Church pastors often suffer from an imposed “vow of poverty.” Congregations that are not faithful donors often remain chronic. Founding pastors often remain for their entire career at the same church never subjecting the church to the reality of the marketplace. Pastors that make the mistake of residing in a “parsonage” lose the home equity most middle-class Americans treat as a civil right. Founding pastors often fail to install retirement plans until late in their career with no way to “catch up” without offending the good folks at the federal and state taxing authorities. However, when a pastor or a conscience driven church leadership tries to address the problem with inadequate resources and inadequate professional advice one or the other, or both, enter into arrangements that are questionable. The pastor, and usually the pastor’s widow, end up without a solution, or worse, with a ruined legacy.
In Jenkins v Refuge Temple Church of God, Slip Op. (SC App. 2018), the founding pastor appointed board members, however, the bylaws required congregational election. The pastor asked the board to enter into an employment agreement with him that contained a survivorship clause whereby his widow would receive income for life. The employment agreement with the survivorship clause was not voted upon by the congregation nor even revealed to the congregation. After the pastor died, the widow was paid by the congregation for six years. Financial necessities convinced the successor pastor and church leadership to phase out the payments. They believed the widow’s payments fulfilled their obligation as set forth in church tradition for such situations and did not learn of the written contract until the litigation for breach of the contract was brought by the widow. The trial court entered judgment for the widow on a breach of contract theory, apply neutral principles of law, but the Court of Appeals reversed. The failure of the board to be properly elected was fatal to the enforceability of the contract. That the church had made monthly payments to the widow did not estop the church under the laches doctrine because the church did not know about the contract.
Other financial arrangements might have worked far better than a “secret” contract adopted by a board of dubious legal authority. A Certified Public Accountant, a financial planner, or even an insurance specialist could have suggested many options and revealed their relevant costs. The pastor and the church may have had a moral obligation to the widow. Whether either fulfilled that obligation is a moral question not within the scope of this report. During the pastor’s ministry, a retirement plan should have been in place other than the employment contract survivorship clause. Both the pastor and the church leadership should have enacted it. A life insurance employment benefit, for example, would have been the easiest solution.