Parsonage vs. Housing Allowance
The Sanctuary, Fellowship Hall and Education Building are all familiar structures for many United Methodist churches. In addition, most United Methodist churches also maintain a house for the pastor called the parsonage.
A well-kept parsonage is a great help to pastors and churches as appointments are changed, especially in areas outside the major cities where real estate markets may be limited. Some churches, however, have found that the existing parsonage may no longer meet the changing needs of pastors and their families. In addition, the cost versus benefit of maintaining the parsonage may not support ministry priorities and budget realities of the church.
With the consent of the District Superintendent, a church may decide to sell the parsonage and provide in its place a “housing allowance” for the pastor. The housing allowance is simply a cash payment to the pastor to assist with the personal cost of renting or owning a private residence. (Consult the Standing Rules of the Missouri Conference regarding the policy on parsonages and housing allowances.)
When making this transition, some churches choose to invest the parsonage sale proceeds.
“We have a number of churches that maintain the proceeds from the sale of a parsonage in a Foundation investment account,” David Atkins, Foundation Executive Director said. “Over time, these funds are managed to sustain an annual housing allowance distribution and still maintain the necessary value to purchase a new parsonage in the future as needed.”
The parsonage has long been a feature of Methodist congregational life and continues to serve a vital purpose in many locations. Nevertheless, managing parsonage sale proceeds to support a housing allowance can give churches flexibility in light of changing circumstances.