Charity – Page 8 – Warren Throckmorton

Gospel for Asia's 2014 Audit is Late

Member organizations with of the Evangelical Council for Financial Accountability with are supposed to file renewal documents each year. When those documents are due depends on when the fiscal year ends.

The renewal information is due by January 31 if your fiscal year ended on April 1 through September 30.
The renewal information is due by July 31 if your fiscal year ended on October 1 through March 31.

Gospel for Asia in the U.S. operates on a calendar year schedule so their renewal was due July 31. As a part of the renewal, an audited financial statement is required. However, I have learned that GFA’s audited statement for 2014 is not complete. Those who inquire about the 2014 audited statement are getting this reply:

Currently, we do not have 2014 finance reports ready yet, as our auditors are in the process of auditing GFA’s 2014 year.

This means that GFA’s renewal is incomplete. However, not to worry, the ECFA gives member organizations an automatic two-month extension.

Financial Statements Policy

Current members should submit financial statements with the Annual Membership Renewal (AMR) by the due date. However, occasionally members are unable to supply the financial statements on a timely basis for a variety of reasons. ECFA will evaluate the reason for the delay, balancing a desire to help an organization through a possibly difficult situation not of its own making, and the necessity of maintaining standards to protect the integrity of ECFA, through the timely submission of information.
Policy

Financial statements.Financial statements should accompany the AMR when it is due. (This provides the member a minimum of four months from the end of their fiscal year end to obtain the required financial statements.)

Two-month extension.If all other AMR materials are submitted on time, an automatic two-month extension to submit the financial statements will be granted.

Additional extensions.Members unable to meet the two-month extended deadline will generally be granted an additional two-month extension if the extension does not exceed 12 months from the end of the fiscal year. A request for this extension must include an explanation of the status of the audit, the reason for the delay, and the expected date of completion.

However, renewals can still be processed and that seal can still be displayed as long as the fees are paid.

Our financial statements are not complete. What should we do? Although your financial statements are due along with your renewal form, if they are not available, complete the renewal form without them (we understand the financial section of the renewal form will be incomplete). You will be asked to provide an approximate date the financials will be available and also to estimate your total cash contribution in order to estimate your membership fee. Once financials are finalized, please forward a copy to ECFA or to href=”mailto:[email protected]”>[email protected]. We will complete the financial section and refund or invoice for any payment difference. If the financials are complete but the Form 990 is not, please submit the renewal form and financials and send the Form 990 when complete.

Last year, the audited statement was dated June 13, 2014.
Regular readers can probably guess about why the audit is late.
While I appreciate that the ECFA’s audit requirement puts some pressure on an organization to disclose important information, at the same time, I believe the ECFA should flag those organizations which have not turned in the documentation. If donors rely on ECFA, they won’t know that after months of not answering legitimate questions, GFA hasn’t turned in an audited statement of their 2014 finances, even though GFA has had over 7 months to do so.

Gospel for Asia Canada Gets C- From Canadian Charity Watchdog Organization

Charity watchdog Charity Intelligence Canada has given Gospel for Asia Canada a C- “based on the charity’s public reporting of the work it does and the results it achieves.” Beginning in 2012, CIC rated 453 charities operating in Canada on the following dimensions:

Charity Intelligence scored charities on answers to 26 questions covering strategy, activities, outputs, outcomes, and learning. We modeled the scorecard on charity sector resources developed by the Canadian Institute of Chartered Accountants, New Philanthropy Capital in the UK, Global Reporting Initiative, and Queen’s University Centre for Governance.
Charity Intelligence used a matrix of questions focusing on how well a charity reported:
1. The problem it addresses (Problem/Need)
2. The programs and services it provides to fix the need (Activities)
3. Quantifying its programs and services (Outputs)
4. The results it achieves (Outcomes)
5. The reliability and clarity of reporting (Quality)
6. The learning and changes made (Learning)
Ci scored charities in these six areas and covered seven indicators: timeliness, balance, consistency, clarity, reliability, forward-looking, and accuracy. The final score is a measure of the charity’s social reporting. This scoring does not assess the strategy, the quality of activities, the level of outputs or the impressiveness of outcomes. All it does is assess if enough information has been disclosed, such that any reader would have the opportunity to make those assessments.

I have been asserting since May of this year that Gospel for Asia has refused to disclose basic information regarding their operations and financial dealings. As this rating demonstrates, GFA doesn’t rate well on providing donors with sufficient information to assess the accuracy of GFA’s claims.
According to CIC, the C- rating puts GFA in the bottom 20% of organizations rated (for the sake of comparison, World Vision gets a B+).

