Gayle Erwin – Warren Throckmorton

Gospel for Asia and Compliance with the Evangelical Council for Financial Accountability’s Standards: The 2015 Letter

In K.P. Yohannan’s recent “exclusive personal response” to the fraud lawsuit settlement involving Gospel for Asia, Yohannan traces GFA’s problems to a “confidential letter from a financial standards association we were part of, and of which we were a charter member.” He said that the letter was put on social media to damage GFA. He added that a former staff member sent negative letters to donors.

Some of that is true and some is misleading. The letter Yohannan referred to came from the Evangelical Council for Financial Accountability and was given to me by Gayle Erwin, a former GFA board member who served on the board for 30 years. Erwin had resigned from GFA’s board because of multiple problems he saw at GFA. He wanted to correct GFA’s public statements and believed the donor public would only know the truth if they had information. Erwin’s motive was to inform donors and set the record straight. If informing donors damages GFA, then GFA should consider the implications of that.

Yohannan also said a former staff member sent negative letters. In fact, a group of former staff members approached GFA’s board many months in advance of any public revelations. Long before I published my first blog post about GFA, former staff members approached GFA’s board with 5 concerns which they hoped could be resolved without public disclosure. In this newest statement, Yohannan presented the situation with former staff as though he was surprised by it. He should not have been. The situation had been brewing for months before anything came to light. You can read the concerns and history of the situation at GFADiaspora.com.

K.P. Yohannan said that the allegations were false. However, the board member he assigned to look into the matter — Gayle Erwin — found evidence for all but one of the five concerns. He later changed his view about the last concern and said he agreed with the former GFA staff on that point as well. Erwin also alleged in 2015 that Yohannan altered Erwin’s report to the GFA board to minimize the severity of Erwin’s findings. Those interested in comparing Yohannan’s statements now to former GFA board member Erwin’s documents and statements from 2015 can see them here. I also intend to post excerpts from Erwin’s report over the next several weeks.

For now, I want to respond to this part of Yohannan’s response:

Every year we evaluated our ministry and underwent an independent audit. In 2015, our governing board received a confidential letter from a financial standards association we were part of, and of which we were a charter member, pointing out that our accounting practices needed to better conform to the requirements set by that association. Despite the unique challenges our organization faces by supporting ministry in certain parts of the world, we immediately set out to comply with their request and hired a new auditing firm.

This paragraph appears to blame GFA’s former auditor Bland Garvey for the lack of adherence to ECFA’s financial standards. In fact, the ECFA didn’t specifically request that GFA change firms. The ECFA listed 17 items of concern; in two of them the ECFA listed problems with accounting practices. In one of them, GFA said they had already changed firms without a request from the ECFA. In fact, most of the matters related to financial practices within the control of GFA’s leadership.

To focus attention on matters of interest to the public which have been obscured by GFA’s response to the lawsuit, I am going to post segments of the ECFA compliance letter on the blog over the next month. Interested readers can read the entire letter by clicking this link. However, starting today, I will take each section in a post and highlight elements of what ECFA found. The reasons ECFA evicted charter member GFA weren’t limited to problems with the accounting firm. I will take them in order from the letter to K.P. Yohannan dated September 2, 2015:

The following is a summary of the most significant GFA compliance issues we reviewed:

1. Use of field-generated funds to satisfy designated foreign contributions. During our meeting on July 1, ECFA first learned that GFA and its field partners have engaged in a multi-year practice whereby field partners at least partially satisfied the designations on foreign contributions (primarily from U.S. donors, restricted for field use in India) by using locally generated field income (contributions from donors in India, profits from an India based rubber plantation, hospitals, etc.).

GFA staff indicated that the purpose of this practice was to retain foreign contributions in Indian Foreign Contribution (FC) accounts to earn a higher interest rate while expending locally generated funds that would not earn the higher interest rate. At this point, it is important to note that GFA disclaims that it exercises any control over field partners (see #10 below).

GFA staff also indicated that amounts in FC accounts would be used eventually for their original designation, as well, with the ultimate result that the purpose of the foreign contributions would be more than fulfilled.

To be clear, GFA solicited funds from donors, primarily gifts with donor restrictions, and transferred the funds to field partners in India, depositing them in FC accounts. While certain amounts were expended from the FC accounts in fulfillment of donor designations, significant amounts were retained in FC accounts over a period of years (see #2 below).

