Most churches do good works—soup kitchens, food banks, and so on—so they’re like charities. But they also provide a social benefits like a country club. Is a church more like a charity or a country club?

Let’s look at the financial statements of organizations that are clearly charities. The American Red Cross has an annual budget of $3.3 billion. Of this, 92% goes to program services, with the rest going to “management and general” and “fundraising.” Or Save the Children—91% of its $450 million budget goes to program services. Or World Vision—85% of $1 billion. Or the Rotary Club of Eagle Grove, Iowa—100% of $3.3 million.

Organizations that help the disadvantaged are just one kind of nonprofit. The ACLU (86% of $70 million) defends individual rights and liberties. Or, for an organization on the other side of the political aisle, take the Alliance Defense Fund (80% of $32 million).

Surely many country clubs host bake sales for good causes, organize projects that help charities, or even donate money, but let’s assume that the good works done to society by country clubs amounts to a few percent of income or less. We have 80 to 100% of revenue going to good works for regular nonprofits vs. (say) 2% for country clubs—that’s why donations to nonprofits are tax exempt and dues to country clubs are not.

How do churches compare? The short answer is, we don’t know. With very few exceptions, the financial statements of churches and religious ministries are not available to the public.

Pulling back the curtain

But there are estimates. For example:

Every year churches collect some $100 billion in donations. But most donors do not know that the average congregation in the U.S. gives only two percent of donated money to humanitarian projects. Some 98% goes to pay staff, upkeep of buildings, the priest’s car, robes, salary and housing.

This came from Roy Sablosky. But he’s on the board of the American Humanist Association of Greater Sacramento. Might he be biased?

Christianity Today is another source. A survey gave this breakdown of the average church budget: 43% for salaries, 20% for facilities (mortgage, etc.), 16% missions, 9% programs, 6% administration and supplies, 3% denominational fees, 3% other.

So where is the money to good works? Presumably “missions” includes this, but this is a nebulous category. A dollar spent on the First Baptist Church soup kitchen can fairly be counted as a charitable expense, but the dollar spent supporting a missionary doesn’t.

That estimate of 2% to humanitarian projects may not be too far off.

These survey numbers are suspect in my mind because less than a quarter of the 1,184 surveys were returned. Did churches who were embarrassed by their numbers—perhaps the fraction devoted to salaries or facilities was even higher—not bother to respond? I’d like to have more reliable numbers, but when they’re kept secret, we simply don’t know.

Why are the books closed?

What are churches embarrassed about that they need to make up excuses to avoid showing how they spend their tax-exempt donations? Again, it’s hard to tell. But there are estimates:

The January 2011 issue of the International Bulletin of Missionary Research reported that Christian religious leaders will commit an estimated $34 billion in financial fraud in 2011.

(I presume that’s worldwide, not just in the U.S.) And that’s just fraud. The money going to inflated salaries, lavish living, and other embarrassing expenses may be a far larger amount.

There are groups within Christianity that are also working on financial transparency. For example, MinistryWatch said,

We wish Senator Grassley success in his quest for the truth [in his investigation of six high-profile televangelists]. It is time for these televangelists to come clean; otherwise it could seem that they are running nothing more than money laundering schemes in the name of Christ.

But MinistryWatch has an uphill battle. They’re told by fellow Christians that it’s not right for anyone to judge, that it’s not Christian to be critical, that examining a ministry shows distrust in God, and that they should focus on God and not the works of man.

But shouldn’t churches be on the forefront of modeling what’s right within society? When pastors enumerate all that’s bad with American society today, the list should include the financial secrecy of their own organization.

The overseer must be above reproach as God’s steward
— Titus 1:7

(This is an update of a post that originally appeared 5/14/12.)

Photo credit: Wikimedia

In November, 2007, Senator Chuck Grassley (R-Iowa) asked six high-profile televangelist organizations to provide more information about how they work. Grassley said: “My goal is to help improve accountability and good governance so tax-exempt groups maintain public confidence in their operations.”

Targets of the Grassley investigation

Here are the investigated organizations (I’ll use the names of the public faces) and the results of the inquiry.