Weeks have gone by and no one from Gospel for Asia has explained why GFA India auditors have not disclosed Canadian donations on government reports. In Canadian reports, GFA Canada disclosed that it sent $15 million dollars (CAD) to India but this is not disclosed as required on Indian reports. Donations from other countries (e.g., United States, Germany, Australia, etc.) are disclosed but the funds sent from Canada are not.

Gospel for Asia Changes Bridge of Hope Website, Raises More Questions

Yesterday, I posted the following image from Bridge of Hope’s Indian website (Bridge of Hope is Gospel for Asia’s child sponsorship program):

This was what was on the website as of late afternoon yesterday (see today’s Google cache for the page as it appeared on August 8).
Today, it looks like this:

Shades of Mars Hill Church and Mars Hill Global! GFA won’t respond to questions from me but they will alter a website in an apparent response to my post. Mars Hill Church did the same thing when I pointed out issues related to solicitations for missions.
While the children one may sponsor do not appear to be the same on these pages, the program is the same. This new wording could still lead a reader to think only Indians are funding Indian children. According to figures I have seen, Americans donated about $14 million in 2012 toward BoH related work (the latest year I have available). Clearly, donations from sponsors outside of India are accepted for the BoH program. However, if one wants to sponsor a child and doesn’t live in India, one must go to the GFA BoH page to do so.
Given that American donors are putting so much money into this program, it seems pointless to try to obscure it — if indeed that is what GFA intends by the answer to this frequently asked question.

Franklin Graham's Salary is Again in Media Spotlight

The Charlotte Observer on Saturday posted an article about Franklin Graham’s salary from his two organizations the Billy Graham Evangelistic Association and Samaritan’s Purse. The bottom line is that Graham makes a lot more than executives who run much larger organizations.
In 2010, Graham took no salary from BGEA but began receiving salary from BGEA again in 2011. Now, he is at almost $900k from both non-profits.
In 2009, Graham said his compensation “looks terrible” because it was so high. After getting kudos for taking a self-imposed reduction, he now is closing in on that terrible zone again.

Gospel for Asia and ECFA: Is Reporting Information About An Organization Harassment?

Gospel for Asia has not answered any requests for information from me since May 7. GFA’s COO David Carroll told me my questions had become too frequent and numerous for them. Former donors have also asked many of the same questions I have asked. Many former donors have written to tell me that GFA representatives said the Evangelical Council for Financial Accountability advised GFA not to talk to me. I have seen evidence that GFA is internally telling staff that they refuse to answer questions from me at the advice of ECFA. That would not be surprising since ECFA has not responded to my questions for months.
If indeed ECFA is advising a member organization not to answer questions from me, what could be the reason? I will address a possible rationale in a moment. However, before I do, it is worth asking GFA publicly: why won’t you answer questions from donors? Former donor and Canadian pastor Bruce Morrison asked you many questions about discrepancies between U.S. records and Indian reports. You didn’t answer them. He and his church supported GFA for 20 years. Former donor and blogger Jimmy Humphrey supported GFA for years until recently. However, he told me you didn’t have any answers when he wanted to know why discrepancies exist between U.S. and Indian records. GFA sent him a form letter but no specific answers. I have heard similar stories from over a dozen former donors; some of them are posting at the Phoenix Preacher blog (see the comments section of this post).
Now about GFA’s silence in response to my questions:
The ECFA has a guideline called Transparency. Generally, it encourages organizations to be open about their dealings and specifies that ECFA member organizations must provide an audited financial statement upon request. GFA provided me with a copy of that statement when I asked back in April. This is the one area where compliance with ECFA guidelines has been advantageous. If the ECFA sticks by its own rules, the 2014 audited statement should be available soon because it was due to be filed with ECFA by July 31.
An aspect of the Transparency guideline gives a member organization a loophole for disclosure of the audited statement. If the organization deems that the request is part of a harassment campaign, then the group is exempt.

Harassment campaign. An organization may be exempted from the requirement to provide a copy of its financial statement if ECFA determines that the organization is the subject of a harassment campaign, the requester is part of that campaign, and compliance with requests that are part of that campaign are not in the public interest.
What constitutes harassment? A group of requests for an organization’s documents is indicative of a harassment campaign if the requests are part of a single, coordinated effort meant to disrupt the operations of the organization rather than to collect information about the organization.