ECFA staff observed to GFA that it is not a normative practice to hold donor-restricted gifts and fulfill donor restrictions using other funds. Especially with respect to funds sent to international partners, it is extremely difficult for GFA to demonstrate that it has exercised appropriate control of the funds. Further, ECFA observed that this practice may not comply with ECFA Standard 7.2 because of the lack of clarity regarding the satisfaction of donor restrictions on gifts solicited by and given to GFA.

Our review of the board minutes did not indicate the GFA board had approved, or even been notified of, the practice of using field generated funds to satisfy restrictions on foreign contributions.

Subsequent to ECFA learning of this practice on July 1, GFA represented to ECFA that GFA’s field partners have ceased the practice of satisfying the designation on foreign contributions with field-generated funds.

GFA acknowledged using money from Indian for-profit ventures and Indian donors to fund activities which donors from the US thought they were funding. US funds were being placed in interest bearing accounts. One problem with this is that field partners might not use those foreign funds for the purposes designated. Some funds were held for many years while donors thought their donations had been spent to help evangelists or children. GFA couldn’t satisfy the ECFA that those funds had been used to satisfy donor intent. This was replicated in the fraud trial which led to the federal judge sanctioning GFA because they were unable to produce evidence about how the funds matched up with donor designations.

Next post: Excessive cash balances held in partner field accounts.

Christianity Today On the Release of Gayle Erwin's and ECFA's Reports on Gospel for Asia

Bob Smietana at Christianity Today has put together a great summary of both the ECFA and Gayle Erwin reports to the board of Gospel for Asia. I encourage readers to go read it.
Here are some highlights:
In the article, Smietana pointed out the misleading nature of GFA leaders’ communications with the ECFA, GFA board, and the donors.
From the article:

Despite running a ministry that collects hundreds of millions in donations, Yohannan appeared to be unaware of the basics of nonprofit management.

GFA appears to be cultivating a narrative which casts Yohannan and COO David Carroll as incompetent rather than deceptive.
In a first, Yohannan sent a note to Smietana saying he appreciated the GFA review. As I noted in my post about Gayle Erwin’s report, Yohannan did not appreciate Erwin’s candid report.
A scapegoat for Yohannan in his note to Smietana is the rapid growth of GFA. Remember, GFA was a charter member of the Evangelical Council for Financial Accountability. GFA has had access to ECFA materials and guidance for well over 30 years. GFA’s website is full of promises to be financially astute, still using the Independent Charities of America Seal. Blaming their growth is another way of passing the buck.
Smietana pointed out that Gayle Erwin was told to rewrite his report on the allegations from the GFA Diaspora.
Smietana pointed out that David Carroll told CBS 11News Dallas that GFA was kicked out of ECFA over minor infractions. Smietana contrasted that claim with the serious problems highlighted by the ECFA report.
Go take a look, there is much more.

The Other Gospel for Asia Report K.P. Yohannan Did Not Want Anyone to Read

On December 2, former Gospel for Asia board member Gayle Erwin released the results of ECFA’s investigation into GFA’s violations of ECFA standards. At the same, Erwin also disclosed another aspect of GFA’s actions which is as disturbing as the ECFA report. First some background.
In June 2014, a group of former GFA staff members approached GFA’s leadership with five major concerns (see the GFA Diaspora site for a detailed history and list of concerns). Eventually, GFA’s board appointed long-time board member Gayle Erwin to conduct an investigation into the five allegations. In early March, Erwin submitted his report. Erwin found that most of the allegations had some substance and should be addressed. According to Erwin, GFA’s CEO and founder K.P. Yohannan was furious when he read Erwin’s report. Erwin described his recollection of the scene in an undated letter to the GFA Diaspora former staff group.

When I first presented the conclusions of my investigation to KP [Yohannan] (with David Carroll present) KP glanced at it, declared that he was a speed reader, and began what I will simply call an ugly scene filled with brutal expressions I don’t wish to repeat, except for one I will reveal later. I presented this same report to the Board of GFA. The ugly scene began again with similar brutality. My recommendation was that we confess, make restitution and change, and that I be granted permission to meet with you. The board rejected my findings and I was instructed to write the public report which was sent to you. Although the board was very pleased with the report, the agony of having written it has not left me.