• Joyce Meyer. She responded fully to Grassley’s questions, joined the Evangelical Council for Financial Accountability (ECFA), and discloses her annual revenue to MinistryWatch (about $110 million per year).
• Benny Hinn also gave complete answers to Grassley’s questions. However, his organization gave MinistryWatch no information to evaluate. His ministry’s income is about the same as Meyer’s.
• Kenneth Copeland: incomplete information. He claimed (go here and search “Torpedoed!”) that his 40-year-old ministry has taken in a total of about $1.5 billion. MinistryWatch grade: no information.
• Creflo Dollar: incomplete information. MinistryWatch grade: no information.
• Eddie Long: incomplete information and not listed in MinistryWatch.
• Paula White: incomplete information and not listed in MinistryWatch.

Let’s dwell on this a moment. A U.S. senator asks for information, as the Senate Finance Committee is empowered to do, and he is (more or less) given the finger. And there is no fallout? These ministries can tap dance away from this request for information with no meaningful loss of face? The faithful still shower them with $100 million per year? What kind of disconnect from reality is this?

This is a contract between U.S. taxpayers and these nonprofit organizations, mediated by the IRS. We provide the nonprofit status and, in return, they prove that they deserve that status. If religious organizations policed themselves and they made their finances public (by voluntarily submitting their information to the IRS like all other nonprofits), this wouldn’t be a problem. But they don’t. With $100 billion in tax-exempt contributions to the religion industry every year, shielded from inspection, it’s obvious that this exemption is a bad idea.

Grassley’s concerns

A memo prepared by Sen. Grassley’s staff highlights some of the foundational principles that are relevant to this discussion.

The Constitution does not require the government to exempt churches from federal income taxation or from filing tax and information returns.

And:

Requiring churches to file an annual information return does not offend either the Free Exercise Clause or the Establishment Clause [of the First Amendment].

Some ministries have complained that an obligatory filing would entangle the government in church business, but the opposite may be more accurate. Today, the IRS must define what a church is, since the legal code doesn’t. For example, after a long legal battle, Scientology was granted tax-exempt status as a church. Putting churches in the same bin as other nonprofits would eliminate this unwelcome role for the IRS.

The Grassley memo admits that there should be no constitutional problem with a level playing field, but it argues that some problems will remain:

• Eliminating the exemption “would unnecessarily burden the overwhelming majority of churches.” Why? The 1.5 million nonprofits with less than $100,000 in annual income can follow the rules. Surely a church that can keep its books can fill out a four-page 990-EZ form. The only tough part is taking that deep breath and disclosing to the world how you spend your income.
• This would burden the IRS’s Exempt Organizations Office, which is stretched as it is. When a ministry is simply a piggy bank for a few people at the top, no laws are being broken. Things change if we can force the churches to commit publicly. Let’s let a little sunshine in and let public scrutiny (and possible condemnation) do its work. Could a sleazy ministry lie? Of course, but when it does, it’s now breaking the law. At that point, there’s a crime that the IRS can go after and assets that can help fund the process.
• This would be contrary to the intent of Congress. True, but the desires of Congress can change. If ordinary Christians, embarrassed by the secrecy of churches, demanded a level playing field for all nonprofits, Congress just might turn around. Without public demand, there will be no energy for this initiative.

Next steps

The ECFA is a good step. Though it’s expensive to join, it provides what amounts to a Good Housekeeping seal of approval to ministries that abide by its code. But even they don’t demand that salaries be revealed, and members need only provide financial information on written request. It’s a baby step, when a level playing field is the obvious solution.

The IRS has a form 990 and 1.5 million nonprofit organizations already using it. It works. It should be our window into the operation of all nonprofits, including churches.

What are the next steps? An atheist organization like the Freedom From Religion Foundation could file lawsuits, but a push for this from within the Christian community would be far more effective. Christians, you have the power. Aren’t you embarrassed by being lumped in with the worst of the televangelists? Wouldn’t you like to see some public scrutiny on Scientology and other organizations hiding behind this loophole?

You won’t like me when I’m angry, 
because I always back up my rage 
with facts and documented sources.
— the Credible Hulk

(This is an update of a post that originally appeared 5/9/12.)

Photo credit: Wikimedia

The Freedom From Religion Foundation is a freethought organization that has won some high-profile lawsuits supporting the separation of church and state. It is also known for displaying freethought statements to balance religious Christmas messages on state property.

Want to know what the revenue of the FFRF is? For 2012, it was $3,075,998. Exactly.

Want to know how I know that? I looked it up; it’s public information. That’s true for all U.S. nonprofits. All nonprofits, that is, except churches.

