarene colleges and universities across the world have benefited our local congregations throughout the years. However, many pastors have significant educational debt and church boards should work to assist in the repayment of that debt AND/OR expenses should the pastor(s) wish to gain further education.

Vacation:                           Each local church should provide for annual time away for their pastor(s). Our district recommendation is based on years of ministerial service:

1-5 years in the ministry 2 weeks (including 2 Sundays)

6-10 years in the ministry 3 weeks (including 3 Sundays)

10-15 years in the ministry 4 weeks (including 4 Sundays)

 over 15 years in the ministry 5 weeks (including 5 Sundays)

That any pulpit supply be remunerated by the church.

Furthermore, that each church should remember the pastor(s) and their family(ies) at Christmas with at least an additional week's salary.

Sabbatical:                        Each church should establish a policy to respond to the need of pastors for withdrawal from the day-to-day rigors of an assignment for scholarly review and personal renewal. This policy should be planned for and included in the annual budgeting process.
Within the seventh year of a ministry assignment, the pastor, be they serving in a senior pastorate or staff position, should develop and plan for his/her reflection and renewal for a period of time up to seven weeks and present the plan to their church board and the District Superintendent. A follow-up with 'lessons learned' should also be presented to both the local church board and the District Superintendent.

Maternity/Paternity:    A maternity leave of six weeks and/or a paternity leave of two weeks is recommended upon the birth, adoption, or assumption of legal guardianship of a child. We recommend an additional two weeks be granted for a birth by Cesarean section or other birthing complication(s). We recommend pastors receive their full salary and benefits while on such leave. Should a church have either a long term or temporary disability plan that could be utilized in such a situation, we recommend that such a plan be used to offset the pastor’s salary and benefits provided by the church during the maternity and/or paternity leave.


Compensation Package

Part 4:  Business and Professional Reimbursements

With the 2017 tax reform, it behooves a pastor and church board to examine their reimbursement agreements. Unless a structure is set up to reimburse the pastor (upon receiving receipts within thirty (30) days and/or detailed documentation as to use, that money MUST be added to the annual W-2 as TAXABLE income to the pastor. The District Finance Committee recommends that each church board formally adopt and record a reimbursement policy to include:

  • provisions for ministry use of an automobile (mileage at IRS standards)

  • If a church provides a vehicle, the pastor must keep track (with detailed odometer readings) of miles used for personal use which includes driving to and from the church from home.

  • business related entertainment

  • professional books and magazines

  • professional membership dues

  • stationary and stamps for ministry use

  • cell phone

  • educational expenses: to include seminars for ongoing learning (see benefits)

Many of these expenses should be included in your annual budgeting process.

Furthermore, it is recommended each church budget for and pay all expenses for

  • the pastoral family to attend district meetings such as district assembly, district family camp, district gatherings, pastor and spouses’ retreats.

  • if at all possible, to allow the pastor (and family) to attend the General Assembly by providing for their expenses. Since this global church event is held once every four years, the church board is advised to set aside an amount in their annual budgets to offset these expenses. Time spent attending assemblies or gatherings should NOT be considered part of a pastor's vacation time.

The district has a compensation worksheet available on the district website It is strongly advised each church board annually use this form which then should be forwarded to the district superintendent each year.


Local Church Procedures

A.            That a committee of two or more non-related individuals shall count and record all money received by the church. (Manual 129.22)

B.            That the church board arrange for an annual financial review of the treasurer's books and that each church that operates a daycare, elementary or secondary school additionally forward said financial review to the district superintendent within sixty (60) days of the close of the statistical year. (Manual 129.23)

C.            That the treasurer's book be open at all times to the pastor and the district superintendent or their designate.

D.            In no case should a person serve as treasurer of a local church who is not willing to conform to the position(s) of the Manual.

E.            All elected or appointed church officials, with the exemption of the pastor(s), shall serve without remuneration.

F.            That when payment of funds has been approved by the church board, that such payment should be made as expediently as possible and for the purpose(s) designated.

G.           In the handling of all funds for future expansion and development that such funds be deposited in a separate account and that no withdrawals be made without two signatures.

H.            Each church shall implement a proper screening process for both volunteer and employed persons who work with children and teens as it pertains to sexual and physical abuse (Manual 129.30) including budgeting for appropriate background checks. We further recommend that insurance programs be reviewed periodically in this area.

I.             When calling an evangelist to conduct a meeting at a local church: that their remuneration be twice the weekly salary of the senior pastor, plus SECA expense and one way travel.

J.             That in the annual budgeting process, a goal of at least 10 percent of all money received be paid to the World Evangelism Fund (WEF) and approved specials with priority being giving to WEF.

K.            That the local church financially supports any student attending Mount Vernon Nazarene University with a minimum scholarship of $1,000.


