Commission Begins Accountability Studies of Large Nonprofit Ministries

Correction Appended

The Commission on Accountability and Policy for Religious Organizations, a group of non-profit ministry officials developing potential “solutions” to potential misuse of donations by religious non-profits, is planning a series of meetings across the nation gathering information on the financial activities of large non-profit religious groups, according to commission sources.

The commission’s three panels, composed of leaders from large religious organizations representing Christians, Jews and Muslims, met for the first time last week.

The commission’s work is under the auspices of the Evangelical Council for Financial Accountability, which was asked by Sen. Charles Grassley (R-Iowa) to head a commission investigating these issues when Grassley was chairman of the Senate Finance Committee. Grassley is currently still a member of the committee.

The commission’s work is the next step in an ongoing investigation by Senate Finance into potential abuse of donations to non-profit religious organizations. The investigation began in 2007 while Grassley was chairman, but Grassley's staff completed their report and released it in January 2011.

The Associated Press reported the original Grassley investigation "wrapped up" with "no definitive findings of wrongdoing." However, The Oklahoman reported in July 2011 the investigation is ongoing.

Nine investigation-related Senate documents are available online. One of the documents, a Senate Finance Committee memo to Grassley, summarizes the problems Senate investigators uncovered including possible abuses of the clergy housing allowance and using love gifts to avoid paying income tax. The memo highlights eight issues for further discussion.

Grassley asked the Evangelical Council for Financial Accountability to head a commission to investigate these issues and suggest potential legislative actions.

Sources expect the commission to support proposals for an Internal Revenue Service advisory committee for churches and religious organizations and the possibility of a limit on the IRS clergy housing allowance to one house per minister. But the commission is likely to oppose any requirement for churches, synagogues and mosques to file a Form 990.

Dan Busby, president of the ECFA, has stated in a letter to Grassley, "In our view, churches, in general, would view annual filing with the IRS to be governmental intrusion into the most intimate recesses of church administration, including compensation practices."

The IRS does not require churches to disclose their finances to their donors. Some churches require public disclosure in their bylaws and issue a monthly, quarterly or annual financial statement. Proponents of IRS reporting argue that requiring churches to file the Form 990 would give donors valuable information such as total revenue, total expenditures, total assets, and compensation of key employees.

These proponents argue requiring churches to file the Form 990 would be especially helpful in making televangelists transparent. For example, Inspiration Network stopped filing after 2008, according to a search of GuideStar, which provides a searchable database of 990s. For 2008, Inspirational Network reported total revenue of $73,421,047 and total compensation of $1,416,161 to CEO David Cerullo. Compensation for many televangelists is confidential because of a lack of IRS reporting.

Some televangelists support IRS reporting. The Grassley memo contains congressional testimony from 1987 regarding the Jim Bakker scandal. In response to a question, televangelist D. James Kennedy said, "I would think that if a person is going to give money to something, that they have ... a responsibility to learn where it is going."

There are allegations of widespread abuse of religious donations. For example, the International Bulletin of Missionary Research claimed in a report this year that Christian religious leaders worldwide will “embezzle” $34 billion in donations in 2011. Sources at another watchdog group, the Trinity Foundation, assert that Christian leaders worldwide have spent as much as hundreds of millions on luxury aircraft over the last 10 years.

Correction:  Sunday, November 6, 2011:
An article on Thursday, November 3, 2011, about the new Commission on Accountability and Policy for Religious Organizations incorrectly described the group as congressionally mandated. The group was formed at the request of Sen. Charles Grassley.

Free Religious Freedom Updates

Join thousands of others to get the FREEDOM POST newsletter for free, sent twice a week from The Christian Post.

Most Popular

Free Religious Freedom Updates

A religious liberty newsletter that is a must-read for people of faith.

More In Church & Ministries