Yesterday morning, Christianity Today announced that the Evangelical Council for Financial Accountability suspended Harvest Bible Chapel for potential violation of four of seven financial integrity standards. ECFA’s president Dan Busby told CT that ECFA is trying to find out if the church is or is not in compliance. Although it has been obvious for some time, at least the ECFA has given the public some indication that all may not be right at HBC.
ECFA’s renewed investigation appears to be a response to Julie Roys’ indefatigable investigation of HBC and pointed questions in print for ECFA about HBC’s financial practices. Roys’ work is like deja vu all over again. ECFA also said Gospel for Asia and Mars Hill Church were meeting standards until it was learned that the organizations weren’t as they seemed. In light of the current HBC debacle, I thought of this 2014 article about ECFA’s benefit to donors and am reprinting it here.
Without the work of whistleblowers, bloggers, and journalists (mostly bloggers in these cases), would we ever have known any of what we know now about MHC, GFA, and HBC? (If a former board member had not leaked the ECFA report about GFA to a blogger, the public would never have known the extent of the financial issues with that mission giant.) ECFA membership gave those organizations a seal of approval which helped convince people to part with their money. I hope these glaring situations prompt some changes at ECFA and perhaps even some additional regulation of non-profits.
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The mission statement of the Evangelical Council for Financial Accountability is “Enhancing Trust in Christ-Centered Churches and Ministries.” A primary means of pursuing their mission is through promotion of their seven standards of stewardship. The ECFA website states that the standards are “are fundamental to operating with integrity.” The ECFA tells the public that organizations who voluntarily agree to adhere to the standards “must comply with all of the standards, all of the time.”
But what happens when an ECFA member does not adhere to “all of the standards, all of the time?” What does the ECFA do to alert the public when non-compliance is discovered? The disappointing answer for donors is that the ECFA may do nothing to alert the public when an organization is or was out of compliance. In contrast to former years when the ECFA publicly suspended organizations, now the ECFA conducts a private review if there is concern over compliance with standards. Michael Martin, Director of Legal Services and Legal Counsel for the EFCA told me, “When standards-related issues are under review with respect to a particular member, ECFA does not comment on our review.”
I have written numerous emails and left phone messages with the ECFA regarding the Mars Hill Global Fund since May, 2014. I am aware that former members of Mars Hill Church have also contacted ECFA about the use of donations to the Mars Hill Global Fund from 2012-2014. In response to one of those former member emails, Michael Martin replied:
We are aware of the issues you mention and are in communication with leaders of Mars Hill concerning matters which relate to ECFA standards.
True to his word, the ECFA did not comment from May until July 25 when the organization released a statement to World Magazine:
The Evangelical Council for Financial Accountability (ECFA) conducted a review of Mars Hill Global and issued a statement that read, in part, “The Church has gone the second mile to address use of any funds if they were not used consistently with donor intent. This commitment, which ECFA will periodically verify, demonstrates the integrity of Pastor Mark Driscoll and Pastor Sutton Turner.”
In other words, trust us, we will let you know. However, the problem for prospective donors is no one let them know. This statement is very close to an admission that the church did not comply with ECFA guidelines “all of the time” (“The Church has gone the second mile to address use of any funds if they were not used consistently with donor intent“). About donations to the Global Fund between 2012-2014, the church had already acknowledged that the “preponderance of expenses related to church plants and replants in the U.S” which was a change from their 2013 Annual Report when they reported that Global Fund money went to mission efforts in India and Ethiopia. There was no report of money spent on U.S. church plants. Yet, donors would not have known that if not for those outside of Mars Hill Church and the ECFA writing about it. Mars Hill Church is still misleading people about how they portrayed Mars Hill Global and has certainly done their part to keep this information out of public view by scrubbing video evidence. Apparently, the ECFA also believes that these matters should be handled secretly without potential donors knowing what is going on.
The ECFA touts their standards as “fundamental to operating with integrity.” They are good standards. However, if the public does not know that an organization has not or is not following them, then how can that integrity be assessed?
In recent years, the ECFA has removed very few organizations from membership due to violations. Most former members have either voluntarily given up their membership or merged with other organizations.
In the old days, it seems to me that donors had more of an advocate with the ECFA. For instance, witness this response from then ECFA president Paul Nelson to criticism received in 1997 when the ECFA suspended Gospel Rescue Mission (a homeless mission?!) for using generic fundraising letters (a more minor offense than re-routing mission money, in my view):
The ECFA, Mr. Nelson said, does not want to punish member organizations, which by joining are voluntarily submitting to accountability. “By the same token we must call attention to the issues when a violation has occurred, and that’s what we’ve done in this case,” he said. “Our whole approach is not to be adversarial to the membership but to take disciplinary steps when we have to, which is what we felt we had to do. Now we’re prepared to work with them, if they are prepared to work with us.”
At the time, the ECFA seemed to take a more diligent approach to their public role. Nelson added:
The standards have not changed, Mr. Nelson said, and the suspension is a reminder that ECFA intends to be vigilant. “I think it does send a clear message-that if there are practices going on, and if those practices are widespread, that are borderline, or are moving in and out of compliance-that ECFA is serious about truthfulness in communications.”
