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U.S. churches find financial transparency

By Ed Stoddard Tue Sep 4, 8:26 AM ET

DALLAS (Reuters) - The growth of megachurches in the United States has spawned mega revenues, leading many to find the financial light and embrace transparency to assure their congregations that their offerings are well spent.

Many now have come to resemble corporations in their structure, with chief financial officers, lines of credit for expansion projects, and some very large income statements.

"The Bible speaks about money as much as any other topic and so we feel we need to communicate about money or anything financial on a regular basis," said Tim Tracey, Executive Director of Operations at Northland, a megachurch with 12,000 regular worshipers in Longwood, Florida.

"The money that supports a church comes from the congregation and so they need to be informed completely. It's not the leadership's money, it's ultimately God's money," he told Reuters in a telephone interview.

Tracey's church, which is headed by influential evangelical pastor Joel Hunter, publishes a weekly stewardship report on its Web site giving details of its finances, complete with pie charts showing how tithes are being utilized.

It is also in the process of signing up to the Evangelical Council for Financial Accountability (ECFA), which holds churches to stringent standards of accounting and transparency that are almost on a par with publicly listed companies.

"Any church that signs up with us as a member must commit to give their most recent audited financial report to anyone who asks, friend, foe or journalist. And they must commit to an independent audit," said ECFA vice-president Dan Busby.

He said the ECFA started almost three decades ago and its need became increasingly apparent with the eruption in the late 1980s of the financial scandals that toppled televangelist Jim Bakker.

While conservative U.S. evangelicals have nothing against wealth and success, many church leaders today do not want to be seen leading the lavish lifestyle that Bakker and his recently deceased ex-wife Tammy Faye led, complete with luxury cars, jewels, furs and an air-conditioned doghouse.

The ECFA has around 2,000 members, most of them groups such as missionary organizations affiliated with churches. But it does have almost 100 individual churches that have signed on and their combined annual revenues are around $600 million.

"Megachurches" are loosely defined as those with at least 2,000 regular attendees and have drawn a lot of the attention on this issue. But congregations large and small are starting to preach the gospel of accountability.

"The trend with us is more with the larger churches because we have always required an independent CPA (Certified Public Accountant) audit which is costly for smaller churches. But we do have one with an annual revenue of only $461,000 so even smaller churches see the importance," Busby said.

One of the ECFA's biggest members is the Illinois-based Willow Creek Community Church, which draws 21,000 regular weekend worshipers to its main headquarters and a few smaller regional affiliates.

Its CFO, Brian McAuliffe, willingly released a copy of its latest audited financial statement -- in keeping with ECFA standards.

Its combined financial statement for 2006 and 2005 details investments and assets held for endowment (over $12.6 million in money market funds, certificates of deposit and government securities -- safe, conservative investments).

Revenue in 2006 included almost $37 million from contributions alone with a total flow of over $45 million.

Expenses show where the money went, with $22 million being spent on worship and programming, which includes staff and operating costs for services plus amortization for buildings and equipment.

"If you look at the size of this church and its complexity you see the need for this approach," McAuliffe said.

Indeed, churches that choose to eschew openness can find themselves in hot water with members eager to keep a handle on how their donations are spent.

In Kansas, the evangelical First Family Church, which has about 5,000 members, has seen some members and employees leave because of questions about a lack of financial transparency and an appearance of lavish spending on homes, trips and cars by senior pastor Jerry Johnston.

The church's failure to comply with the ECFA standards also led a leading Christian radio network in July to drop the Rev. Johnston's daily program from its lineup.

Finding transparency has paid off for troubled churches.

In the town of Euless, north of Dallas, the huge First Baptist Church was found to be insolvent in October of 2004.

Administrative pastor Gary Phillips said one of the first reforms he introduced was accountability.

"We began to communicate weekly to the members what the financial conditions were," he said.

"Once the people were confident that their money was going where they intended it to go they began to respond by giving at a whole different level," he said.

