Tag: Evangelical Council for Financial Accountability

Does Membership in the Evangelical Council for Financial Accountability Benefit Donors?

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 will 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.

Mars Hill Church and the Evangelical Council for Financial Accountability, Part One

On March 7, Mars Hill Church’s Board of Advisors and Accountability issued a statement about several matters of controversy involving Mark Driscoll and the church. One issue was the change of governance in 2007. The BOAA said:

CHANGES TO GOVERNANCE

For many years Mars Hill Church was led by a board of Elders, most of whom were in a vocational relationship with the church and thus not able to provide optimal objectivity. To eliminate conflicts of interest and set the church’s future on the best possible model of governance, a Board of Advisors and Accountability (BOAA) was established to set compensation, conduct performance reviews, approve the annual budget, and hold the newly formed Executive Elders accountable in all areas of local church leadership. This model is consistent with the best practices for governance established in the Evangelical Council for Financial Accountability standards. Mars Hill Church joined and has been a member in good standing with the ECFA since September of 2012.

The BOAA invoked the Evangelical Council for Financial Accountability. At the time the BOAA statement came out, I initiated several contacts with ECFA’s president, Dan Busby. I learned that Mars Hill Church is a member in good standing and that ECFA considers Mars Hill to be in compliance with ECFA guidelines. This puzzled me since it appeared to me from a reading of the Mars Hill bylaws that the executive elders are allowed to vote on their own compensation. Such a practice, if happening, would be in violation of ECFA guidelines. I asked Mars Hill’s Communications Director Justin Dean about this with no answer. Mr. Busby declared that MHC was in compliance, but declined to explain his reasons. His most recent words to me on the subject were:

I can only say that we have very carefully reviewed this matter and we are absolutely confident of the compliance of Mars Hill with our standards with respect to this issue.  More detailed information on this would need to come from the church.

This is an unsatisfying answer. I expected a bit more from an organization which is set up as an accountability group. This answer says – we can’t tell you why, but just trust us and trust Mars Hill. For their part, Mars Hill Church is one of the most frustrating organizations I have ever dealt with. They do not acknowledge legitimate questions from media and often engage in spin when they do speak. They have threatened employees not to disclose information while employed and thereafter as well.
I asked Nicholas Romanello, a lawyer whose practice includes considerable experience in not-for-profit governance and who is a trustee of a religious school in West Palm Beach, FL for his opinion. After he reviewed the MHC bylaws, I asked Romanello if the bylaws allow the executive elders to vote on their own compensation. He said their actual practice isn’t clear from the bylaws. On the other hand, he said, “There is nothing in the bylaws I looked at which would prevent this. They might have a board policy which would prevent it, but the bylaws would allow it.”
Eventually, I found this statement on the MHC website:

The independent members of the Board of Advisors and Accountability set executive elders’ compensation. Additionally, an independent compensation study is done for our executive elders by an external accounting firm.

This statement seems to address the matter. Although the bylaws do not require the compensation to be set by the members alone, the website claims they are handling it in a way that meets ECFA guidelines. If that is how it is being handled, then Busby’s confidence would be correct on that point. Nevertheless, for other reasons, I am still not convinced that Mars Hill is in compliance on all points.  More specifically, I wonder if all of the independent members of the BOAA meet the ECFA’s criteria for independence.
The ECFA defines independence as follows:

Board independence.  The organization should take care to maintain the reality, not just the appearance of independent board governance. Requiring the predominance of independent board members helps ensure the board will take official action without partiality, undue influence, or conflict of interest.
To assess the reality of board independence, ECFA looks beyond the majority of independent board members on the board roster. ECFA is just as concerned about the reality of board independence as with the mathematical determination of a majority of independent board members.
ECFA defines independent board members as:

  1. Persons who are not employees or staff members of the organization.
  2. Persons who may not individually dictate the operations of the organization similar to an employee or staff member. A person who is an uncompensated CEO, for instance, is not independent.
  3. Persons who are not related by blood or marriage to staff members or other board members. Blood or marriage relationships are defined for the purposes of the standard as being his or her spouse, ancestors, brothers and sisters (whether whole- or half-blood), children (whether natural or adopted), grandchildren, great-grandchildren, and spouses of brothers, sisters, children, grandchildren, and great-grandchildren.
  4. Persons who do not report to or are not subordinate to employees or staff members of the organization.
  5. Persons who do not report to or are not subordinate to other board members.
  6. Persons who do not receive a significant amount for consulting or speaking, or any other remuneration from the organization.
  7. Persons who do not have relationships with firms that have significant financial dealings with the organization, officers, directors or key employees.
  8. Persons who are not the paid legal counsel, related to the paid legal counsel, or are employed by the firm that is the paid legal counsel of the organization.
  9. Persons who are not the auditors, related by blood or marriage to the auditors (see definition of blood or marriage in #3 above), or are employed by the auditing firm of the organization.

Given the size of the board, only one member who is not truly independent could create a majority voting bloc (one independent and three executive elders).  Mars Hill is run by the BOAA so the entire church is dependent on four people (Michael Van Skaik, Larry Osborne, James MacDonald, and Paul Tripp) who do not attend Mars Hill and the three executive elders (Mark Driscoll, Sutton Turner and Dave Bruskas). According to sources within MHC speaking on condition of anonymity, there may be some issues with the current BOAA on points 6 and 7.
Regarding point six, James MacDonald and Paul Tripp are speaking at this year’s Resurgence conference and have spoken at other Mars Hill events in the past. According to my sources, they get around $5k for a brief session, plus whatever book sales bring in.
On points six and seven, Michael Van Skaik’s consulting firm relationship with Mars Hill could be relevant. I have spoken to two former leaders who were coached by people from Van Skaik’s firm. If indeed all pastors were/are mentored by coaches from Van Skaik’s group, than that would have to be a significant contract.
James MacDonald deserves additional mention. MacDonald is the pastor Harvest Bible Church based in the suburbs of Chicago. As noted, he is speaking at this year’s Mars Hill Resurgence conference and has spoken at previous conferences. MacDonald and Driscoll moderated some of the Elephant Room discussions and are co-founders of Churches Helping Churches, a benevolent non-profit organization helping churches hit by disasters. They are currently on the board together. MacDonald was with Driscoll at John MacArthur’s Strange Fire conference. They certainly appear to be friends, peers and co-workers which could complicate the independence aspect of the BOAA role.
I realize that my concerns may be completely misplaced. Perhaps the fees or other compensation might not be considered “significant” by the ECFA or Mars Hill. Perhaps my sources are incorrect about the fees. There may be circumstances which make these apparent issues of no consequence. However, given the ECFA’s vague “trust us” responses, the ECFA’s tight definition of independence, the lack of information from MHC, and the small size of MHC’s BOAA, I think these matters are worth considering.
If Mars Hill truly is in compliance with what ECFA considers to be good governance, then I should also turn my attention to the ECFA. I think the ECFA guidelines seem reasonable for a non-profit organization that is not a church. However, I question how a local church can adopt these guidelines and still be a church. To me, Mars Hill and other stand alone megachurches seem more like mini-denominational organizations than local churches. I will explore these ideas in my next post on the ECFA and Mars Hill, probably tomorrow.