As an evangelical donors to evangelical causes, this research into Mars Hill Global and the ECFA has been surprising and disappointing. More so than ever, if I have doubt about an organization, I will check that organization’s ECFA status but that will be only the beginning. I now know that an organization could be out of compliance even if accredited. Worse yet, the accrediting group could know an organization is out of compliance and never make it known. I may use the ECFA standards, but realize I will have to explore compliance on my own with the organization. I will have to ask for reports of how money is used (apparently the ECFA is not going to require this report from Mars Hill Church regarding their Global Fund) and not assume that accreditation means the organization has been or is in compliance with the guidelines.
Unfortunate, but good to know.
For more on Mars Hill Global, click the link.
For a donor-centered watchdog organization, see Ministry Watch.
“Qui bono” usually answers everything. Do the donors pay ECFA, or do the donees? (This is a rhetorical question, I would be shocked if they worked for the donors).
This is a good reason to do all your giving to your local church where you have a means of direct accountability for it.
One can hope. But at the local churches that I am personally familiar with, even those that publish annual financial reports, it’s almost impossible to understand where the money is really going. The numbers in the annual report can be 99% fictional and there is no easy way for the average parishioner to dig any deeper. Knowing some former church employees, I have had an inside look at just a few of the shenanigans that routinely go on and it isn’t pretty.
I’ve stopped giving to my home church (I don’t need to pay for the pastor’s $1M+ home while I live in a $250K dump) and now give directly to local charities and some foreign missions where I know the people involved. I want as much of my money, doing the most amount of good that it can, with the least amount of it going to overhead/admin. costs.
So you did practice accountability by refusing to give. That’s my point. Because you were doing it locally, you could know what was going on? How do you do that with the charities and missions you give to? What is the salary of the charity’s CEO position? How do you determine that?
It’s not always easy – in some cases, the salaries are public information, but not most of the time. There will always be some overhead at these organizations, as they have their “rain-makers” who hob-nob with the wealthy and convince them to give large amounts of money. Whether that is how Jesus would have done it is certainly up for debate.
Besides giving money, I also give of my services and my time (mostly helping people fix their cars). This is probably closest to the gospel model of how we should live. But in this modern age, time is often what we have the least of, while we toil away to make money which some of us are blessed with an excess of. You are correct in that it is often very difficult to know for sure if our gifts are being spent wisely – I wish I had an easy answer for this.
I agree. It’s a hard thing. There is no easy answer.
If you don’t believe you can trust your church to use money appropriately, shouldn’t you find a different church?
Yes. But we’ve tried before and failed. All of the churches in my area are afflicted by what I call affluenza. We visited three local to our house. At one, they were having an open house at the pastor’s new custom-built home. At the second, they were giddy because they were getting theater seating (those ghastly pews are for middle-age peons). At the third, their complaint was that their full-sized grand piano, which was donated, was too big for their stage. And then a few weeks later, it was announced that they got a “great” deal on a compact grand piano for something like $17K.
I cannot even make this stuff up.
Are there smaller churches? The big ones can sometimes have a tendency to have that exact problem, while smaller ones don’t have as much money and so aren’t tempted as much in the same way. Of course, small churches can have other problems.
Unfortunately yes, some of the churches were what you would consider to be smaller, where one would think that there would be less of an issue with this. I live in a very wealthy area in one of the least-religious places in the country, so I think that has more to do with it than anything.
I should make more of an effort to find a small faith community, but my experience with the big church we’ve attended since 2005 has really put me off organized religion in general. They treated some of their own employees far worse than secular organizations would have, such as firing one employee 2 weeks before Christmas when they knew he was scheduled for a major surgery right after Christmas (so he had to pay COBRA insurance in order to cover it). When you’ve seen behind the curtain, it’s hard to regain that trust in their integrity.
It’s hard to see much difference between the ECFA and the credit rating agencies
for securities, specifically Standard & Poor’s, Moody’s Investors Service and Fitch Ratings.
The ECFA and the CRAs rely on the same organizations they are rating as their main sources of income, and therefore have a profit incentive to be uncritical. In theory, ECFA and the CRA’s publicize their missions as beneficial to donors and investors, but in reality they have no ties or loyalties to those relying on them for information.
In the lawsuit against GFA, notice that the ECFA is not one of the defendants.
I’ve found CRA ratings very useful for the sell side with illiquid products like small town muni bonds… but my extremely large institution (you’ve heard of it) doesn’t even look at them on the buy side.
Julie Roys, the reporter who was sued by Harvest Bible Chapel, just published an article about the President of ECFA being fined for falsely claiming he was a CPA over a period of 15 years. http://julieroys.com/president-evangelical-financial-accountability-group-fined-falsely-claiming-cpa/
Not the kind of oversight the ECFA wants to be known for…
Not the kind of oversight the ECFA wants to be known for…
Talk about the fox guarding the hen house! No surprise to me that ECFA is just as crooked as GFA, Harvest and Mars Hill. Her post might force him to resign. I am not confident that his eventual replacement will be any better.
