Tag: ECFA

Mars Hill's Compensation Process and ECFA Guidelines

Recently, Wenatchee the Hatchet posted a memo from Sutton Turner regarding Mark Driscoll’s salary recommendations. In the August 2012 memo, Turner wrote:

I would like to put forth a recommendation to raise Pastor Mark Driscoll’s salary to$650,000 for financial year 2013 based on the following:

Turner then made a case to the compensation committee for Driscoll to receive a substantial raise for FY 2013. He also indicated in the memo that he was the only person outside of the compensation committee who knew Driscoll’s salary.
I submit that Turner’s activity violated at least the spirit of the guidelines of the Evangelical Council for Financial Accountability. Regarding the setting of compensation, the ECFA guidelines state:

1. The board or an authorized committee of the board shall make the decision regarding total compensation, and those participating in the decision-making process may not have any conflict of interest in the decision, whether direct or indirect. That is, no person in the decision-making process may:
a. be related to the person whose compensation is being addressed,
b. be subordinate to the person whose compensation is being set,
c. be a person whose compensation is determined in a manner that involves input or decision-making by the person whose compensation is being set, or
d. otherwise have a conflict of interest.

Determining the extent of the violation hinges on a definition of “decision making process.” It could be argued that Turner had no part in the decision and therefore did not violate the guidance. I would argue however that recommendation and advocacy to the compensation committee was a conflict of interest for Turner who served at Driscoll’s pleasure. Information gathering is part of the decision making process and should be done by the compensation committee. Turner had intimate knowledge of the process, participated in it, and was the only staff person who knew the facts. If the ECFA guidance permits this kind of participation, then the value of the guidance is again called into question.
One could also argue that this memo was written before Mars Hill was accredited. However, did the process continue over the remainder of Driscoll’s time at Mars Hill? If so, it seems to me that the ECFA should at least investigate the role of subordinates in the setting of compensation for FY 2014 and the current year which most likely forms the basis for Driscoll’s severance package.
 
 

Mars Hill's Non-Disparagement Clause, the Attorney General, and Blowing Whistles in ECFA Organizations

For a long time, Mars Hill Church used non-disclosure and non-disparagement clauses to keep departing staff and pastors quiet about problems at the church. As it turns out, the church might have been violating Evangelical Council for Financial Accountability guidance in yet another way by the used of what former pastor Dave Kraft called a “gag order.” The ECFA provides a template for a church whistleblower policy. If the guidance in this policy (and elsewhere) is observed, whistleblowing should not lead to adverse consequences. However, former employees have described intimidation and threats and so it is clear that the ECFA guidance has not been followed.
Even though, the ECFA has been a paper tiger throughout the many revelations about Mars Hill, the guidance is worth examining. The ECFA provides a sample policy that churches such as Mars Hill can use. I am open to correction but I have not heard from any former pastor or employee that such information was ever communicated. The policy begins:

SAMPLE POLICY FOR A LARGER CHURCH

Policy on Suspected Misconduct, Dishonesty, Fraud, and Whistle-blower Protection
XYZ Church is committed to the highest possible standards of ethical, moral, and legal conduct. Consistent with this commitment, this policy aims to provide avenues for employees to raise concerns about suspected misconduct, dishonesty, and fraud and to provide reassurance that they will be protected from reprisals or victimization for whistle-blowing in good faith.

A reporting procedure is suggested:

Reporting
Employees and any other person who has a concern relating to suspected misconduct, dishonesty or fraud may make a report. The XYZ Church wants to hear of possible problems in these areas.
Concerns or suspected misconduct, dishonesty or fraud may be reported by telephone, email or regular mail, at the employee’s or reporter’s preference:
An employee may telephone: (—) — —-. We have retained an independent company to receive calls and descriptions of possible issues. Reports they receive will be forwarded to the Chairman of the Audit Committee.
An employee can email directly the Chairman of the Audit Committee at: _________.
An employee may write a letter to the Chairman of the Audit Committee at the following address:

The organization must provide a safe environment for blowing the whistle:

SAFEGUARDS

No Retaliation
No pastor, officer, or employee or other person who in good faith reports a violation shall suffer harassment, retaliation or adverse employment consequence. An employee who retaliates against someone who has reported a violation in good faith is subject to discipline up to and including termination of employment. This policy is intended to encourage and enable employees and others to raise concerns within the organization prior to seeking resolution outside the organization.
Additionally, no employee shall be adversely affected because they refuse to carry out a directive which, in fact, constitutes corporate fraud, or is a violation of state or federal law.
Confidentiality
Violations or suspected violations may be submitted on a confidential basis by the complainant or may be submitted anonymously. Reports of violations or suspected violations will be kept confidential to the extent possible, consistent with the need to conduct an adequate investigation. Every effort will be made to protect the complainant’s identity.