As a result the 9,000-member church managed to pay off a $6.5 million debt in 30 months and get back in the black.

http://news.yahoo.com/s/nm/20070904/us_nm/...gion_finance_dc

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While conservative U.S. evangelicals have nothing against wealth and success, many church leaders today do not want to be seen leading the lavish lifestyle that Bakker and his recently deceased ex-wife Tammy Faye led, complete with luxury cars, jewels, furs and an air-conditioned doghouse.

I remember that Lenny Bruce thought something was wrong if a preacher owned more than two suits.

Being upfront and honest is good for these Mega-Churches, in that it reassures their congregations that everything is above board and allays charges by their critics that they are up to no good by dispelling the appearance of wrongdoing with evidence to the contrary.

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Thinking may not return to comment on the thread (he does this once in a while,) so if I can be so bold as to act as speaker for him, I hope he won't be too offended. From what I gather, Thinking is a cultural Mormon who does not believe the Church is "true" as we commonly would understand the phrase; I believe he attends to keep the peace in marriage. After any questional doctrine is taught in Sunday School he comes to the board to make a post on it. I'm not sure if he tithes, but that's a pretty personal question, imo.

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Just an observation when I visited a mega church awhile back.

I went through the back entrance, and saw a line of people punching a time clock as they entered the building, to perform their duties during the church service.

I can understand why this church would make their finances public.

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How "secret" are the church's finances? I would assume as a 401c organization there are some kind of reporting requirements. Even if they are keeping secret information, what are you suggesting the church may be doing with all the secreted hoards of money (besides investing heavily in Coca-Cola or Marbolo)? It seems to me that "by their fruits ye shall know them." The Church is always one of the first to respond when there are disastors and people in need. They fund a fairly substantial welfare system within the church. I guess I'm just not sure of the point of this post. Heck, we even have a lay ministry, so its not like folks are pilfing the tithe box.

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Another person who post's something and adds no comment of their own.

Are you a member? Do you tithe? Do you have evidence of any wrong doing on the part of the Church?

I am no longer a member. I was BIC, baptized at 8 and remained a member until my 40th year. I no longer "tithe" to the LDS church however, I do make contributions to religious and charitable organizations. I have absolutely NO evidence of wrong doing on the part of "the church" nor do I believe that such behavior exists. I hope that my credentials have not disqualified me from any future posts on this topic.
cdowis Posted Today, 05:20 AM

Just an observation when I visited a mega church awhile back.

I went through the back entrance, and saw a line of people punching a time clock as they entered the building, to perform their duties during the church service.

I can understand why this church would make their finances public.

Are you saying that if a church has paid employees they should make their finances public? Does the LDS church have paid employees? If so, do you feel that they should also disclose financial information?

Now my personal opinion, FWIW.

I do not think that asking ANY church for complete financial disclosure is implying that it is guilty of any wrong doing. The leadership of the LDS church has stated many times that the churches financial information is reserved for the tithe paying members. Is there among you "tithe paying" members who has made such a request? My theory, based on my attitude towards this topic while a member, is that most if not all full-tithe payers are not concerned about where the money is going. I respect this position, as this was also my position for 40 years while a member. I choose now to donate only to organizations that disclose their financial information to contributors AND potential contributors alike.

Legalbryan Posted Today, 05:57 AM

How "secret" are the church's finances? I would assume as a 401c organization there are some kind of reporting requirements. Even if they are keeping secret information, what are you suggesting the church may be doing with all the secreted hoards of money (besides investing heavily in Coca-Cola or Marbolo)? It seems to me that "by their fruits ye shall know them." The Church is always one of the first to respond when there are disastors and people in need. They fund a fairly substantial welfare system within the church. I guess I'm just not sure of the point of this post. Heck, we even have a lay ministry, so its not like folks are pilfing the tithe box.

Of course the churches finances are not "secret" from the government. I didn't know the LDS church invested tithes in Coca-Cola :P While I agree that the church has a substantial welfare system, I do not understand the resistance to financial disclosure. As for a "lay ministry", I was led to believe this was the case during my membership. I can say for sure that "I was never paid" for my leadership services during my years in the church. That said, is there a "recent" statement from the brethren stating that NO monies are paid to ANY leader in the church? I am not saying that there is ANY evidence of fraud or misuse of funds, I just wonder where the evidence is that NO ONE is paid for services in the LDS church whether it is a salary, stipend, allowance or whatever. Again please do not interpret my questions as accusing the LDS church of ANY wrongdoing.
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Ok one question. What difrence would it make if you knew what the Church had as far as money? If you knew they had 20 billion what would that do? What if they had 100 billion, then what?