When your auditors aren’t really auditors….
Warren:
Problems with ECFA go way back–at least to 1995 and the collapse of the Foundation for New Era Philanthropy. This was a massive Ponzi scheme operating out of the Philadelphia area. ECFA accredited the Foundation right up to the declaration of bankruptcy. That’s when I lost confidence in the group.
Interesting … I had never thought (back then) to check whether New Era had ECFA approval … given the utter audacity of that scheme it would never have crossed my mind that ECFA approval would have been an option.
The ECFA could add another item to the seven criteria. require the churches list , on their websites, exactly how many of the seven criteria that church is in compliance with. If the church will not do it, they would also fail compliance testing. And a quick check with an ECFA website would reveal the areas on failure.This is no much- just a little something. And I wonder just how many churches and pastors would be willing to use this method to confess their shortcomings.
Isn’t it a little late for them to do this? Kind of like the SEC swooping in, well after the fact, after Harry Markopolos had been warning them for years to no avail, after the stock market downturn of 2008 revealed all that was going on with the Madoff Ponzi to any child who could read the headlines, and saying “Aha! Bernie Madoff is a fraud!” As I recall they got diced, sliced, roasted and ripped before Congress, it got ugly. I can still remember that woman, the lady who was head of the SEC or some higher up at the time, just getting destroyed by congressional grilling, and literally breaking out in hives while testifying. As I recall, she got fired. Well, she (and others) had it coming. They were incompetent and asleep at the switch–at least with that $65B fraud.
So why should the ECFA be treated any differently? Watchbloggers have suspected (or known) this for years and years, it’s hasn’t even been an open secret, it’s been a public spectacle, has been discussed and analyzed repeatedly, the impossibility of the Harvest financial situation gone over again and again, and throughout, all MacDonald did was act in a way that completely confirmed everything that was being said about him. What did the ECFA do all those years as the evidence piled up and millions kept pouring in–did they take any affirmative steps to protect people now reeling because they realize their money went not to genuine charity, but in large part to an abusive phony who wanted to indulge his fantasies (e.g., African safaris)? And now, here they come, riding in, after Mac’s gone and the smoke is rising from the wreck? To do what, exactly–scrawl out the chalk lines around the corpse, maybe?
Worthless.
No, I take it back, in this particular situation, it would appear that they would have had to make dramatic improvements to be merely worthless.
About as useful as a football bat.
Isn’t it a little late for them to do this? Kind of like the SEC swooping in, well after the fact, after Harry Markopolos had been warning them for years to no avail, after the stock market downturn of 2008 revealed all that was going on with the Madoff Ponzi to any child who could read the headlines, and saying “Aha! Bernie Madoff is a fraud!” As I recall they got diced, sliced, roasted and ripped before Congress, it got ugly. I can still remember that woman, the lady who was head of the SEC or some higher up at the time, just getting destroyed by congressional grilling, and literally breaking out in hives while testifying. As I recall, she got fired. Well, she (and others) had it coming. They were incompetent and asleep at the switch–at least with that $65B fraud.
So why should the ECFA be treated any differently? Watchbloggers have suspected (or known) this for years and years, it’s hasn’t even been an open secret, it’s been a public spectacle, has been discussed and analyzed repeatedly, the impossibility of the Harvest financial situation gone over again and again, and throughout, all MacDonald did was act in a way that completely confirmed everything that was being said about him. What the ECFA do all those years as the evidence piled up? And now, here they come, riding in, after Mac’s gone and the smoke is rising from the wreck? To do what, exactly–scrawl out the chalk lines around the corpse, maybe?
Worthless.
No, I take it back, in this particular situation, it would appear that they would have had to make dramatic improvements to be merely worthless.
What earthly good is a watchdog that doesn’t bark? (Edited to add: Except as a pet; I love dogs.) An organization that finds wrongdoing and keeps it to themselves doesn’t benefit anyone but the wrongdoer. The Evangelical Council for Financial Accountability no longer appears to serve donors to its member churches, if it fails to report when members are out of compliance.
Well, the ECFA president earns $250k/yr and three VPs get around $140k/yr, but I doubt that’s the type of good your referring to…
ECFA helps keep government regulatory agencies off the backs of evangelical churches. Without a group like ECFA there would be more political pressure to better police churches and protect citizens from church fraud. ECFA serves its purpose by hoodwinking the peons while enabling the rich and powerful to exploit. Ahh capitalism and greed at its finest.
ECFA helps keep government regulatory agencies off the backs of evangelical churches. Without a group like ECFA there would be more political pressure to better police churches and protect citizens from church fraud. ECFA serves its purpose by hoodwinking the peons while enabling the rich and powerful to exploit. Ahh capitalism and greed at its finest.
Sigh. There are too many organizations like that.
Their slogan is “Enhancing Trust in Ministries” and a cynic could argue that is exactly what they’ve been doing–by providing cover and a veneer of responsibility for ministries who are anything but.
The French were much less gullible about what these people really are during their revolution, and nationalized all the churches appropriately.