[Note: Several weeks ago I wrote a post about the number of staff persons a congregation should have. See this post at http://bullardjournal.posterous.com/how-many-staff-persons-should-a-congregation. I have since had a request to know how much a congregational budget should be allocated to pay pastor/staff. Here are my thoughts.]
In response to your inquiry about what percentage of a congregation budget ought to be allocated for the direct and indirect costs of the pastor and staff, the short answer is no more than 50 percent. However, the answer is really not that easy. Here are some additional thoughts.
First, the 50 percent rule probably does not start applying until a congregation has around 125 in attendance. Before that size, if they are trying to have a full-time pastor [which perhaps they should not] the percentage of the budget for pastor/staff is going to be higher. Getting down to the 50 percent goal probably does not occur until the congregation reaches 125 in attendance.
Second, the socio-economics of the congregation is a variable in this. Third, the larger the congregation—generally starting at 500 or more in attendance—the more the tendency for the percentage of budget going to pastor/staff to creep above 55 percent of the annual budget. Fourth, this creeping increase will particularly be true in upper middle class congregations with many two income households who want to pay for ministry to be done rather than take time to do it themselves.
The problem with a creeping increase in the percentage of the budget that goes for pastor/staff is that it becomes a fixed cost. When you “marry” it with the fixed cost of facilities, you may have a dangerous economic situation. The total cost of pastor/staff and facilities in the budget should never be more than 70 percent of the budget. If this percentage ever becomes 75 percent then the congregation is severely crippled in their ability to do programs, ministries, activities, and missions beyond the congregational context. If this percentage ever reaches 80 percent the congregation is strangulated in its ability to do its ministry.
I hope this helps you and other who read this. What other questions do you have?