Erwin also wrote a letter, dated March 17, to Yohannan in which he described Yohannan’s reaction:

I [Erwin] approached this situation in as honest and ethical manner as possible. Never did I hint to you [Yohannan] or anyone else what my findings were until I presented them to you in your office in the presence of David Carroll. I kept isolated from any attempt to present “our side” from anyone including you. Obviously you were not happy. I think you expected me to completely exonerate you and GFA. You more than lost your temper that afternoon. You exhibited a serious mental failure in your paranoia and irrationality. Your response was and still is a “scorched-earth” approach that is willing to burn down anyone and anything in the way of your own conclusions and status.

Erwin then rewrote the report. It was sent to the GFA Diaspora in a letter dated March 26, 2015. It is much shorter than Erwin’s original report and denied the allegations. With board awareness of the original report, Erwin wrote

In response to your letter of September 3, 2014, after many hours of investigation, intense prayer and examination of heart, we are broken-hearted and repentant that we damaged by our actions and attitudes any believer for whom we had responsibility by relationship. We have proposed, and still do, to go wherever we need to and do all within our power to apologize and seek forgiveness and healing with anyone and everyone on your list who may have suffered damage of spirit or heart from us. That individual contact has not been afforded to us by you, which, to us, neutralizes your accusations. But, we have done all we can do about the past until freedom is granted to us.
We have, from the beginning, made our new headquarters fully open to the community and have purposely served the community. We do not have church services in our chapel. We do encourage workers to go to local churches, be a part of them and receive any and all counseling from the local pastors and churches, except in very rare cases. Our gates are left open and visitors are welcomed and shown whatever they wish to see and questions are answered. We are, indeed, a community and fellowship, but no one would be able to find evidence of being a cult.

Your final combined declaration about the structure and presentation of the personnel and headquarters in India, coupled only with a photo was misapplied about an ordination service whose presentation is required by the state for proof of ordination, otherwise one could be imprisoned for doing religious activities limited to the ordained. Other parts of that accusation could not be verified in the manner in which you made them, and have been dropped as worth considering.

Consequently, we feel that your other accusations are without foundation in terms of the fulfilling of our call to enlarge the Kingdom of God. We also feel that your demand that we gather the boards of the USA and Canada to meet with you in order to escape your threats is excessive, impractical and counter to the commitment of our time to getting the Gospel to those who have not heard. We do not intend to call for or participate in such a board meeting.

Therefore, we send this as our final report and communication and now consider the matter closed.

Gayle

In behalf of the Board of Gospel for Asia

Then on December 1, Erwin sent a letter of apology to the GFA Diaspora and provided the original quashed report. Erwin expressed sorrow and provided a brief rationale for re-writing the report.

I apologize to you for the report that was sent to you. Some of the report I wrote with the hope that it would become true and that I was making progress in some intense mental and spiritual combat with KP. That hope was dashed. The financial part that I dismissed, I later learned was true. Please forgive me.

Thus, Erwin suppressed the actual results of his investigation because CEO Yohannan was angry. The GFA board (which at the time included Skip Heitzig, Chuck Zink, Bob Felder, Yohannan, and Yohannan’s wife and son) went along with this deception.
The original report includes evidence that the Diaspora’s allegations had merit. Below are some excerpts:

POINT #1 – Absolute Obedience
Here are my findings relative to the question of obedience/submission as expressed in point #1: Requirement of absolute submission and obedience without questioning to GFA leadership.
A. This complaint appears to be true and is the main source of the problem. If this were to be settled, we would be almost finished with the problem. B. The evidence for this is overwhelming. First there was tacit admission that this is true and the defense was not to refute the charge but to cast doubt on the claimant’s truthfulness or motive.
……
Point #2 Shunning
However you define shunning–isolating, ignoring, quarantining—this appears to have actually happened, often without explanation, in order to keep “poison” from other workers. In some cases, this kept people from the only fellowship they had. Along with required obedience without questioning or praying, this was a great source of pain for some and fueled some complaints we have facing us.
……
Point #3 Misrepresentation of the Use of Contributions
This is not true. A case could be made for use of contributions for more than what was stated, but not wrongly used. Plus, K. P. says that 60% of the needs are now met from the field—they are that close to independence—so some things are domestically funded that may appear to those at a distance as misuse. I considered this a speculative claim with no true basis. (This now appears to be true.)

Erwin added in his apology that he now believes the allegation of misrepresentation of contributions (“the financial part”) is true.

