Transparency, Limitation, Accountability

The credibility, dignity, trust and effectiveness of the future episcopacy rests with reformation which brings transparency, limitation and accountability to the matter of episcopal compensation. The goal is not to make bishops poor. It is to reclaim the office as a calling rather than a lottery prize winning. There are a few basic steps which may get us there. Admittedly, I have been turning ideas on this subject for quite a few years. Sharing strategies with friends, I realized there is no neat solution…certainly none to which a majority of bishops would subscribe. If there are better ideas, please comment. Even if imperfect, WE MUST DO SOMETHING! The 1956 reforms failed. Some bishops rejected moderation in favor of choking life out of the goose which yielded the golden eggs. It is time for change.

Transparency. The process and sum of compensation must be clear, visible, and the result of general consensus. No more winking and grinning. Whether it be by way of offerings, fundraisers, or budgeted assessments, we must stop camouflaging compensation. Moreover, it should not be “as much as I can get,” or “whatever is left after expenses.” Meetings should be planned, budgeted and administered with a projected outcome which is reasonable, broadly known, and generally accepted.

Limited. Some bishops (and PEs/pastors) dread the idea of separating their compensation from “offerings.” Some pastors have gotten in on this regressive notion with a misappropriation of the practice of “class dues.” The very act of an “offering” represents a process without limit. In order to reveal and limit episcopal compensation, it must be funneled to a central point. In practical terms, all annual conference “gifts,” honoraria received from meetings, churches, or components must be paid to a single point. Even Christmas, birthday, and other seemingly personal gifts of love must be deposited to a common account. (The IRS says all of those gifts are taxable when coming from those whom bishops supervise–look it up!)

Once income is sent through a common point, it can be documented and limited. While a bishop who currently presides over a small district (1-13) may realize $75-100k of income above the church budgeted $63k, the average bishop is receiving $150k-$250k of additional compensation. Those who know, don’t tell. The rest of us make “experienced” guesses. The best paid bishops receive from $350k to a sum no one can number.

Where do we draw the line and establish the limit? That is a struggle. Too high, and we will miss the point. Too low, and there is no chance of implementation. The correct figure is somewhere between $350k and $500k. The rationale. Major pastors of other denominations in New York City (for example) are known to receive packages of $425-450k. National religious leaders of nonprofits have documented salaries of $400k or so. Psychologically, anything above $500k would be frowned upon both within and from outside the denomination. The standard is not to reach par with the multi-million dollar per year mega, media preachers. If our bishops want that kind of money, because they command such gifts and appeal, they should resign their office and take to the airways/revival circuits.

Accountability. Bishops should receive 1099s/W-2s for all of their official income. This is possible and verifiable by directing all income through a single point. The people will know the extent of their generosity. The environment of service will change. Attitudes should improve. We will shatter the image that leadership takes everything. We can heal the blemish. We can rise above the distraction to engage in more excellent service.

An Example of how it would work: 1. You establish an Episcopal Compensation Account. 2. Annual Conference, meeting, event “gifts” are paid by check/electronic transfer into the account. 3. If the bishop preaches at a church (in district), or appears at a function where there is an honorarium, the funds are paid by check/transfer to the fund. 4. Christmas, birthday and personal milestone celebratory gifts from persons in the district (IRS essentially says these are more obligatory than love) are deposited to the Account. 5. Disbursements from the account to the bishop are by check/transfer with proper tax accounting. 6. Funds received which exceed the established ceiling are diverted to the Episcopal District to cover the costs of housing, travel, and benevolence on behalf of the bishop. 7. Any remaining funds above the limit revert to the Episcopal District for projects/programming.

I may add some comments on other models considered. This one, though, could be the most easily implemented and transparent. Let’s talk about it!

3 thoughts on “Transparency, Limitation, Accountability

  1. My God! No wonder there is a scramble for folks to get to and retire in the Sixth District. Unconscionable on so many levels and then reality is so many of the smaller churches are struggling and badly need repairs. If internal overall is not embraced then it will soon be forced by the IRS. God’s people must do better.
    Peace!

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    1. I can recall a conversation I had with a bishop, many years ago, concerning Episcopal compensation. I said to him it is a shame the salary we pay bishops, we make them thieves. No other institution pays its CEO with commensurate responsibilities the pittance we pay our bishops. I said to him we should pay our bishops a salary commensurate with their duties, responsibilities, and provide all the amenities and non-financial perks that come with the office. And bishops would not “need” to find other means to supplement their salaries. He looked at me, smiled, and shook his head. He said to Me “Charlie, you are a good man, but son you are naive. We would get all of that and still find a way to get more!” Truer words have never been spoken!

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  2. Thank you, Bishop Leath, for spelling out details that I wondered about but of course could not get close enough to understand. I will have to spend more time reviewing your suggested solutions but it surely seems to be a good step to begin reasoning together. I agree that it is unfair and untenable for anyone to receive compensation in a nonprofit that is unrecorded and not correctly reported if reported at all. As a nonprofit, we are required to ensure that no one person receives compensation that is excessive because all nonprofits are designed to benefit others, not themselves, and should never allow misuse of the tax-free monies it receives. This is referred to as private inurement that can result in a nonprofit losing its nonprofit status. More concerning, in my opinion, is the source of the income. The church generates revenues from the loving, after-tax sacrificial gifts of its members. Therefore, we should treat those sacrifices with the utmost respect and reverence and therefore accountability and transparency are just our reasonable service. Should the givers be taxed and the receivers not taxed? I’ve been asked numerous times in training sessions should churches request a W-9 form from their Bishop and their PE’s. The answer has always been “of course”. I personally have never had a Bishop refuse to complete a W-9, but I have encountered many PE’s who flat-out refused to do so while receiving monthly compensation from every church in their District. I have trained at many churches where the Pastor said there was no way he/she would ask the Bishop to complete a W-9. As we look at issues of accountability, this also applies to charitable giving receipts at the Annual Conference, District Conference and other meetings of our denomination where an offering is requested (See IRS Publication 1771). This process would provide an opportunity for accountability for what is received. I’ve always been concerned that at Annual Conference (pre-COVID), the financial report was made on the day prior to the closing. Therefore, all monies raised on the day of the report and the next full day of meetings, services and of course offerings were never reported or accounted for publicly. The financial report is made via PowerPoint, no copies are provided which makes it impossible to dissect the information provided and to ask meaningful questions. We must pull our heads out of the sand and address our failure to require more from our leadership. It breaks my heart that we allowed this tragedy to happen to our clergy before we started addressing what has always been obvious. I pray we are ready to reason together as family.

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