This policy relates to people on the job. However, all former Mars Hill employees I have spoken with tell me that they never felt safe to press their questions or concerns very far. When Dalton Roraback asked questions about salaries and other financial matters, he was relieved of his position. Where was the ECFA when this happened?
According to the sample policy, there are clear issues at Mars Hill which could have been reported internally:

For purposes of this policy, the definition of misconduct, dishonesty, and fraud includes but is not limited to:

  • Acts which are inconsistent with ministry policy

  • Theft or other misappropriation of ministry assets

  • Misstatements or other irregularities in ministry records

  • Incorrect financial reporting

  • Misuse of ministry resources

  • Illegal activities

  • Immoral or unbiblical activities

  • Forgery or alteration of documents

  • Any other form of fraud

The Global Fund bait and switch, Result Source, year end offerings which were actually “hail Mary” offerings to bail out the general fund, using ministry funds to further Mark Driscoll’s book marketing, etc., are all issues that aroused concerns among staff and pastors.
As noted, the guidance above is aimed at existing employees. What about former employees? Recently, the ECFA removed two pages with guidance for the public (which would include former employees) from the organizational website. However, for now, a short section of guidance is on the FAQs page:

How does ECFA handle complaints?

Every day, ECFA receives inquiries from the public regarding ECFA member organizations. Occasionally, ECFA receives communication asserting inappropriate conduct on the part of a charity. We believe you should contact the ministry directly in an attempt to get a satisfactory answer from the ministry. Misunderstandings may easily be clarified with a telephone call, email or letter.
As a membership organization, ECFA will only accept complaints against member organizations. (Complaints against nonmember organizations should be directed to the state attorney general’s office.) The complaint should be in writing and signed. A request for anonymity will be honored. ECFA will be happy to discuss complaint issues over the phone, but will be unable to initiate any action based on a verbal complaint alone.
Complainants should identify the member organization and the standard violated. ECFA addresses and works through all complaints received. However, since membership is based on adhering to our Seven Standards of Responsible Stewardship™, ECFA can only take action against a member organization if it is shown that the ministry violated an ECFA standard.
Credible complaints relating to an ECFA Standard against member organizations will be investigated thoroughly. Complainants, however, must be aware that ECFA, through its Standards Committee and Board of Directors, interprets ECFA Standards, makes judgments relating to compliance with those standards, and determines a course of action if noncompliance is revealed. ECFA will not take punitive action in cases when it is not warranted.

What is the procedure for making a complaint or raising a concern about an ECFA member?

We believe you should contact the organization directly in an attempt to resolve the matter. Misunderstandings may easily be cleared up with a telephone call, email or letter.
If the matter cannot be handled by directly contacting the ministry, ECFA will accept a complaint against a member organization if the complaint is in writing and signed. If requested, your identity will be protected.
ECFA asks that the complainant identify a possible standard the ministry violated. ECFA addresses and works through all complaints received. However, since membership is based on adhering to our Seven Standards of Responsible Stewardship™, ECFA can only take action against a member organization if it is shown that the ministry violated an ECFA Standard. (emphasis added)

If an organization is not an ECFA member, the ECFA directs the public to the Attorney General’s office. This appears to be a subtle warning to non-member organizations. If you are not a part of the ECFA, complaints should go to the AG’s office.
As we have learned complaints to the ECFA don’t go very far. Partly as a consequence of the ECFA inaction and silence, some may now go to the AG in Washington. Joel Connelly, a Seattle Post-Intelligencer columnist, has called on the Washington AG’s office to investigate Mars Hill’s fundraising. At least one person who contacted the AG’s office was told that the office would investigate complaints against the church. I am aware of former members who have filed complaints.
In the end, the church may face the same consequences as if it had not been an ECFA member organization. One could make a case that this is fitting since they ECFA has not been transparent about the enforcement of its own standards with Mars Hill.
 
 

ECFA Guidance: a Year's Severance Pay is "Highly Unusual"

I reported yesterday that the terms of Mark Driscoll’s arrangement with the church upon termination that I have seen involve the provision of base salary and benefits for a year. If indeed these are the arrangements in force, then the Evangelical Council on Financial Accountability may have yet another reason to review Mars Hill Church’s practices. According to an article on church employees and severance pay on the ECFA website, a year’s severance is “highly unusual.”

How Much Severance Pay Should be Paid?
No bright line rule exists for determining what how much severance pay to provide. The main concern should always be proper stewardship of the church’s financial assets in furtherance of the church’s religious purposes. If a long-term employee is leaving the church, it may be a very appropriate quid pro quo payment to provide generous severance. If a contentious pastor leaves, the church leaders may feel forced to provide extensive severance as a risk management decision. Generally, provision of a few weeks to a few months of severance pay should deemed reasonable under many circumstances. In contrast, a year’s worth of severance pay would be viewed as highly unusual and therefore would warrant extensive due diligence and substantiation to justify such a large severance package.