In ECFA speak, this exemption applies to requests for audited financial statements and is based on IRS guidance about disclosure of a tax exempt organization’s 990 form. Since tax exempt groups are supposed to operate for the public benefit, public accountability is served by the government requiring non-profits to file a disclosure of income and expenses via the 990 form. However, GFA doesn’t file a 990 since the organization is considered a religious order by the IRS.
The ECFA spells this out to members in a document on their website which provides the relevant IRS guidance. Reviewing the IRS guidance, it becomes clear that ECFA has adapted IRS language to their guideline for disclosure of financial statements. Organizations are not required to provide 990 forms under the following circumstances:

§ 301.6104(d)–3 Tax-exempt organization subject to harassment campaign. (a) In general. If the district director for the key district in which the [26 CFR Ch. I (4–1–06 Edition)] organization’s principal office is located (or such other person as the Commissioner may designate) determines that the organization is the subject of a harassment campaign and compliance with the requests that are part of the harassment campaign would not be in the public interest, a tax-exempt organization is not required to fulfill a request for a copy (as otherwise required by § 301.6104(d)–1(a)) that it reasonably believes is part of the campaign.

What defines harassment?

(b) Harassment. A group of requests for an organization’s application for tax exemption or annual information returns is indicative of a harassment campaign if the requests are part of a single coordinated effort to disrupt the operations of a tax-exempt organization, rather than to collect information about the organization. Whether a group of requests constitutes such a harassment campaign depends on the relevant facts and circumstances. Facts and circumstances that indicate the organization is the subject of a harassment campaign include: a sudden increase in the number of requests; an extraordinary number of requests made through form letters or similarly worded correspondence; evidence of a purpose to deter significantly the organization’s employees or volunteers from pursuing the organization’s exempt purpose; requests that contain language hostile to the organization; direct evidence of bad faith by organizers of the purported harassment campaign; evidence that the organization has already provided the requested documents to a member of the purported harassing group; and a demonstration by the tax-exempt organization that it routinely provides copies of its documents upon request.

The IRS does not require non-profits to answer endless requests for the same form from coordinated sources. Doing so would take up too much time and resources and might be designed to disrupt the organization’s functioning. Even so, an organization cannot simply declare itself the subject of a harassment campaign and be free from the disclosure requirement. The organization has to request a determination by the IRS within 10 days of the organization’s leaders believing the organization to be the subject of a harassment campaign. According to the guidelines:

(d) Harassment determination procedure. A tax-exempt organization may apply for a determination that it is the subject of a harassment campaign and that compliance with requests that are part of the campaign would not be in the public interest by submitting a signed application to the district director for the key district where the organization’s principal office is located (or such other person as the Commissioner may designate).

To my knowledge, Gospel for Asia has not requested any such determination. You can read the rest of the procedure at this link (page 91).
Clearly, none of this applies to media, public, or donor requests for information about financial dealings. Neither the IRS nor the ECFA guidelines advise or allow a public charity to ignore questions about public documents (audited statements, reports filed with the Canadian and Indian governments) already filed by the organization. If indeed the ECFA advised a Christian ministry to refuse to answer questions about finances from other Christians, then we have a whole new way of defining “evangelical financial accountability.”
In the Public Interest
Let’s make this very clear. There is no harassment campaign. GFA did not try to work with me as one GFA representative said according to former donor Jimmy Humphrey. There is no reason in the public interest either here or in India for GFA to hide information or fail to answer questions about discrepancies in financial reports available freely to the public. There is no reason in the public interest for the ECFA to advise their member organizations not to talk to me or any other writer.
If anything is true, it is that GFA has operated in such a way as to thwart the public’s interest in knowing how tax exempt donations are spent. For instance, without brave former staffers disclosing the money smuggling to India, the public wouldn’t know that, GFA, a tax exempt religious order, conducted business in violation of its own standards and possibly U.S. Customs law. GFA began by telling staff that the procedure was legal and they cleared it with their auditors. Later, ECFA told Christian Today that GFA was seeking “legal counsel” to determine “remedial measures”:

It confirmed that GFA had sent cash with individuals travelling to India, but said that it had “stopped this practice entirely, and is working with legal counsel to determine appropriate remedial measures, if any”.

If the practice is legal and cleared with auditors Bland Garvey, why check with lawyers?
Maybe there are good answers for every question. If so, the public interest demands that GFA answer them. If not, then whose interest is served by silence?