Just Released: 2023 Annual Report // Read Now

Just Released: 2023 Annual Report // Read Now

With high inflation rates and cost of living increases, an appropriate Cost of Living Adjustment (COLA) for your ministry workers is more important than ever..

Inflation and Historically Rising Cost of Living

The evidence is everywhere. From the grocery store to the gas station; from hotels to airline tickets to rental cars; from home energy bills to the price of a used car – the costs of basic needs and activities have risen dramatically. If your finances have felt tighter than usual, it’s not just you. It feels like everything is more expensive. And that’s because, for the most part, it is. On October 13, the US Dept. of Labor reported that the annual rate of inflation for the US had reached 8.2%, the highest in 40 years.[1] This historic level of inflation is driven by a similar increase in the cost of consumer goods and services. In short, the “cost of living” – the amount of money needed to cover basic expenses such as housing, food, and healthcare in a certain place and time – has risen to levels not seen since the early 1980’s.

Pastors and Ministry Workers Hard Hit

Most of us don’t need government data to tell us this is happening. We know it from personal experience, and we feel it every month as we try to balance our budgets and prioritize our spending. Most pastors and their families feel it acutely. Of course, inflation affects everyone. But it hits lower income households especially hard. And pastors are historically underpaid, especially when compared to others with similar levels of education. Across the US, Clergy rank in the top 10% of the population in terms of education. However, they are in the bottom 25% (325th of 432 occupations) in terms of salary. All this means that most clergy and ministry workers suffer the effects of high inflation disproportionally. And when that happens, many are forced to spend their savings or incur credit card debt.

The Church’s Responsibility to Pastors

Financial health is a key aspect of overall clergy wellbeing. Pastors without sufficient resources are at much higher risk for problems such as depression, anxiety, physical illness, and burnout. For this reason, when Presbyterian Church in America (PCA) churches call pastors, our polity requires them to promise an income sufficient to free the pastor from “worldly cares and avocations.” This means churches should strive to pay their pastors a salary sufficient to live in the area where they are called to minister. It also means the pastor’s salary should continue to reflect the economic realities of the community as time goes by. Caring for their pastors in this way enables pastors to focus their energies on the challenging work of local church ministry.

One way churches can help their ministry staff stay financially healthy is by providing regular cost of living adjustments (COLA) to their salaries. COLA are salary increases intended to offset the effects of inflation. They are unrelated to job performance and independent from any merit increases employees might earn. In recent years, COLA have been in the range of 2%-4%, depending on the year. However, this year, inflation is historically high, and the real cost of basic necessities has increased significantly. For this reason, churches should prepare now to provide COLA that account for inflation and the real cost of living increases in the communities where their pastors and ministry workers live and serve.

Acknowledging Difficulties

The prospect of a higher than usual COLA may feel daunting. Most PCA churches are small and have limited resources. And all churches depend on donations to fund their ministry activities and staff salaries. Nevertheless, churches owe their pastors and ministry staff a good faith effort to keep salaries in step with rising inflation. Geneva’s Call Package Guidelines clearly recommend this practice:

If an annual review of a minister’s compensation is not done, then inflation will erode the purchasing power of his compensation over time. All too often a minister and his family will suffer in silence and begin to accumulate debt. With such a burden hanging over his head, it is hard to imagine a minister in this circumstance experiencing maximum effectiveness in his labors.

This is wise guidance. In Geneva’s research into the wellbeing of PCA pastors, we learned just how hard it is for pastors to advocate for their own salaries. One pastor in one of our focus groups articulated the challenge:

I initiate very few conversations about my personal call package. I feel very ill-equipped and hesitant to ever bring up a raise. I’m not good at this, and I need someone to help me. – PCA Pastor

Another gave voice to the reason for the difficulty:

It’s hard to be a senior pastor in this regard, because you generally are advocating for good salary and benefits for your staff. And there’s no one that does that for you … there’s no one to advocate for the senior pastor. And that’s kind of one of the most awkward session meetings of the year when you leave the room, and they discuss your salary. And no one’s asked you “how are you doing financially? Are we paying you enough?” You have to speak up and advocate for yourself and that’s a lonely position. – PCA Pastor

In short, as hard as it may be for churches to grant appropriately generous COLA, it is harder for pastors to advocate for themselves. Without help, they will almost certainly languish quietly as their salaries lag behind inflation. And when churches let that happen, they functionally cut the pay of their pastors and ministry staff.

A Way Forward: Cost of Living Adjustments (COLA)

Given these difficulties, how should churches address this important issue? As a start, church leaders must candidly acknowledge how hard it is for pastors to champion their own salaries and take the lead in doing it for them. They should also consider ministry priorities as they allocate limited budget resources. Again, Geneva’s Call Package Guidelines offer a helpful perspective:

Given the PCA’s high biblical priority on the preaching of the Word and the administration of the sacraments, all churches must give high priority to this portion of the budget

This means that given the choice between fairly compensating ministry staff and other priorities such as starting a new ministry or making improvements to the building, “choosing to support the preaching of the Word is the right choice.”

Recently, churches across the country have wrestled with these competing priorities. One large church administrator stated that his church calculated the COLA for 2023 using an average of the SSI increase and the consumer price index for the community where the church is located. This is a wise use of national and local data. Another described a creative COLA that is staged in mid-year:

[Church name] gave a 3% COLA plus a 3% bonus in March, and our ministry plan for 2023 includes a 4.5% COLA.

Small churches are also working to ensure their pastors are paid appropriately. One ruling elder described his west coast church’s approach of accounting for recent inflation when creating a new pastor’s initial compensation package:

When we hired our new pastor mid-year, we wanted to make sure we paid him enough to live in our very expensive community. Geneva helped us design a compensation package that increased both salary and benefits in light of the unusually high current rates of inflation. It was a stretch for our church, but God has always provided for us, and we were willing to make that stretch to care for our pastor and his family.


Given the reality that inflation is soaring, we recommend churches take a close look at the salaries of pastors and ministry staff to ensure that ministry workers are being fairly paid. Factors such as the local rate of inflation, your own knowledge of what it costs to live in your community, and an honest conversation with your employees about their finances will help you arrive at a reasonable and fair COLA. At Geneva, we know these are challenging decisions to make, and we are here to help. We offer free call package consulting for pastors and church sessions. Click here to schedule a consultation.

[1] This is the national rate of inflation. Rates in various communities will vary. For instance, the rate of inflation for the Atlanta area where Geneva Benefits Group is located exceeds 11%.


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