Legislation Seeks to Reform Non Profits

In the wake of scandals regarding alleged misuse of funds by charities, the Senate Finance Committee held hearings and is reviewing recommendations for possible legislation. Fifteen field hearings to discuss ramifications of the recommendations just concluded in Seattle last week on May 19.

The recommendations concentrate on practices, policies and procedures to ensure transparency and ethical conduct, according to a statement made by the Panel on Nonprofit Sector - an independent committee established to research the impact such legislation would have on non-profits. The Panel is online at www.nonprofitpanel.org.

Meanwhile, in a recent release, Evangelical Council Financial Accountability (ECFA) wrote that although it "supports the correction of abusive transactions" through such measures, its "concern" is that "these reforms will likely raise the overhead costs of all charities, diminish the incentive for donors to contribute non-cash gifts, and otherwise invade the boardrooms of America’s charities."

The ECFA urges member ministries to contact the Senate about the impact that such legislation would have on operations.

Wall Watchers, an advocate for donors has a slightly different standpoint. Michael Barrick, Managing Director, Education & Communications, believes that proper stewardship of resources are rooted in Scripture and stand in favor of new legislation, though they regret that this measure had to be taken by Congress.

Barrick said, "even one Christian ministry or church not doing the work donors expect is too many."

Although they're concerned that possible legislation might place additional burdens on the ministries, Wall Watchers has already found a number of ministries who personally benefit from donors' funds and agrees for the need of such legislation.

"While the Bible clearly holds ministries to higher standards than any government law, Congress may be forced to require additional constraints and reporting requirements of nonprofits to protect donors," said Michael Barrick.