Tax-Exempt Ministries Avoid New Regulation

A three-year investigation into financial improprieties at six Christian ministries whose television preaching bankrolled leaders’ lavish lifestyles has concluded with the formation of an independent commission to look into the lack of accountability by tax-exempt religious groups.

Senator Charles E. Grassley, an Iowa Republican and the ranking member of the Senate Finance Committee, issued a report saying that “self-correction” by churches and religious groups is preferable to legislative or regulatory solutions.

Money, Money, Money…
If anyone teaches false doctrines and does not agree to the sound instruction of our Lord Jesus Christ and to godly teaching, {4} he is conceited and understands nothing. He has an unhealthy interest in controversies and quarrels about words that result in envy, strife, malicious talk, evil suspicions {5} and constant friction between men of corrupt mind, who have been robbed of the truth and who think that godliness is a means to financial gain. {6} But godliness with contentment is great gain. {7} For we brought nothing into the world, and we can take nothing out of it. {8} But if we have food and clothing, we will be content with that. {9} People who want to get rich fall into temptation and a trap and into many foolish and harmful desires that plunge men into ruin and destruction. {10} For the love of money is a root of all kinds of evil. Some people, eager for money, have wandered from the faith and pierced themselves with many griefs.
– The Bible, 1 Timothy 6:3-10 NIV

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But his report found that only two of the six ministries cooperated with his investigation and volunteered to institute reforms. The others continued to hide behind tax laws that allow religious organizations to operate tax-free with little transparency or public accountability — a status that sets them apart from other nonprofit groups and charities that must file detailed annual reports of expenditures to the Internal Revenue Service.

“The challenge is to encourage good governance and best practices,” Senator Grassley said in a statement, “and so preserve confidence in the tax-exempt sector without imposing regulations that inhibit religious freedom or are functionally ineffective.”

The inquiry began at the request of evangelical Christians who shared their alarm with Senator Grassley about how the six ministries appeared to be using donations from the faithful to buy airplanes, lavish homes and jewelry, and to run profit-making businesses for leaders and their family members.

All six are “prosperity gospel” ministries, which teach that believers will themselves become prosperous by donating generously to the ministry. The preachers flaunt their opulent lifestyles as evidence that their teaching is true.

The two ministries that responded fully to Mr. Grassley’s investigation and indicated they had reformed their practices were Joyce Meyer Ministries and Benny Hinn Ministries.

The four ministries that provided incomplete or no information, according to the Finance Committee investigators, were Kenneth and Gloria Copeland of Kenneth Copeland Ministries; Randy and Paula White of Without Walls International Church; Creflo and Taffi Dollar of World Changers Church International; and Bishop Eddie L. Long of New Birth Missionary Baptist Church. (Bishop Long was recently sued by four young men who accuse him of luring them into sexual relationships. Bishop Long has denied the allegations.)

– Source / Full Story: Tax-Exempt Ministries Avoid New Regulation, Laurie Goodstein, New York Times, Jan. 7, 2011 — Summarized by Religion News Blog

New panel formed to examine issues around church finances

A new commission has been formed to address issues raised in an investigation into the financial operations of six media-based mega-ministries, including two in Georgia.

The Commission on Accountability and Policy for Religious Organizations will be led by Michael Batts, an expert in board governance, financial reporting and tax compliance for nonprofits.

In an interview Friday, Batts said he hopes solutions can be identified that don”t involve “burdensome legislation.” I would not say categorically that legislation would be bad, but certainly harsh, adverse or burdensome legislation would not be welcome.” He said solutions could include self-regulation for churches and faith-based nonprofits or improved enforcement.

Three ministries provided incomplete information. They were Randy and Paula White of Without Walls International Church; Long’s New Birth Missionary Baptist Church/Eddie L. Long Ministries; and Kenneth and Gloria Copeland of Kenneth Copeland Ministries.

World Changers was called the “least cooperative.” To date, the review said, the committee staff has been unable to determine the names of the ministry’s board members or any information regarding compensation. A spokeswoman for Dollar could not be reached for comment.

As a result, information about those churches was gleaned from public sources and current or former officers, directors, key employees, watchdog groups and current and former members. The staff, for a variety of reasons, decided against issuing supoenas. In some cases, informants said they were warned by churches that they would be sued if they violated confidentiality agreements. Some informants would only speak anonymously and some were too frightened to do even that, according to a staff memo to Grassley.

The investigation report issued this week details the ministries’ luxury homes and cars, trips on private jets and expensive gifts, including two Rolls Royces that a third party reported was given to the Dollars as a gift from the church.

The fact that some of the targeted ministries failed to provide complete or any information to the committee was particularly troublesome, said Riggins Earl, a professor of ethics at Interdenominational Theological Center.

“Something in the culture has obviously gone out of control in terms of a church’s corporate accountability and transparency,” he said.

“I’m all gung ho for church and state separation but I don’t think the church should have the power that Mr. Dollar and Mr. Long want to give themselves.”

– Source / Full Story: New panel formed to examine issues around church finances, Sheila M. Poole, Atlanta Journal-Constitution, Jan. 7, 2011 — Summarized by Religion News Blog

See Also

Grassley Releases Review of Tax Issues Raised by Media-based Ministries
Research resources on Prosperity Teaching

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Religion News Blog posted this on Saturday January 8, 2011.
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