In 2009, Pastor James MacDonald received over $500,000 in monetary compensation from Harvest Bible Chapel and Walk in the Word. This does not include any monies received from Harvest through his access to a staggeringly large personal expense account. It also does not include any possible, additional income he may have derived from other sources including: preaching fees, outside speaking fees, Churches Helping Churches, Harvest Bible Fellowship, book royalties, advances on book sales, 403B employer contributions, health benefits, or any other potential sources of income.
In October 2005, Pastor James MacDonald purchased a home in Inverness, Illinois for $1.9 million. His original mortgage on the home was for 15 years and $1.4 million dollars, so his down payment was roughly $500,000. Assuming a fictionally and absurdly low interest rate of 3%, he would have had a mortgage payment of approximately $9,660 per month. Obviously, as interest rates were higher at that time, his mortgage payment would have been higher as well. This figure also does not include any property taxes on this home, which in 2011 were $26,961.28 or $2,246.77 per month. Ultimately, what must be recognized is the simple fact that before any loan can be approved by a bank, the lendee must be able to provide substantial evidence that he or she is capable of making the regular payments. So, as of 2005, it can reasonably be assumed that MacDonald was already earning enough money to prove that he was capable of making the payments on this home.
Regarding MacDonald’s regular salary as an employee of HBC, it has been reported, that as of 2009, Pastor James MacDonald received a $100,000 raise. This elevated his HBC base salary from an already robust $250,000 to a staggering $350,000 per year. What’s more, in addition to the substantial raise he received through the church, Pastor James MacDonald had also received significant yearly raises from Walk in the Word. In 2006, it was reported to the IRS that MacDonald was earning $124,702 per year from Walk in the Word. Just three years later, his compensation from WITH had grown by 32%, and he was now receiving $164,511 per year.
Since 2009, it has become far more difficult to track and document MacDonald’s compensation. Prior to 2010, Walk in the Word was a legally independent non-profit organization that was separate from Harvest Bible Chapel. But as of 2010, Walk in the Word was brought under the leadership of Harvest Bible Chapel as a ministry of HBC. While this may not seem significant at first, it actually makes tracking salaries far more problematic. Allow us to explain. Under the present tax code, non-profit organizations, known as 501(c)(3)s, are tax exempt; and they are required to file a Form 990 with the IRS. This form tracks the organization’s revenue streams and major expenditures, including the salaries of top officers and employees. However, there is one exception to this rule. As per IRS guidelines, religious, non-profit organizations (e.g. churches, synagogues, mosques, etc…) are not required to disclose the top salaries in the Form 990. Thus, given the fact that Walk in the Word is now under the umbrella of HBC, which is classified as a religious ministry, it is no longer required report top salaries on the Form 990; and there is no longer any way to determine how much MacDonald is receiving through Walk in the Word. Moreover, in a statement provided by the former elder, Dan Marquardt, on July 2013, the HBC elders do not receive a line item budget before agreeing to a yearly budget, and, as a result, they do not know how much the church is paying James MacDonald.
Setting this brief discussion of tax law aside for a moment, let’s put this salary discussion in a larger context. According to the Leadership Network’s 2010 Report on large church salaries, senior pastors of churches with 10,000 to 14,999 congregants were paid, on average, $173,000 per year. At the high end, pastors were paid $270,000. Therefore, in 2008, MacDonald was already receiving a salary at the high end of what pastors in large churches were reported to make in 2010; and he still insisted upon a $100,000 raise. Keep in mind, this salary is completely separate from the compensation he receives from Walk in the Word, a ministry of HBC.
So who decides how much James MacDonald should be paid? In the past, Harvest Bible Chapel subscribed to a commonly used church resource that helped elders determine appropriate compensation for a pastor. This resource utilized multiple categories such as region, church size, ministry context, experience, etc… to determine appropriate compensation. In 2008, the elders’ interpretation of this resource suggested that James MacDonald should receive a salary of $250,000.
Unsatisfied with this offer, James MacDonald brought several other external resources into the conversation, primarily leaning upon Jack Graham and the Southern Baptist Convention. Apparently, he believed his services to be worth far more than that which Harvest was offering. In the end, the elders consented to give him a salary of $350,000. But what must be remembered is that this request for a 40% pay increase came during a season that Harvest was in massive financial debt and the broader economic culture at large was on the verge of historic collapse. Please recall that 2008-2009 was the peak of the financial hardships in America. Unemployment was hovering between 9 and 10% for the first time in a generation, and millions more were underemployed. There can be little doubt that in a church the size of Harvest, a number of families were negatively impacted by the economic downturn. And it is also quite possible that some of these families may have continued to tithe their income, unknowingly subsidizing Pastor MacDonald’s $100,000 raise.
Let’s put this into another context. The largest two campuses of Harvest Bible Chapel are located in Rolling Meadows and Elgin, Illinois respectively. A quick survey of the median household incomes in these communities, and even in more affluent suburbs that likely feed into the Harvest system, reveals a staggering inequity between MacDonald’s income and the income of those he serves. In Elgin, the average median household income, in 2009, was $56,091. In Rolling Meadows, it was $56,189. In Palatine, it was $72,521. And lastly, in Barrington, it was $106,973. While Scripture calls for “double honor” to be given to elders that preach and teach well (1 Timothy 5), MacDonald’s “honor” seems to be 5 to 10 times greater than the average family who likely tithes to his ministry.
So, to recap. After leading a church into astronomical debt, James MacDonald pursued a $100,000 dollar raise (or a 40% increase in base salary) all while ministering to a largely middle class community, some of whom were presumably struggling with economic hardship. What does this reveal, if anything, about the heart of the man? Why would a pastor who does not love money ask for such a raise during a season such as this? Were other staff members given raises during this year, as well? And if so, what were those raises like? Finally, why would a church offer raises of this magnitude when many within society were taking pay cuts just to stay employed?
What is fascinating to observe is that Pastor James MacDonald is not alone in collecting a large salary from the people of Harvest. While we have no documents at the present time to show the current salary of the top leadership (Rick Donald, Kent Shaw, Fred Adams, Luke MacDonald, etc.), we do have a recent document regarding the salary of Janine Nelson, Director of Walk in the Word, a ministry of Harvest Bible Chapel. In 2009, Ms. Nelson collected a compensation in the amount $185,122. Is it reasonable to assume other more senior members of the organization are paid more?