World magazine’s Warren Smith has an article out today which provides some additional information regarding the Evangelical Council for Financial Accountability’s termination of Gospel for Asia’s ECFA membership.
According to Smith’s reporting, the lack of disclosure surrounding the $40+ million headquarters was key. As I first reported here, GFA failed to disclose the $19.8 million transfer of cash from Believers’ Church to help complete GFA’s new Wills Point, TX headquarters. This cash was not reported as a related party transaction but as an anonymous donation. GFA’s leaders told staff that the organization would not borrow money for the construction but in fact did borrow money from a U.S. bank in 2014 and then took money which Believers’ Church borrowed from an undisclosed source in India.
GFA’s CFO David Carroll said ECFA changes had been made and hopes to regain membership. I will have more to say about this in coming posts.
According to World, Ministry Watch’s Rusty Leonard has advised donors to halt all donations to GFA due to the extent of the problems.
Look for another article on this news from Christianity Today. Spokespeople for the magazine disclosed via multiple channels that an article is coming.
Category: ECFA
What Termination from ECFA Means for Gospel for Asia
Word out of Wills Point, TX (GFA’s HQ) is that GFA’s leadership is hoping to find a friendly reporter to bring forth a puff piece which will minimize the importance of losing membership in the Evangelical Council for Financial Accountability.
That may be a hard sell.
In the past, GFA has relied on ECFA membership as a means of proving their financial integrity. To illustrate, consider these prior statements:
As members of the @ecfa you can trust us when we say 100% of what you give goes to the field! http://t.co/M0OlOzrFna
— Gospel for Asia (@GospelforAsia) June 7, 2014
When GFA’s CFO David Carroll last wrote to me on May 7, 2015, he defended GFA by claiming that GFA adhered to ECFA’s guidelines:
Warren,
No, Gospel for Asia has not violated the law.
When you first contacted us, I mentioned that we would not be able to respond to every question you put before us. Now, with the increased volume and frequency of your questions, it has become clear that this back and forth has become a distraction from our mission work. For this reason, this will be my final response. We understand that you will continue to explore issues around Gospel for Asia and continue to be fed accusations from former employees, and we accept that.
We continue to remain accountable to all applicable laws and regulations, to the Evangelical Council for Financial Accountability and to independent auditors.
Sincerely,
David
Apparently, ECFA now disagrees that GFA was accountable.
Prior to Friday, the GFA website proclaimed:
What does it say about GFA that the seal may no longer be displayed?
By the way, I don’t look for the other seal to be there much longer.
For all articles on Gospel for Asia, click here.
Evangelical Council for Financial Accountability Terminates Gospel for Asia's Membership
Just today the Evangelical Council for Financial Accountability posted notice that they have terminated Gospel for Asia from ECFA membership due to failure to comply with multiple ECFA standards. GFA was a charter member of the ECFA, having joined in 1982.
The reasons for termination are listed on the ECFA former member page:
This is a major development in this story and represents enforcement action one rarely sees from the ECFA.
GFA told Mark Woods at Christian Today that the ECFA review of GFA would be done sometime in October and that GFA would then answer all outstanding questions.
The lack of compliance involves the following ECFA standards:
Standard 2 – Governance
Every organization shall be governed by a responsible board of not less than five individuals, a majority of whom shall be independent, who shall meet at least semiannually to establish policy and review its accomplishments.
Standard 3 – Financial Oversight
Every organization shall prepare complete and accurate financial statements. The board or a committee consisting of a majority of independent members shall approve the engagement of an independent certified public accountant, review the annual financial statements, and maintain appropriate communication with the independent certified public accountant. The board shall be apprised of any material weaknesses in internal control or other significant risks.
Standard 4 – Use of Resources and Compliance with Laws
Every organization shall exercise the appropriate management and controls necessary to provide reasonable assurance that all of the organization’s operations are carried out and resources are used in a responsible manner and in conformity with applicable laws and regulations, such conformity taking into account biblical mandates.
Standard 7 – Stewardship of Charitable Gifts
7.1 Truthfulness in Communications
In securing charitable gifts, all representations of fact, descriptions of the financial condition of the organization, or narratives about events must be current, complete, and accurate. References to past activities or events must be appropriately dated. There must be no material omissions or exaggerations of fact, use of misleading photographs, or any other communication which would tend to create a false impression or misunderstanding.
VIEW COMMENTARY
7.2 Giver Expectations and Intent
Statements made about the use of gifts by an organization in its charitable gift appeals must be honored. A giver’s intent relates both to what was communicated in the appeal and to any instructions accompanying the gift, if accepted by the organization. Appeals for charitable gifts must not create unrealistic expectations of what a gift will actually accomplish.
VIEW COMMENTARY
I am surprised that Standard 5 was not also mentioned since GFA has not produced an audited financial statement for 2014.
Additional Information:
GFA’s charter member profile on ECFA’s website (Google cache)
GFA’s characterization of the meaning of ECFA membership (Google cache):
The ECFA seal is tangible evidence to donors that a ministry is complying with the highest standards of Christian ethics in its governance, fundraising and financial accounting and reporting.
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 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.