Financially, Graham empire an open book

Organization has been exemplary, auditors and charity experts say
The Dallas Morning News, Oct. 17, 2002
By JEFFREY WEISS / The Dallas Morning News

Billy Graham’s claims about eternal salvation are not subject to independent verification. The famed evangelist’s insistence on fiscal responsibility is another matter.

From the IRS to professional auditors to independent observers of large philanthropies to the individual donors that contribute most of the annual budget, plenty of people keep an eye on the Billy Graham Evangelistic Association. And in an era in which many large religious and secular institutions stand accused of hiding financial hanky panky, Mr. Graham’s organization is still cited as an example of doing the right thing.

“They continue to this day to be a leader in accountability,” said Dan Busby, vice president for member and donor services for the Evangelical Council for Financial Accountability. “Their track record across the decades speaks for itself.”

The crusade led by Mr. Graham that is scheduled to start Thursday night at Texas Stadium is the most visible part of an empire of Christian evangelistic activity. It’s an empire in transition, with daily control of the operation shifting in recent years from Billy to his son, Franklin.

Uncertainty about leadership and the tumbling economy contributed to a drop-off of more than $25 million in income between 2000 and 2001, association officials say.

But the standards for financial accountability pioneered by Billy Graham have not changed with the transfer of leadership, association officials and outside observers agree. And even with the drop in revenue, the association continues to spend close to $100 million a year on a variety of ministries.

How that money is spent is a matter of remarkably open public record, say experts in philanthropy.

Want to read the association’s income tax records? Three years’ worth are up on the Web site – along with the past four annual reports and their audited figures. A Web surfer can easily find out how much Mr. Graham was paid in 2000 – $209,700, which includes a housing allowance and health insurance and other benefits.

The records also include many of the specifics of how the organization managed more than $400 million worth of donations, investments and properties in the United States and Canada.

BGEA records say that the association spends about 7.5 percent to pay for administration and 6.8 percent for fund raising – both considered very low compared even with other reputable organizations, experts say.

Less open

Many other religious leaders and institutions are much less forthcoming, said Dr. Thomas Jeavons, general secretary of a Quaker group called the Philadelphia Yearly Meeting and author of a book on management of Christian service organizations.

“The majority do not go to the lengths that the Graham organization does,” he said.

The Benny Hinn Web site, for instance, offers no information for the casual Web surfer about the finances of that well-known Irving-based evangelist’s operations.

Most of the BGEA annual budget is paid from small contributions – the average donation is less than $28, association officials said. That indicates the level of trust and the emotional bond between Mr. Graham and millions of donors, said Rebekah Basinger, a fund-raising consultant for Christian organizations.

“I’ve never run into a donor who says they feel misled or manipulated or strong-armed by the Graham organization,” she said. “Even though it’s a very large organization and a lot of the people who are giving have never even met someone personally from the organization, they feel a real sense of emotional and spiritual attachment.”

Locally, the Metroplex Mission nonprofit group has a goal of raising $3.1 million to pay for stadium rental and salaries. Organization officials say about two-thirds of that total had been raised through Wednesday afternoon.

The elder Mr. Graham’s concern with both appearing and acting financially responsible started early in his ministry.

In 1948, he and co-workers and friends George Beverly Shea, Grady Wilson and Cliff Barrows met to discuss how to avoid the most common criticisms of evangelists. Among the points they agreed on, in what became known as the “Modesto Manifesto,” was that the Graham team would avoid even any appearance of financial abuse.

In his 1997 autobiography Just As I Am, Mr. Graham recalls how that played out following a 1950 crusade in Atlanta. The day after the event ended, an Atlanta newspaper ran two photos: one of Mr. Graham smiling as he departed, the other of his aides struggling to carry away the bulging money sacks containing that day’s “love offering.”

“Was I an Elmer Gantry who had successfully fleeced another flock? Many might just decide that I was,” he wrote.

Traditionally, evangelists personally received the “love offering” at the end of a crusade. After seeing those photos, Mr. Graham ended the practice for himself and instead started collecting a specific salary from his association, an amount intended to be comparable to the pay of a pastor at a large church.

One subject of inquiry

There has been one ministry-altering embarrassment since Modesto. In 1977, the Charlotte Observer reported that the Billy Graham Evangelistic Association had not disclosed a $23 million fund while reporters were researching a story. The World Evangelism and Christian Education Fund was part of a Dallas nonprofit group under the association’s umbrella. Though Graham had reported the fund to the IRS, he later conceded that he should have been more forthcoming with reporters. Since then, the ministry has made its annual audit available to anyone who asks.

In 1979 after a series of public scandals concerning other well-known ministries, the BGEA was among the co-founders of the Evangelical Council for Financial Accountability. An executive from the BGEA and one from the international aid ministry World Vision worked together to set up the council. Designed to be a “Better Business Bureau” for Christian organizations, the council now has more than 1,000 members.

Exactly how big is the Graham empire? In the 2001 annual ranking of philanthropies by the Chronicle of Philanthropy, the BGEA was 114th in public support with $106 million. The BGEA’s annual report lists $261 million in assets for the general ministries and another $98 million for the Training Center at The Cove, a conference center located in North Carolina, Mr. Graham’s home state. Add a few million more for the Billy Graham Evangelistic Association of Canada, the Graham Fund for Evangelism and several smaller affiliated organizations, and the total hits more than $406 million.

That doesn’t include Samaritan’s Purse, which is ranked 88th on the 2001 list with $124 million of public support.

The son’s organization

What’s the connection? Franklin Graham, Billy’s son, is the CEO of Samaritan’s Purse and, as of 2001, the CEO and president of the BGEA.

Some fiscal watchdog groups are uncomfortable with the family and financial arrangement involving the father and son organizations. The two organizations have traded in-kind services – camera crews, for instance – and several hundred thousand dollars in recent years.

The two organizations maintain separate quarters and separate boards of directors. Five people sit on both boards but do not vote on decisions involving cooperation between the organizations, officials said.

“The organizations are working on developing a shared service agreement that would address the evolving cooperation in terms of mutual services,” Graham spokesman A. Larry Ross said.

Concerns about the interactions of the two groups have not sullied the reputation of the elder Mr. Graham and the association that bears his name, said Daniel Borochoff, executive director of the watchdog group the American Institute of Philanthropy.

“He’s been looked upon as the gold standard,” he said.

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Religion News Blog posted this on Tuesday October 22, 2002.
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