Point #4 Cultism
Developing a cult or cultish mentality is a claim for which evidence exists.
A. Obedience and shunning are tactics that every cult uses.
B. Isolation. When KP decided to build the compound in Wills Point, Texas, the reasoning was not that the Carrollton, Texas location was inadequate, but that it would save money (from $1 million to $3 million a year) and, when I asked if disrupting the lives of the workers was a consideration, the answer was “We will find out who is committed.” Those were the only two reasons I heard given.
C. Spurious demands. Head covering is expected of all the girls though “it is not required.” It is taught by KP because he firmly believes it, although the 1 Corinthians 11 recording of Paul makes it clear that a girl’s hair is her covering and that, if anyone is contentious, “We have no such custom.” You could expect any girl who chooses not to add a cover to be under heavy pressure and have to constantly explain her choice—a great difficulty when the interpretation is questionable.
D. Praying is discouraged about decisions concerning their personal life. A common cult tactic. This is ironic since prayer is such an emphasis.
E. Secrecy. These expectations are never listed in the advertising. Nor was the secrecy in which the compounds and practices in India ever admitted or explained. `
Point #5 Withholding Information About Organizational Structure
Adopting an Eastern Orthodox organizational style and clothing style without letting it be known in North America is true and represents a vulnerability that may be costly.
A. KP has taken upon himself the title of “Metropolitan,” a title in Orthodox circles equivalent to “Pope” in Catholic Churches.
B. Dramatic robes and long white cassocks are worn at church events by bishops and others in authority. The most dramatic robes are used in ordinations, they explain. The explanations for the most ornate robes and authority symbols is that these are necessary for ordinations so the government will recognize them as such, since to claim ordination falsely will subject you to jail. I have no evidence that this ornateness is necessary to validate ordination.
C. Two visits ago to India, as I was brought to the new headquarters, the first image I saw was a large stone “cathedral” building of British/European design. I was in shock for two reasons: First, the cost of something like that, copied from a failed system, could have sponsored many evangelists. My thought was, “How many souls did this cost us?” Second, why had I not heard of this before? Also, during a break, I wandered to a side room of the platform and read a book outlining service orders more from episcopal type churches than from evangelical ones. These old orders may provide a spectacle but they are borrowed from failed and failing systems.
D. In my last visit, on a Sunday, I was carefully kept from observing the service. It was a troubling moment.
E. Though admitting the Orthodox style and system, KP maintains that the theology remains evangelical.

Erwin finished his report with the following questions:

This concludes my observations and comments but leaves me with certain significant questions:
1. Why did all of this come as a surprise to me, a 30-year board member?
2. How can we apologize to our accusers without being self-serving?
3. Can anything be successfully changed to make our training systems free from traditions and more like the example and teaching of Jesus?
4. If no changes or apologies are made, how can we handle (or can we) the public relations disaster of the revelation of the Orthodox system to our largely evangelical supporters?
5. What is our role as a board?
6. Were any of these actions of GFA (KP) necessary for the success of GFA?
7. Were we not succeeding before the imposition of new systems?
8. Are there any surprises yet awaiting us?
Sincerely and Painfully Submitted, Gayle D. Erwin

There certainly have been more surprises.
Suppression of Information
Taking the two reports together (Erwin’s and ECFA’s), it is hard to escape the conclusion that CEO K.P. Yohannan and the GFA board have engaged in suppression of information material to donors and supporting churches. A trusted board member of 30 years (Erwin) discovered information he did not know but considered important and potentially damaging. This information was then suppressed and covered up. According to the ECFA report, much of GFA’s financial information was kept from the board. In the case of Erwin’s report, the board deliberately suppressed information important to donors and critical to their role of serving the public interest.
One former board member, Skip Heitzig, still seems to be engaged in damage control. Not long ago, he allowed a subordinate to write a letter about GFA that minimized the findings of both the ECFA and his former board colleague, Gayle Erwin. Heitzig’s assistant declared that no independent investigation had established wrongdoing on the part of GFA. This is an incredible claim given that Heitzig had access to ECFA’s report of 17 areas of concern leading to an ECFA board vote which found GFA in violation of five financial standards. Furthermore, now we know that Heitzig had access to Gayle Erwin’s report and sat on the GFA board which approved suppression of Erwin’s findings.
The suppression of Erwin’s report is, like so many aspects of the unraveling GFA story, truly scandalous. Donors, supporting churches, and the general public expect board members to look out for their interests and the interests of people served. It remains to be seen whether the GFA board will step up to those responsibilities.

