Parsonage vs. Housing Allowance
By Fred Koenig
The Sanctuary, the Fellowship Hall, and the 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. In fact, in those areas, they are critical for the appointment system. Some churches, however, have found that the existing parsonage may no longer fit 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.
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, and churches must begin this conversation with the District Superintendent.)
To make this transition, some churches choose to invest the parsonage sale proceeds in an account at the Missouri United Methodist Foundation. The earnings from the account are then used to provide a significant portion of the new housing allowance.
“We have a number of churches that maintain the proceeds from the sale of a parsonage in a Foundation account,” states Foundation executive director, David Atkins. “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.