Monetary stewardship in an age of materialism.
Just when the decades-old memories of the PTL and Jimmy Swaggart debacles were finally beginning to fade, along came 2007. In what was one of the most tumultuous periods in recent charismatic-Pentecostal history, last year uncovered scandal after scandal surrounding renowned ministries, churches and universities. Some situations brought needed exposure; others simply added to the disillusionment. Yet at the center of most was one thing: money.
The culmination came in November when Sen. Charles Grassley (R-Iowa), the ranking member on the U.S. Senate Finance Committee, requested information from six media-based ministries regarding allegations of "possible misuse of donations." The senator's probe, which still continues, involves such misappropriated expenses as convertibles, mansions, private jet planes, furnishings and excessive compensation.
Each ministry leader contacted—Benny Hinn, Creflo and Taffi Dollar, Kenneth and Gloria Copeland, Eddie Long, David and Joyce Meyer, and Randy and Paula White (who recently divorced)—has uniquely responded to questions regarding their financial dealings, with some publicly refuting Grassley's rights to conduct a federal investigation. At the same time, three of these ministers (Hinn, Creflo Dollar and Kenneth Copeland) were serving on the board of regents at the scandal-ridden Oral Roberts University, whose former president, Richard Roberts, is battling a lawsuit alleging he and his family misused university funds. (Hinn has since lost his status as a voting member and Dollar has resigned.)
It's enough to dispirit even the heartiest of Spirit-filled ministers. Given the recent spate of scandals, alleged or otherwise, ministries of all sizes and stripes would do well to get their houses in order. At least two organizations are committed to seeing this through. And although they may differ in their approach to the advocacy of financial accountability among ministries, both are making a difference.
Evangelical Council for Financial Accountability
The Evangelical Council for Financial Accountability (ECFA) has been a catalyst for greater financial accountability for nearly 30 years. Ironically, ECFA got its start with the urging of another senator, Mark Hatfield (R-Ore.), who challenged several key Christian leaders to provide peer oversight as a "Christian Better Business Bureau" or risk government intervention.
Established by a group of more than 150 evangelical ministries, ECFA has grown to become the largest accreditation agency for nonprofits, with more than 2,000 organizations representing $17 billion in annual revenue. Among the membership are more than 100 churches, with combined annual revenues of about $600 million, and 16 different evangelical denominations.
ECFA also has a longstanding relationship with the National Religious Broadcasters (NRB), whose members are required to become part of ECFA. Interestingly, none of the six ministry organizations identified by Grassley were members of either NRB or ECFA.
Since the senator's inquiry began, ECFA President Kenneth Behr says the organization has received several inquiries from large media ministries that have not been accredited by ECFA in the past. "We are working presently with a few of these ministries to provide them with full accreditation and will hopefully be able to work with more of them in the near future," Behr reports.
Some constituents think more legislation is the key to compliance, but not Behr. "The key to financial accountability of nonprofits is an informed donor public, an independent and fully engaged board of directors, and accurate and transparent financial statements prepared by independent CPAs in a manner that is commensurate with the size of the organizations," he says.
Noting the importance of ethical fundraising tactics, Behr cites the organization's strict standards concerning the practice: "Our fundraising standards deal stringently with areas such as communications, incentives, premiums, acting in the best interest of the donor and gifts in kind. ... Some fundraising techniques diminish the overall integrity of the ministry and can irrevocably harm donor relations. Typically, ministries that rely on aggressive marketing techniques and utilize methods that may be contrary to biblical principles of stewardship often compromise common standards of integrity."
So what can be done to raise the bar when it comes to fundraising? "We would hope that more and more donors are looking for the ministries they support to embrace standards of financial accountability, financial transparency, good governance and ethical fundraising," Behr says.
It appears those recipients are taking note too. According to Behr, in addition to traditional ministries, more megachurches are opting for financial transparency with parishioners and personnel, stressing full disclosure for purposes of fiscal accountability in an effort to maintain higher standards of stewardship.
Responding to the growing need for such accountability, ECFA last July created a special division for churches to provide assistance through accreditation. The process has proven to be effective in improving professionalism, ensuring consistent services and identifying those organizations that are fully capable of fulfilling their individual mission.
Another organization making a difference with its advocacy of financial accountability for ministries is Wall Watchers, a watchdog agency founded 10 years ago by former investment counselor Rusty Leonard. A self-described "Consumer Reports" that covers faith-based ministries, Wall Watchers is a donor advocate that represents the interests of Christians desiring to give to ministries. As such, it does not hesitate to communicate information to regulators and other governmental authorities, as well as to media outlets searching for information.
The group profiles many of the largest Christian ministries and provides reports much like an investment bank's analysis of a corporate stock. These aid donors in understanding the key issues concerning a ministry's operations.
In addition, these reports include information on a ministry's purpose, organizational details, mission statement, statement of faith, history and current needs, as well as financial efficiency ratings and transparency grades. Also provided when available are financial ratios, historical income statements and balance sheet information relating to the ministry.
Rodney Pitzer, managing director of research for Wall Watchers, says at the heart of Grassley's inquiry is the notion that tax-exempt organizations should not operate primarily to further the self-interest of their founders, but rather to engage in activities that further a proper exempt purpose.
"There is no reason to be suspicious of all fundraising groups," he says. "However, asking questions is the best way to make sure contributions support activities that are important to donors. Donors should feel confidence when giving and not skepticism."
As for the separation of church and state issue, Pitzer echoes Behr's cautionary tone. "Government oversight of charities is generally very weak and affords little protection for donors," Pitzer says. "Ministries would be well advised to support an acceleration of efforts in the area of accountability, independent ministry research and donor empowerment. It would be for their own good, the greater good and the good of the kingdom."
For his part, Pitzer is optimistic that good can come from the Grassley probe. "I hope that the organizations comply and prove themselves above board, and if something is amiss to correct it as soon as possible. I also hope that nonprofit organizations not part of this request be proactive and evaluate their own ministries and choose to operate with best practices. Finally, I hope that a greater awareness is brought to the general donating population to give to open and transparent organizations."
Pitzer believes churches have a moral obligation to internally maintain proper governance and separation of duties, design proper financial controls, carry out the prescribed procedures, make sure the checks and balances are not thwarted, be open and transparent to all, comply with all applicable laws and make audited financial statements available to all.
Perhaps expressing the sentiments of disgruntled donors across the board, he's quick to point out the bottom line of financial stewardship: "Anything that looks like a dictatorship or oligarchy within a church or any tax-exempt entity where one person or close family can do anything they want without any accountability is wrong."