World Magazine on the Release of the ECFA Gospel for Asia Investigation Report

World’s Bill McCleery has an article today on the Evangelical Council for Financial Accountability’s Gospel for Asia investigation report released to me and the GFA Diaspora last week.
GFA COO David Carroll sounds more contrite than ever in this piece saying GFA leaders “owned” their mistakes and are sad and sorry that they “breached the confidence of our donors.” This is a long way from May 7 of this year when Carroll told me:

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.

As he should be, Carroll is sad and sorry about the donors, but I still wonder when GFA is going to make a sincere effort to deal with the GFA Diaspora and other former staff.

As in previous reports, K.P. Yohannan is missing in action. No comment from him.

At the end of the article, Carroll promises to do better but he doesn’t explain why we should listen to him now. GFA touted their relationship with ECFA and their financial integrity while they were violating ECFA standards and telling people they were fine.

Some others aspects of the World article will be reviewed in a separate post (e.g., Bridge of Hope).

Former Gospel for Asia Board Member Gayle Erwin Speaks Out, Discloses ECFA Report on GFA’s Violations of Membership Standards

In response to ongoing claims from Gospel for Asia about the investigation conducted by the Evangelical Council for Financial Accountability, former GFA board member Gayle Erwin has released a series of documents, including the report of the ECFA investigation as well as the GFA response. As is now widely known, the result of that investigation was a vote of the ECFA board to terminate GFA’s membership. I believe it is important to note that Erwin put in over 30 years of service as a board member and was cited in the original edition of K.P. Yohannan’s first book (ghostwritten by Bill Bray) as an influence.

Erwin also released correspondence which documents his efforts to bring change to GFA before he resigned. Given the lack of public accountability by GFA, these documents provide some answers to remaining questions raised by the public, GFA donors and former donors, former and current staff, and current recipients of GFA’s services.

In this post, I intend to provide links with a short description of each document. A fuller response to the ECFA investigation and GFA’s response to it will follow.

ECFA’s Report To Gospel for Asia – This report covers the results of the ECFA’s investigation into a variety of allegations. The contents provide much needed context which help make some sense of the simplistic descriptions given by GFA. Furthermore, the contents vindicate much of my reporting here.

GFA’s Response to ECFA’s Report – GFA replied to the ECFA report with additional information and promises to make changes. From my vantage point, the promised changes were small compared to the magnitude of the problems. Apparently, the ECFA agreed because the board voted to remove membership on October 2.

March 17, 2015 Letter from Gayle Erwin to K.P. Yohannan – In this letter, former GFA board member Gayle Erwin discusses his investigation of the charges brought by the GFA Diaspora. Erwin felt some of the Diaspora claims were true which upset Yohannan.

Letters of Concern from Gayle Erwin to K.P. Yohannan – It is clear in these letters that Erwin is hoping to provoke transparency and change at GFA.

Gayle Erwin’s report to GFA as assigned – This is the GFA board investigation report Erwin originally filed with the board. According to Erwin, it was significantly rewritten by K.P. Yohannan before being given to the former staff group, GFA Diaspora. In contrast to the report which GFA’s former staff members received, Erwin actually found evidence for nearly all of the claims made on this website by the former staff (GFA Diaspora). Erwin now believes that financial mismanagement claims are also true.

The report of former staff concerns actually presented to the board – According to Erwin, K.P. Yohannan rewrote this report to appear in this format. Comparing the two, one can see significant whitewashing of staff concerns.

Gayle Erwin’s Resignation Letter – How and why Erwin left the board.

Gayle Erwin’s Letter of Apology to GFA Diaspora Spokesperson J.D. Smith – Erwin’s apology to the former staff members of GFA.

There is a wealth of information here which will take several days if not weeks to unpack.

See additional information about Gayle Erwin’s communications with former staff at the GFA Diaspora site.

Former Gospel for Asia Board Member Quit But Isn't Sure Why

Phoenix Preacher has an email from an assistant of former Gospel for Asia board member Skip Heitzig. Through his assistant Heitzig says there hasn’t been an independent investigation of GFA and the charges are of a “he said/she said” nature. What?
Talk about demoting the Evangelical Council for Financial Accountability. Is ECFA the he or the she?
Perhaps, Rev. Heitzig failed to tell his assistant that GFA was terminated from the ECFA after an independent investigation revealed most of the ECFA standards had been violated. I know that board members were told this. Another former board member Gayle Erwin told me that he was shocked to learn that ECFA terminated GFA and decided not long after to resign.
If Skip Heitzig doesn’t know any facts, why did he resign?
For what it’s worth, I believe Rev. Heitzig and Rev. Walker should try again.