Does it matter? I know I have not seen any evidence that the money is being miss used.

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Maidservant Posted Today, 07:44 AM

Oddly enough, an independent auditor report -- or conclusion -- has been offered for the last many years each year as part of General Conference. This began well before the concern documented in this article for protestant mega-churches.

I am not sure what "independent auditor" you are referring to. But the "independent auditors" report made in the April 2007 general conference is posted below. Note the bold emphasis was added by me. So they are not technically "independent" or "outside" auditors rather a "independent department". IMO, this is different. Also the report simply says that policies and procedures set forth are followed etc...
Dear Brethren: As prescribed by revelation in section 120 of the Doctrine and Covenants, the Council on the Disposition of the Tithes authorizes the expenditure of Church funds. This council is composed of the First Presidency, the Quorum of the Twelve Apostles, and the Presiding Bishopric. This council approves budgets for Church departments and operations. After receiving the council's authorization, Church departments are to expend funds consistent with approved budgets and in accordance with Church policies and procedures.

The Church Auditing Department has been granted access to all records and systems necessary to evaluate the adequacy of controls over receipts of funds, expenditures, and safeguarding of Church assets. The Church Auditing Department is independent of all other Church departments and operations, and the staff consists of certified public accountants, certified internal auditors, certified information systems auditors, and other credentialed professionals.

Based upon audits performed, the Church Auditing Department is of the opinion that, in all material respects, contributions received, expenditures made, and assets of the Church for the year 2006 have been recorded and administered in accordance with appropriate accounting practices, approved budgets, and Church policies and procedures. http://lds.org/conference/talk/display/0,5...1-690-2,00.html

Mola Ram Suda Ram Posted Today, 07:31 AM

Ok one question. What difrence would it make if you knew what the Church had as far as money? If you knew they had 20 billion what would that do? What if they had 100 billion, then what?

Does it matter? I know I have not seen any evidence that the money is being miss used.

I personally am not interested in how much money the church has but what it is spent on. Again I want to state that I DO NOT believe that the LDS church misuses tithing funds, welfare etc... What does matter to me though is the claim of "non-paid clergy or a lay ministry". If they don't provide ANY monies then say it. If they do then simply say so.
marvmax Posted Today, 06:16 AM

Another thread where all the tithe payers don't care, and everyone else is jealous.

Jealous of what?
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I am not sure what "independent auditor" you are referring to. But the "independent auditors" report made in the April 2007 general conference is posted below. Note the bold emphasis was added by me. So they are not technically "independent" or "outside" auditors rather a "independent department". IMO, this is different. Also the report simply says that policies and procedures set forth are followed etc...

I personally am not interested in how much money the church has but what it is spent on. Again I want to state that I DO NOT believe that the LDS church misuses tithing funds, welfare etc... What does matter to me though is the claim of "non-paid clergy or a lay ministry". If they don't provide ANY monies then say it. If they do then simply say so.

Jealous of what?

I understand that you dont believe the LDS truth claims, that is fine with me. I was just make a general statment. Not to any one in particular. I agree, I want to make sure that the tithes dont get misussed.

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Jealous of what?

I don't know of what that is just the impression that I get. When our bishop used to participate in a local ministers counsel they were amazed at the amount of donations our ward took in on a weekly basis, especially when we had no paid ministers locally.

Of course there are paid 'ministers' of a sort. I believe that those who serve full time receive a stipend or something like that if they need it.

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Maybe the L.D.S church should divulge wher all the money gos, Along with all the other churchs.

Then wouldnt people be most shocked at just how much money these other denominations are paying there pastors and leaders?

Wheras the L.D.S church does not pay any leaders anything.

But then again, if everybody actually knew how much money was involved i the L.D.S church,

that issue alone would probably provoke massive Anti rehtoric across the world.