District Policies and Procedures

A.    It is the local church's responsibility to budget for and pay all general, district and university allocations. Manual 130. The District Advisory Board will appoint a committee to assist any church unable to pay their annual budgets with setting a balanced budget for the upcoming district year.

B.    When a local church has not paid budgets in full for two (2) consecutive years or has not had at least one (1) conversion by profession of faith, no member of that church's congregation may be entered into nomination for an elected district office/board position. (District Advisory Board 8/2018)

C.    The District Advisory Board has adopted criteria for potentially closing a church per Manual 106. When 3 of the 4 criteria for consideration are present for two years, the church will be considered for closure at the first DAB meeting of the following assembly year. (District Advisory Board 10/2018)

D.    No congregation may undertake a building expansion and/or remodeling project that exceed 10% of the annual amount raised for all purposes until such proposed expenditures are approved by the District Church Properties Board Manual 234

E.    A district allocation exemption will be made available to congregations conducting a capital stewardship campaign which has been approved by the District Properties Board. To qualify, a project must equal or exceed the annual income of the church. The exemption will extend for three years and will only apply to giving designated for the approved project.

F.    Any district church or compassionate ministry receiving district support shall apply annually for renewal. Applications are due August 1st of each year with decisions being made to fund at the August District Advisory Board meeting. Successful applicants shall make a report to the following assembly.

G.   Pastors and church boards are reminded that before hiring pastoral staff members and/or during the annual rehiring process, approval of the district superintendent must be obtained Manual 129.2

H.    When there is a pastoral change at a district church, the District Finance Committee will appoint a representative to conduct a review of the church's financial records, policies and procedures and present a report to the District Superintendent and the District Advisory Board prior to the calling of a new pastor. (District Advisory Board 11/2019)

I.     If a district ministry department (NMI, NDI or NYI) should for any reason over spend it's budget in one district year, that same amount will be reduced from the next budget cycle. (District Advisory Board 3/2018)

J.     Any district sponsored group travel shall be coordinated through the approved travel agency on file at the district office. No individual arrangements are to be made. (District Advisory Board 8.18)

K.    In the event of a merger between two churches, a property transference agreement should be completed, and a copy submitted to the district office. (District Advisory Board 10/2019)

L.     Per IRS regulations, any self-employed individual or an unincorporated business receiving $600 or more from a church or ministry during the calendar year must receive a Form 1099-MISC showing the compensation amount.

M.  As part of his/her yearly responsibilities, the District Treasurer will contract with an accredited accounting firm to conduct a certified financial review of the district's finances for that year. Said review will be completed prior to and included in the printed assembly journal.

N.   We recommend each church utilize the Church of the Nazarene Foundation to facilitate planned and deferred gifts from their members to any Nazarene ministry, including gifts to the local church, and to use the foundation to manage investment accounts, endowments or charitable trusts. Information can be found at or by calling 866-273-2549.

O.   The Assembly Finance Committee Secretary shall be authorized to edit the Assembly Finance Committee Report as needed and appropriate.


IV. Finances

A.        That a sub-committee of the Finance Committee be charged with creating a yearly budget to be presented to the full committee for their review and recommendation to the District Advisory Board.

B.        That the Advisory Board be authorized, in their discretion, to make proper adjustment in the event of an inequity in the application of the Pensions and Benefits Fund for a deceased minister's family if the local church has not paid their budgets in full.

C.        That the Fair Share district budget as recommended by the district Finance Committee and approved by the District Advisory Board is 4.65%.


V. Education

A.           That each church on the district welcome representatives from Mount Vernon Nazarene University. We urge our churches to cooperate fully in supporting our Nazarene educational institutions, including Nazarene Theological Seminary and Nazarene Bible College by receiving a generous annual offering. We also urge our church attendees to support Mount Vernon Nazarene University by participating in their employer's matching fund program. (For church's reporting purposes, the personal contribution portion may be applied to the assigned educational budget of the local church but NOT the matching fund portion.)

B.           That the pastor's continuing education is important. The district has set aside funds to assist pastors who desire to pursue advanced degrees. A set amount will be placed in the yearly budget and distributed until depleted. Applications will be due by June 15th for the following Fall semester and grants awarded following the August District Advisory Board meeting.

C.           It is our desire to help build up a new generation of top talent for the district and the church in general. The district has adopted a policy for supporting such calls. Based on the model of investing in an individual's promise in return for a prescribed period of working to repay the investment, the district will identify such worthy individuals upon a pastor or professor's recommendation and application process. (District Advisory Board 8/2020)

D.           Per agreement with Mount Vernon Nazarene University, all funds given over 85% of the University's allocation in any given year will be directed to the district's endowed scholarships housed within the university's endowment.

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