Gospel for Asia's Board of Directors and Fiduciary Responsibility

During the late 1990s, I served on the board of the American Mental Health Counselors Association. One of the first things we learned as new board members was the concept of fiduciary responsibility. I learned that our organization was formed to serve the interests of our constituents and more broadly the public interest. I also learned that I was responsible to ensure that the organization functioned within the law and in accord with rules we set for ourselves (e.g., by-laws). Furthermore, I had a duty to exercise oversight of staff and the operations of the association.
In light of recent resignations from Gospel for Asia’s board and the secrecy surrounding current board members, it seems appropriate to consider the duties and responsibilities of board members. In my view, GFA’s board shares responsibility with current leadership for the many questions raised over the past two years. Below are quotes from various authorities on the fiduciary responsibility of nonprofit board members.

Boards of nonprofits are legally responsible for overseeing the organization’s financial management. Since nonprofits receive tax-exempt status by state and federal agencies to fulfill public needs, the board’s obligations go well beyond its organization’s members, constituents, beneficiaries or clients.
An important part of serving the public trust is fulfilling the important stewardship roles of protecting financial and nonfinancial assets, and managing current income properly to fulfill exempt purposes. Although a ministry’s management has the primary responsibility for the organization’s financial management and reporting, the board of directors is ultimately responsible for the process. Outside auditors also play an important role as well. – Dan Busby, Quality Financial Reporting: What is the board’s responsibility?

Speaking of outside auditors, GFA’s auditor Bland Garvey recently resigned according to former board member Gayle Erwin.
GFA’s leaders have maintained an unseemly silence in the face of poor relationships with staff, unaccounted for funds, allegations of mismanagement, and other financial irregularities. The responses from David Carroll and K.P. Yohannan have not been specific and have not addressed certain issues at all. My Calvary Chapel survey results thus far find that former donors and supporting pastors are unsatisfied with the answers given by GFA leaders. At this point, GFA directors have a responsibility to speak to the allegations and transparently disclose what is being done to correct any violations of the public trust. So far, outside of comments from former board member Gayle Erwin, all we have heard is crickets.
Since GFA is expected to maintain discretion and control over funds sent to Asia, board members need to have knowledge of how those funds are spent and audited. According to Erwin, the GFA board was not given such information. Recently, Erwin told me, “Once the monetary figures went beyond the local, we board members had no knowledge of it. I am embarrassed by how little we knew.” According to Erwin, the board’s information came from K.P. Yohannan and was not contested by other senior leaders who in Erwin’s words, have to do “what K.P. says.”

Because the board of directors is ultimately responsible for the activities of an organization, it can become the target for criticism or legal action when things go wrong, and failure to live up to fiduciary responsibility is a serious charge.

As trustees of the organization’s assets, board members must be able to demonstrate that due diligence has been employed in decision making, particularly with regard to the oversight of financial matters. While individual board members are responsible for their own actions, the full board is responsible for the board’s decisions. This means that board members must hold each other as accountable.

But nothing absolves the board from its single most important responsibility as a fiscally accountable body of trustees – that of acknowledging the responsibilities that come with being a beneficiary of the public trust. Generally speaking, nonprofits are deemed to be holding assets, including investment funds, in trust for the benefit of their constituencies and the charitable purposes for which the organization was formed. Linda Compton, Painful Lesson in Board Investment Policy Making, Boardsource, retrieved from ECFA

Although the primary topic of Compton’s article is about board oversight of retirement funds, the principles that apply to oversight of those funds also apply to all other activities of an organization. Boards can’t merely blame staff when concerns are raised by the public and constituents of the nonprofit. As it is now, GFA lost ECFA membership, is losing donors, and has not resolved the concerns of well over 100 former staff. Three board members have resigned over these issues. The remaining board members have a duty to God and the public to step in and right the ship. Remaining silent doesn’t remove their responsibility.

Although GFA is secretive about their board members, evidence is strong that current board members are K.P. Yohannan (chair), Gisela Punnoose (KP’s wife), Danny Punnoose (his son), Chuck Zink (has a child on staff), Robert Felder, Francis Chan, and David Mains. According to K.P. Yohannan, there is at least one more member but the identity of that member isn’t clear. Looking at the board members, it would take every non-Yohannan family member to take action. One of the requirements to participate in the Combined Federal Campaign is a board made up of independent members. However, it is plain to see GFA does not meet that standard.

