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Raising the bar

Raising the bar


When Sen. Charles Grassley (R-Iowa) started investigating the finances of televangelists last year, one of them-Atlanta-based Creflo Dollar-complained on Larry King Live that churches were exempt from federal financial disclosure requirements. He said that if Sen. Grassley wanted more information, he should "get a subpoena."

Others are looking for alternatives to subpoenas. The Evangelical Council for Financial Accountability (ECFA) has recently started a new division to bring to churches the level of oversight the ECFA now brings to about 2,000 evangelical Christian ministries.

"Most churches don't reveal enough information, even to their members," said Kenneth Behr, the president of the ECFA. "It's not part of the culture of many churches, they don't have sophisticated accounting, and the IRS rarely does an audit." (The IRS performed only about 7,500 audits on the more than 750,000 tax-exempt organizations in the country-and that was down from about 10,000 audits in 1997, though the number of tax-exempt organizations during the last decade has grown at least 25 percent.)

The ECFA took shape after the televangelist scandals of the 1970s and '80s. Billy Graham's involvement gave the organization instant credibility, and it probably kept the government from imposing stringent regulations. But ECFA membership is voluntary, and members pay dues based on size. In other words, kicking a ministry out of the ECFA costs the group money, so this ultimate sanction rarely happens. Behr, however, defends the approach: "We're a membership-based organization, and we're proud of that. Our approach is a redemptive approach. Our goal is to make ministries better, not punish them."

The ECFA will ask for salary information about top church staffers-and so far the church launch has been slow. Only 50 churches, along with about 15 denominations or regional church bodies, are members, and most joined before the creation of the new church division. According to Behr, most of the new members in the church division will likely be independent churches such as His Place Community Church, a 1,200-person church in Burlington, Wash., about 60 miles north of Seattle, with an annual budget of about $1.3 million.

His Place pastor Bruce Wersen said, "We got involved with the ECFA because we wanted to bring security to our congregation when we went independent from the Foursquare denomination." The Church of the Nazarene denomination has also joined, and church leadership is encouraging its 5,000 churches to consider membership.

Will this new ECFA initiative do for churches what the ECFA did for ministries in general a generation ago? Sen. Grassley told WORLD, "An increased focus on churches sounds like it'll make it even easier for churches to keep their good name. Self-correction is preferable to more legislation and government regulation. If self-correction works, there's no need for Congress to reinvent the wheel."

Standard seven

The ECFA's Standards of Responsible Stewardship:

1. ECFA member must have a clear written statement affirming the evangelical Christian faith.

2. Members must have a board of not less than five individuals, a majority of whom are independent, which meets at least semiannually.

3. The organization must keep accurate and complete financial statements, which must be submitted annually.

4. Appropriate management and financial controls must be in place.

5. Every member must provide a copy of its current financial statement to anyone who submits a written request.

6. Every member must avoid conflicts of interest. Transactions with "related parties" must meet ECFA guidelines.

7. Fundraising must be in compliance with ECFA's 11-point fundraising guidelines.

Rusty Leonard

Rusty Leonard

Rusty is a former WORLD contributor.

Rusty Leonard

Warren Cole Smith

Warren is the host of WORLD Radio’s Listening In. He previously served as WORLD's vice president and associate publisher. He currently serves as president of MinistryWatch and has written or co-written several books, including Restoring All Things: God's Audacious Plan to Change the World Through Everyday People. Warren resides in Charlotte, N.C. Follow him on Twitter @WarrenColeSmith.