Church transparency

Isn’t it startling that church leaders, who supposedly believe that the all-knowing Accountant in the Sky will judge them eternally for how ethically they spend the money given by parishioners, are embarrassed to show their financial records to the rest of us? That they want church donations to be tax exempt but refuse to show the public (which is picking up the slack for the missing taxes) how they spend this money?

What do you suppose they have to hide?

The Freedom From Religion Foundation’s form 990 has a bold “Open to Public Inspection” at the top. The form gives the salaries of each staff member, to the dollar. It shows revenue, expenses, cash in the bank, mortgages, and lots more financial details. They seem to shoulder this burden pretty well, and I think churches can, too.

Go to GuideStar, the Foundation Center, or similar organizations to look up any nonprofit to which you’re considering a donation to check how they spend their money.

Any nonprofit, that is, except churches.

What Would Jesus Do?

Let’s remember what religion we’re talking about. It’s the religion that tells the story of the rich man who was too attached to his wealth to follow Jesus’s command, “Sell everything you have and give to the poor, and you will have treasure in heaven” (Mark 10:17–31). It’s the religion in which Jesus will say to the worthy people, “Whatever you did for one of the least of these brothers and sisters of mine, you did for me” (Matt. 25:31–46). And, “It is easier for a camel to go through the eye of a needle than for a rich man to enter the kingdom of God” (Luke 18:25). And, “Do not store up for yourselves treasures on earth … but store up for yourselves treasures in heaven … for where your treasure is, there your heart will be also” (Matt. 6:19–21).

Apparently Jesus didn’t care much for rich people but cared greatly for the poor. How do you suppose he would react to churches being secretive today about how they spend the money given to them? About churches exempting themselves from the requirement to open their books?

Some groups are trying to fix this problem. The Evangelical Council for Financial Accountability imposes on its members standards of financial accountability and transparency. It’s a nice step. I wish all large ministries and churches followed these rules.

MinistryWatch is a clearinghouse that compares financial and governance information from ministries. But this is just a baby step. MinistryWatch has only about 500 ministries in their list when there are an estimated 350,000 congregations in the U.S.

And many of the ministries don’t get a five-star rating. In fact, those who get zero or one star are a Who’s Who of high-profile televangelists and religious newsmakers: Benny Hinn, Rod Parsley, Creflo Dollar, Paul and Jan Crouch and the Trinity Broadcasting Network, John Hagee, Kenneth Copeland, TD Jakes, R.C. Sproul, Chuck Colson, Harold Camping’s Family Radio, and Ken Ham’s Answers in Genesis.

Some churches are open about their finances, but only to members. According to one survey, 92% of churches provide financial information upon request to members. Why is this not 100%? And what good is this to the U.S. taxpayer who wants to verify the claimed benefit that churches provide a good to society that earns them nonprofit status? Compare this with the financial records of the more than 1.5 million ordinary nonprofits easily accessible in a single database.

A request for change

Let’s make a simple, logical change—a change that helps churches look better. This cloud of doubt hangs over every church. The change costs churches and other ministries very little and makes things fair, and it shows that they have nothing to hide. Remove the exemption allowing churches to avoid providing financial information.

Some ministries will have to clean up their acts, but isn’t that a good thing? Doesn’t this benefit the Christians at the churches that spend their income honorably?

If there really is a God
who created the entire universe with all of its glories,
and He decides to deliver a message to humanity,
He will not use, as His messenger,
a person on cable TV with a bad hairstyle.
— Dave Barry

(This is an update of a post that originally appeared 5/7/12.)

Photo credit: IRS

The U.S. Supreme Court recently concluded in Town of Greece v. Galloway that prayer is allowable in city council meetings. I’d rather see prayer excluded—it’s hard to imagine Christians justifiably claiming injury with the elimination of this perk—but I don’t think it will amount to much. In fact, I think we’ve seen a parallel situation already that plays out satisfactorily (but more on that below).

The town of Greece, NY has for years opened its monthly meetings almost exclusively with Christian prayers, and the Supreme Court has now approved this policy. Jeff Schweitzer at RichardDawkins.net responds,

A government action is invalid if it creates a perception in the mind of a reasonable observer that the government is either endorsing or disapproving of religion. Well, c’mon: excluding all religions but one is by any standard an endorsement of that one remaining religion.

I agree. The Supreme Court’s Lemon Test places several demands on actions like this, including that the law must have a genuine secular or civil purpose (more here), and I see none.