Difficult or not, board members have a duty to the public. Christian board members have a duty beyond that. Only time will tell if GFA’s board will rise to the occasion.

Additional resources:

Fiduciary Responsibilities of Nonprofit Directors

A Nonprofit Board’s Fiduciary Responsibility

Believers’ Church Constitution Contradicts K.P. Yohannan’s Claim that He Has No Legal Authority in Indian Church

In a May 14, 2015 staff meeting, K.P. Yohannan and David Carroll disclosed to the Gospel for Asia staff that in 2013 Believers’ Church in India gave $19.8 million toward the construction costs of the new Wills Point. TX headquarters. When the gift came in back in 2013, GFA leaders told staff that the money was given by an “anonymous donor.”

For those new to this story, Believers’ Church is the church started by Gospel for Asia founder K.P. Yohannan. Yohannan is CEO and International Director at Gospel for Asia and he is the supreme Metropolitan Bishop in India for the Believers’ Church. Although undisclosed in their 2013 audit, GFA sent just over $20 million to Believers’ Church in 2013. Believers’ Church in India received far more than Gospel for Asia India which was not disclosed in the audited financial statements.

Within the last year, questions arose among staff about the accuracy of the “anonymous donor” story and Carroll and Yohannan addressed those questions during the May 14 staff meeting. In that meeting, Yohannan asserted that he had nothing to do with the Believers’ Church’s decision to send nearly $20 million back to Texas. A major part of his defense was his claim that he does not sit on boards or trusts in India and has no legal authority in Believers’ Church. Yohannan claims he didn’t have authority to direct the donation and didn’t have anything to do with it.
Here is what Yohannan said about his membership on boards and trusts in India and his legal authority.

Transcript:

And by the way, just so you know, I am not legally on any boards, any trusts, anything in any of these countries. I have no powers to make decisions or sign money, or release money, or make decisions, I am completely legally…why? Because anybody who work in the United States or overseas countries have a board membership or have legal membership should not be part of their legal entities in India. It’s a conflict of interest and therefore we send the funds and it is immediately under the government watch care and the government of India is responsible and investigative agencies and tax divisions to make sure that is carried out within the time frame or whatever they do, that is a public thing.

In previous posts, I have shown government and church documents which contradict his claim. Today, I provide portions of the Believers’ Church Constitution which describe the massive authority and power of the Metropolitan Bishop, His Grace the Most Reverend K.P. Yohannan. It is clear that Yohannan misled his staff. If Believers’ Church follows the church Constitution, there is no way Yohannan did not approve the gift to help complete headquarters construction.

Click the link for the first two chapters of the Constitution, and this link for chapter three. Images describing the power of the Metropolitan are below. See the boxes for especially relevant sections:
Yohannan is President of all church trusts, he has discretionary power over governance of the church, he is the final authority of spiritual and administrative matters and he is the managing trustee of the church. It is inconceivable that Believers’ Church could spend $19.8 million dollars without his approval. Sections from chapter three make this even clearer. Buying and selling movable and immovable property and any management matter can be overruled by Yohannan. Committees can suggest actions but they must be cleared with Yohannan first.

Yesterday, Gayle Erwin said this about the transfer of $19.8 million from India to GFA-US:

If you read the ECFA report, you discover what we (board members–USA) had begun to know–we were kept in the dark and limited to pedantic decisions. As I saw this, I began intense confrontations with KP which I thought were gaining traction. The surprise revelation of foreign deposits and monies returned from the field (and previously described as from an “anonymous donor) pushed some of us over the edge and made our board membership untenable.

David Carroll and K.P. Yohannan told staff that the transfer of funds was completely legal and there was no conflict of interest since Yohannan had no control over the decision. He also said the $19.8 million was not a related party transaction.

DC [David Carroll] – It’s completely legal, thank you. There’s a board member, board documents as I understand it, I don’t live in Asia, but there’s board documents on the other side. The whole thing was done in complete legality.

By the way, one question, one part of that question was, is this a related party transaction? And the answer is no. It is not a related party transaction because the board members here, they’re not the same board members as there. In other words, the leadership here did not influence that decision there. Brother KP mentioned it but it was not his decision. He had to get permission, actually they told…

KP [K.P. Yohannan]– I think David, it is important for people to know the person I am. It’s like Paul said in one place he’s a doulos, he’s a servant, another place he’s an apostle, another place he’s a brother, and my role is being a spiritual father of right now about 2.7 million people scattered throughout all these nations and I do not have any legal say or decision about legal matters. My role is a spiritual leadership. You may not have asked that but there are hundreds of trusts and entities in all these countries. I don’t sit on any of those things. There are their own people. And my role is the spiritual leadership. And I hope to some extent that is here also.