I realize that “no bright line rule exists” but since the ECFA guidance is there, I suspect it will be of interest to Mars Hill stakeholders.

Petition Asks Evangelical Council for Financial Accountability to Suspend Mars Hill Church

GlobaFundA petition posted today “Mars Hill Church – Walk in the Light” at Change.org asks the Evangelical Council for Financial Accountability to suspend the membership of Mars Hill Church. The petition specifically points to a memo on Mars Hill’s Global Fund which planned to use “highly visible” mission projects as a draw to gain donations which were mostly used to support Mars Hill’s expansion and current expense spending. Very little actually went to missions according to the church, although Mars Hill leaders will not disclose details about how much went to missions and how much to fund current expenses.
The petition states:

Despite numerous scandals of confirmed deception to donors Mars Hill Church points to its ECFA standing to assure donors of its accountability and transparency. This is misleading donors and frustrating members and ex-members who are calling for financial questions to be answered.

The statements of support for the petition are quite strong. Alexa Shelley wrote:

I am an attorney for an ECFA-accredited organization. We are proud of our ECFA accreditation status and, I believe, it is important to many of our donors. For Mars Hill with its questionable accounting practices and complete lack of financial transparency to remain accredited only calls into question the meaning or value of any ECFA accreditation, including that of my organization. Frankly, if ECFA sits back and does nothing, in my opinion, it will devalue the ECFA accreditation of all accredited organizations…

Susan Gingrich:

I’m signing because it’s time for the Church to get its own house in order before the IRS does. ECFA is not doing its job and does the evangelical world no favors by looking the other way in the glaring light of Mars Hill’s obvious failure to walk in a manner worthy of the Gospel in its financial (and likely other) affairs.

Benjamin Dennison:

Using promo videos of foreign locations to get people to give to “missions”, while spending nearly all the money raised for U. S. buildings and keeping the exact amount secret (as revealed in a recent internal memo), is a disgusting and immoral practice. Mars Hill needs to own up to exactly what was planned and done with the Mars Hill Global Fund, and promise transparency going forward.

Current Mars Hill Pastors Express Concerns About Issues Covered By ECFA Guidelines

In the letter released today by nine current Mars Hill pastors (actually one former pastor, and 8 current; one was let go today – more on that later today), the pastors referenced concerns about the handling of the Mars Hill Global Fund, among several other issues of transparency.

…there is no dearth of examples in the last two years of very questionable transparency and truth-telling, including the Mars Hill Global Fund, Result-Source, Strange Fire, ghost-writing/plagiarism, explanations for staff transition, the resignations of BOAA members, etc.

Knowing that current pastors question the church’s handling of the fund and the transparency surrounding several issues raises anew questions about the value of accreditation by the Evangelical Council on Financial Accountability. The ECFA’s Guideline 5 states:

Every organization shall provide a copy of its current financial statements upon written request and shall provide other disclosures as the law may require. The financial statements required to comply with Standard 3 must be disclosed under this standard.

An organization must provide a report, upon written request, including financial information on any specific project for which it sought or is seeking gifts.

There is also Guideline 7.1, Truthfulness in Communications:

Current. An appeal for charitable gifts should only contain information that is specifically relevant to the purpose of the appeal. Using pictures, videos, descriptions, narratives, or other information from prior projects or events—which suggests a misleading relationship with the current appeal—is a violation of this standard. The prospective giver will assume that all of the information presented relates to the specific appeal. It is inappropriate to use “old” information in a current appeal simply because it might bring a “better” response from a giver.

And then:

Summary.  Questions about truthfulness in communication can best be answered by asking these questions:

  • “Will all of the text, photographs, videos, or other information included in this appeal lead the prospective donor to a current, complete, and accurate understanding of the facts surrounding the appeal?”

  • “Does this appeal communicate all of the information I would want to know if I were a prospective donor deciding whether or not to respond to the appeal?”

  • “Does this communication bear witness that we are trusting God to move in the hearts of our supporters, and we are not trying to manipulate their feelings by the way we portray our work or report its outcomes?”

The current pastors are not specific but include the Global Fund in their list of not very transparent, not very candid items. Clearly, people watching the Global videos in late 2012 through 2014 would have thought the money was going to Ethiopia and India since 22 of 25 pertained to mission work.
At least one former staffer has gone on record with questions about adherence to the guidelines, now we have current pastors expressing their lack of confidence in the public presentation of a variety of issues which are relevant to the ECFA guidelines. Perhaps the call for transparency should extend beyond Mars Hill Church.