Our money truely does go in its entirety too Gods work. not to pay the the leaders mortagage.

:P

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I don't know of what that is just the impression that I get. When our bishop used to participate in a local ministers counsel they were amazed at the amount of donations our ward took in on a weekly basis, especially when we had no paid ministers locally.

Of course there are paid 'ministers' of a sort. I believe that those who serve full time receive a stipend or something like that if they need it.

While serving in the bishopric, I often participated in counting tithes. Now since leaving the lds church I have seen the published income and budget expense summary at another local church. Based on those two experiences I would agree that a local minister would be amazed by the amount of donations taken in at an LDS church. Thanks for clarifying.
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I am unaware of any Church-issued statement that claims absolutely no one in the ecclesiastical ranks is paid.

As I'm sure you're aware, no LOCAL leaders are paid, hence the lay-clergy. Full-time General Authorities receive a stipend sufficient for their needs. I cannot give you a $ amount. (I would assume it is not exhorbitant, given the fact that many of them write books--and I don't know how much, if any, money they make off of that venture.)

The bottom line in my mind is, we believe these men are called of God and will do the right thing.

If they don't, then they'll have some 'splainin' to do.

Edited typo.

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My replies are in bold.

Maybe the L.D.S church should divulge wher all the money gos, Along with all the other churchs.

I agree!

Then wouldnt people be most shocked at just how much money these other denominations are paying there pastors and leaders? Maybe. Actually many other churches DO publish the salaries etc. of it's pastors and leaders. The exceptions are probably the ones who have the "most to hide" i.e. the televangelist with the flashy clothes and expensive jewerly.

Wheras the L.D.S church does not pay any leaders anything. Call for reference!

But then again, if everybody actually knew how much money was involved i the L.D.S church,

that issue alone would probably provoke massive Anti rehtoric across the world. Huh?

Our money truely does go in its entirety too Gods work. not to pay the the leaders mortagage.

:PI agree!

Edited typo

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I am unaware of any Church-issued statement that claims absolutely no one in the ecclesiastical ranks is paid.

As I'm sure you're aware, no LOCAL leaders are paid, hence the lay-clergy. Full-time General Authorities receive a stipend sufficient for their needs. I cannot give you a $ amount. (I would assume it is not exhorbitant, given the fact that many of them write books--and I don't know how much, if any, money they make off of that venture.)

The bottom line in my mind is, we believe these men are called of God and will do the right thing.

If they don't, then they'll have some 'splainin' to do.

Edited typo.

ERMD, your thoughts are EXACTLY how mine were while I was a believing member. Faith is a beautiful thing! :P
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Another thread where all the tithe payers don't care, and everyone else is jealous. :P

I'm a tithe payer and I care.

Of course, I'm not going to go crazy without disclosure. I might not even look at the numbers if they did release them. But I do care to some extent.

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Are you saying that if a church has paid employees they should make their finances public? Does the LDS church have paid employees? If so, do you feel that they should also disclose financial information?

The church has a large group of unpaid priesthood (ministers) and it is from this large body that the church leadership is drawn. In many cases, those leaders themselves are independently wealthy. In any case, they do not see the church as a source of income (lay vs professional clergy).

The church has a large, centralized infrastructure managing its financial affairs, including professional auditors and financial managers, many of whom have vast experience in those areas.

Now, my "faith" is based on the fact that the church's finances is watched over by those church leaders and professional, regardless of whether this is the true church. Unless there is a vast conspiracy by those leaders and professionals, I see little opportunity for abuse.

Now I compare this to a relative de-centralized organization with professional clergy who, for the most part, have always depended on contributions from their church to support them. The church is governed by a board which is, as I understand, primarily responsible for watching over the finances. I also have "faith" in this system insofar as the board has professional financial managers, but that may not always be the case.

So, in the church mentioned, I see that public disclosure as additional assurance of the proper use of the finances, relative to the sophisticated, centralized system in the LDS church.

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Don't they regularly present an independent auditor's report in General Conference (or am I imagining things?)? Sure they don't go into details about the Church's finances, but they have the auditor examine the finances to assure us that everything is on the up and up.

Daniel

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