It is hard for me to understand how David Carroll could make this statement:

It is not a related party transaction because the board members here, they’re not the same board members as there.

I publicly ask David Carroll: Have you ever read the Believers’ Church Constitution? You are ordained in that church. Is this like Mars Hill Church and the officers and clergy don’t have access to the Constitution? You told staff on May 14 that Yohannan wasn’t on a board under the Believers’ Church umbrella. Carroll told staff:

And so, what the people in Asia did, and it is a board that is under Believers’ Church umbrella, but Brother KP’s not on that board, it wasn’t his decision.

K.P. Yohannan is CEO and leads the Gospel for Asia board here and he is by Constitution the managing trustee and President of Believers’ Church and all other Believers’ Church trusts.

I can’t see how these claims by Yohannan and Carroll and the Believers’ Church Constitution can be true at the same time.* David Carroll said there are “board documents on the other side.” Well, the board documents that I have seen don’t support what they told staff in May. Might be time for GFA leaders to produce those documents. It is already too late for three board members who quit over this matter.

*I suppose it is possible that Believers’ Church approved a new Constitution prior to the 2013 gift. However, my source denies that and tells me that this Constitution was binding at that time and is binding currently. I am certainly open to hearing from GFA and BC with new information.

Former Gospel for Asia Board Member Gayle Erwin Comments on Board Resignation

Earlier today, I saw a private Facebook posting from former Gospel for Asia board member Gayle Erwin which contained some new information about GFA and the ECFA. Erwin was responding to my post about the resignations of Damian Kyle, Skip Heitzig and Erwin from GFA’s board. I wrote to Erwin with a request to cite the quote here. He agreed with the condition that I highlight his positive comments about GFA staff. About GFA and ECFA, Erwin said:

If you read the ECFA report, you discover what we (board members–USA) had begun to know–we were kept in the dark and limited to pedantic decisions. As I saw this, I began intense confrontations with KP which I thought were gaining traction. The surprise revelation of foreign deposits and monies returned from the field (and previously described as from an “anonymous donor) pushed some of us over the edge and made our board membership untenable. The staff of GFA in Texas, despite some inferences in the discussion on your page above, are some of the finest, most ethical and loving people I know. I marvel at how well commenters on your page have combined ignorance and hostility. I thought I was making progress in ways that would have solved and prevented this heartbreak and replaced it with victory, but I was wrong but not wrong in the ways your commenters infer. (emphasis from Mr. Erwin)

Erwin later added:

I was shocked when informed that GFA had failed all 7 of ECFA criteria for membership and had consequently been removed from membership.

In his first comment, Erwin referred to the transfer of $19.8 million from India’s Believers’ Church to GFA in Texas for the purpose of completing construction on their new Wills Point, TX headquarters.
This comment provides some insight into the perceptions of board members regarding the issues I have been raising for months. It seems they (at least Erwin) have of late felt they were kept in the dark. Erwin says he and the other board members were not aware of the source of the nearly $20 million.
I think it is important to consider Mr. Erwin’s wording regarding the donation from the field: “The surprise revelation of foreign deposits and monies returned from the field (and previously described as from an “anonymous donor) pushed some of us over the edge and made our board membership untenable.”
Those foreign deposits were funds given by donors for mission work which were sent to India and deposited into accounts of the K.P. Yohannan controlled Believers’ Church. Then nearly $20 million were authorized by Believers’ Church to be sent back to Texas to help finish construction of the palatial Wills Point, TX headquarters.
Like Mr. Erwin, I suspect donors will find that to be untenable.

Three Gospel for Asia Board Members Resign

I have confirmation from someone in a position to know that Skip Heitzig, Gayle Erwin, and Damian Kyle have resigned from the Gospel for Asia board. None of the men responded to my requests for information but multiple sources within GFA have confirmed that an announcement was made during a staff meeting time on Friday.
Very little explanation was given and the announcement was delivered by Danny Yohannan Punnoose (K.P. Yohannan’s son). While GFA will not confirm, it appears that K.P. Yohannan’s son and wife, Francis Chan, Chuck Zink and perhaps one other person are now on the GFA board.
It is astonishing that the second largest mission organization in the nation keeps so many secrets regarding governance and finances.