About this slap in the face to non-Christians, Justice Kennedy’s decision says,

Adults often encounter speech they find disagreeable; and an Establishment Clause violation is not made out any time a person experiences a sense of affront from the expression of contrary religious views in a legislative forum.

I’m the first to agree that the price of free speech is that we’ll come across things we dislike. As Ricky Gervais put it, “You have the right to be offended, and I have the right to offend you.” But we’re talking here about government speech. The First Amendment applies to citizens, not city councils, and taxpaying citizens of the town of Greece must sit through state-sponsored prayer to talk to their own government.

Christian excesses

No one can be surprised that we are immediately seeing some Christians cobbling together a clumsy interpretation that suits their agenda. One member of a county board of supervisors in Virginia, with an attitude that would make history revisionist David Barton proud, said:

Freedom of religion doesn’t mean that every religion has to be heard. If we allow everything … where do you draw the line?

You don’t, since it’s all or nothing. The Greece decision demands a nondiscrimination policy toward the prayers.

A more powerful voice is that of Alabama’s Chief Justice Roy Moore, who said that freedom of religion applies only to Christians. His justification, which is completely counter to the secular U.S. Constitution: “Buddha didn’t create us. Muhammad didn’t create us. It’s the God of the Holy Scripture.”

We live in interesting times.

Applicability of another amendment

One Christian response takes a typically clueless view of the First Amendment’s Establishment Clause (“Congress shall make no law respecting an establishment of religion”):

The national Legislative branch (and by implication, the Executive and Judicial Branches), shall not establish a national church nor shall it meddle with the free exercise of religion on the state, local, or individual level. This is a matter of historical fact.

What’s a matter of historical fact is that the 14th Amendment extends the constraints on Congress to all levels of government and that this extension has applied to the Establishment Clause since 1947.

So where is the problem, exactly?

To the Christians who think that this decision strikes a powerful blow and introduces important new freedoms, I have a few questions. No Christian prayer at the city board meeting is a problem? Seriously? You don’t get enough Christianity in the rest of your life that you have to be topped up at this meeting?

Or is it the sanction of the state what you’re after? A pat on the head from an authority to assure you that you’ve backed the right horse? That is, you acknowledge that there is no legitimate secular purpose, but you want to hijack the state to proclaim your message?

Is the goal to get everyone in a serious or productive mood? Surely Christianity isn’t the only (or even best) source for this.

Is your goal to get God’s blessing on the council’s work? Then ask for that on your own. If your small voice isn’t enough to rouse God, note that you share that problem with the priests of Baal. Elijah taunted them: “Shout louder! Surely he is a god! Perhaps he is deep in thought, or busy, or traveling. Maybe he is sleeping and must be awakened” (1 Kings 18:27).

How this will unfold

I think I can anticipate how the results of this decision will play out, and I don’t think it’s that big a deal.

Remember how the War on Christmas debate unfolds in any particular town. First, we have years or decades of unquestioned government support of a Christian display on city property. Next, non-Christians request that city property not be used for divisive sectarian purposes like this. The city council decides that they can keep the status quo and avoid lawsuits if they make a clear policy allowing all comers. When Christmas rolls around again, the city honors diverse requests for public displays, and city property is now festooned with displays celebrating Hanukkah, Saturnalia, Yule, Festivus, and the Flying Spaghetti Monster along with the manger scene. Christians are outraged at the cacophony, and the city council removes all religious displays from their property, like they were asked to do initially. Christians conclude that manger scenes at churches and in front of homes work just fine.

And secularists wonder why this outcome wasn’t obvious from the beginning. (I’ve written more on the War on Christmas here.)

We’re seeing this progression in Oklahoma City, where a Satanic monument is planned for public space to compete with an existing Ten Commandments monument (see the image of Baphomet above). We’re also seeing it in the town of Greece, where the city council has already heard a Wiccan prayer asking for wisdom from Athena and Apollo.

Are the threats and lawsuits really necessary? Can’t smart Christians see where this is headed and, as with the Christmas displays on public property, quickly move their local governments to the logical end of this process where no prayers at all are allowed?

Imagine how refreshing it would be to have at least one justice out of nine say,
“Religion has no place in government meetings, period. Next case.”
— Luis Granados, director of Humanist Press

Photo credit: Micael Tattoo Faccio