One of the first things I noticed when I first started investigating Gospel for Asia’s finances in India was the corpus fund set up for the Indian organizations (i.e., GFA-India, Believers’ Church, Love India Ministries, & Last Hour Ministries). When I examined Indian records (FC-6 reports), I saw millions in U.S. dollars used to fund these accounts. A corpus fund is a “permanent fund generated and kept for basic expenditures needed for administration and survival of the organisation.” (also see this link)
There is nothing wrong with setting up a corpus fund. In India, organizations can set up a fund and use the interest earned for charitable purposes. However, the donations to the fund are not supposed to be used unless the organization’s existence is threatened.
Another important condition is that donations to the corpus fund must be designated for that purpose by the donor, usually in writing. Without designation, donations are not supposed to go to the corpus fund, but rather to the charitable purpose intended by the donor. The evidence I produce here today suggests to me that GFA donor funds have been systematically diverted to the GFA corpus fund apparently without donor designation for that purpose.
First, I have access to reports showing all donations to GFA – United States for years 2004-2008, 2010-2014 (2009 was unavailable from my source). None of those reports show any donations to a corpus fund.
To illustrate, click through this link to see the 2012 report (it is too long to include in the post). All donations are credited to a specific line item and all line items used by GFA are included in this chart of donations (I have redacted the names of staff and the amount received in their support accounts). I cannot find any line item which refers to a corpus fund. None of the reports going back to 2004 have a line item for the designation of donations to a corpus fund.
Now take a look at this chart of GFA contributions prepared by Jason Watkins, a former auditor with a Big 4 accounting firm. This table shows the donor funds sent by GFA to Indian affiliates to establish and maintain corpus funds. I have independently checked the figures in this table.
This table also shows the percentage of total giving from GFA -United States to the Indian affiliates. Total corpus fund donations from GFA represents about 35% of all giving from GFA to Indian affiliates since fiscal year 2010.
Where did GFA get the money to give to their Indian affiliates?
Due to GFA’s claim that 100% of donations designated for the field go to the field, I feel sure many donors think that 100% of what they give goes to a missionary or children or disaster relief or some such good cause. However, the Indian records show that GFA leaders have established a financial cushion for Believers’ Church and related organizations in India with over $67 million from GFA in Texas. Diverting donor money to a corpus fund would violate ECFA guidelines and might have figured in ECFA’s vote to terminate GFA’s membership.
In summary, donations toward the corpus fund do not show up on GFA’s comprehensive giving reports. However, in the FC-6 reports in India, millions of dollars in contributions to the corpus funds are listed as coming from GFA in the United States. I ask again where did GFA get that money? Nothing in available reports shows donations earmarked for the corpus fund.
Tag: K.P. Yohannan
Former Auditor: $128 Million of Funds Sent By Donors to Gospel for Asia over Past 8 Years Can't Be Accounted For
Jason Watkins, a former auditor with a Big 4 accounting firm, has constructed an image depicting the findings of his review of information regarding Gospel for Asia’s finances for the last eight years. The image speaks for itself:
This is an issue I have been raising since June. To date, no explanation has been offered for why the amount reported by GFA as being sent to India isn’t reported in India public documents. Even after nearly 6 months, I am receptive to an explanation from GFA. Thus far, there has been no answer. Obviously, this is a huge red flag and should be addressed by the GFA board and leadership.
Note: The chart above replaced a similar chart in the original post. The captions have been expanded to make the explanation clearer. The figures are the same.
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.
Did Gospel for Asia/Believers' Church Buy Cheruvally Estate With a Bank Loan or Donor Funds?
Recently, a reader in India sent a clip of a 2012 interview of K.P. Yohannan on Surya TV and Indian station. In it, Yohannan responds to questions about why he did not respond to charges that Believers’ Church acquired Cheruvally Estate (a rubber plantation) illegally. He also claims that the funds to purchase the rubber plantation in 2005 came from donors who designated their donations to the church on the condition that the funds would be used to purchase income producing property.
The clip is mostly in Malayalam. I was able to secure translations by four Malayalam speakers and found them to be nearly the same. Notice that K.P. Yohannan uses some English in his replies. A composite translation is below the video with the time in parentheses after the English words he says.
Anil Nambiar: The Believers Church is the owner of Cheruvally estate.
K.P. Yohannan: Correct (.04)
AN: There is a claim that Cheruvally estate is taken from revenue land.
KP (interrupts): Simply saying…
AN: …this is an allegation from A.M. Varghese
KP: If there is any estate in Kerala that is not owned by the government for the people or does not have any questions about a clear title (.22), that is Cheruvally estate. I take the blame because I did not publically challenge such allegations.
AN: Why didn’t you come out and publicly challenge it?
KP: Stupidity, It was our foolishness (.33). Because there was some advice from people who I respect, “Your highness, don’t reply to these things. Do things straightforwardly, and you are doing that, why fear? Let them say whatever they want.” But like how got beaten up in darkness then woke up, and this is how it is now. I admit, this is a mistake we made (.53) that we didn’t respond. Because we have nothing to fear as we have not done anything wrong.
Estate…when I travel from Thiruvalla to Trivandrum along the way there are so many land, institutions belonging to other churches. How much more property owned by Amrita (a Hindu sect led by a lady guru called “Amma: meaning mother) has how much property? Why did they buy these?
As for Believers’ Church and Cheruvally estate, donors specifically (1:18) have instructed us to establish an income producing entity (1:23), in the future for you to continue your work. Let me ask you, we spend almost 40 crore rupees to take care of 60,000 children – where does this money come from? Can we campaign to raise money all the time? We have to produce our income (1:43), that is what this is for, for that only. Funds for this are literally given to us by the donors for such purposes only. See (1:52) people will ask, “your highness, your sadness (1:58), your sorrow (2:00), what is that?”
I have looked through the donor reports for Gospel for Asia going back as far as 2004 and I can’t find anything specifically donated to allow Believers’ Church to purchase income producing property. In fact, in the 2013 audited financial statement, GFA doesn’t even list Believers’ Church as a related party and recipient of cash from GFA. I suppose it is possible Yohannan referred to donations from within India which are not a part of the U.S. audit. There are many questions raised by this interview.
Those questions aside, Yohannan told one story to Anil Nambiar about the purchase of the Cheruvally Estate and another story on his GFA website. Read what he said there about the acquisition of the plantation:
In addition to generous giving on the part of its members, theese (sic) churches also generate revenue from literature publishing and other activities. When leaders were presented with the opportunity to purchase an operating rubber plantation for only “pennies on the dollar,” they saw a way to open a new income stream for ministry. But there were stipulations on how the purchase would have to be made.
“The leadership made the decision with the understanding that financing would not come from church or mission funds,” explained Dr. K.P. Yohannan, who is also president of Gospel for Asia, whose native missionaries serve the Asian church. “Rather, it would have to be taken care of from the profits of the estate.”
With that understanding, and the knowledge that the property was being “dumped” at a very low price (about US $19 million), the leaders voted to go forward.
“We made the purchase with a 100 percent bank loan at a very favorable rate,” Dr. Yohannan explained. “And now the loan is being repaid with the profits from the rubber plantation. When it is paid for in six or seven years, all further profits will go directly to fund missions and ministries.”
“I gave my full support to the purchase,” Dr. Yohannan added, “because I know that the future of the church in India depends on its ability to take care of itself.
So which is it? Was the plantation purchased with designated donor funds or by means of “a 100 percent bank loan?”
It wouldn’t be far fetched for Believers’ Church to divert funds; an Indian court declared that the church did just that in 2014. But why tell American donors that the plantation was fully purchased with a bank loan? The two different narratives do not inspire confidence or trust.
In this interview, Yohannan discloses that GFA spends around $7 million (40 crore rupees in 2012) on 60,000 Bridge of Hope children. That is about $117/child a year or just shy of $10/month. BoH sponsors in the U.S. send $35/child. Furthermore, if the plantation and other income producing businesses are funding these programs then what is happening to the U.S. donations?
K.P. Yohannan Told Gospel for Asia Staff He Has No Powers as Metropolitan of Believers Church
In the May 14, 2015 staff meeting, Believers’ Church Metropolitan and Gospel for Asia President K.P. Yohannan told staff that he does not sit on any boards or trusts in India and that he had no legal authority. Those declarations came near the end of the meeting. Near the beginning of the meeting, Yohannan set the tone by saying he has no powers as Metropolitan of Believers’ Church. Listen (click the link):
K.P. Yohannan Told Staff He Has No Powers as Metropolitan
Near the end of this short clip (1:20), Yohannan says:
No decision must be made by one individual. For example, I am now the Metropolitan and honestly I have no powers. I am chief among equals. So any decision for the church, faith and practice, ordination is made by the council.
Throughout the meeting, it seemed to be a matter of great importance for GFA leaders to downplay Yohannan’s authority in Believers’ Church. This is puzzling in light of the Believers’ Church Constitution. Click the links the read chapters one and two, and three. See also the segments below to see that Yohannan is the final authority on all matters of faith, practice and administration in the church. He has veto power over his Bishops and their Council.
