RSS

Different

Recently, I was in Minneapolis for Norma Pederson’s memorial service.¹ (Her husband, Wayne, president of Reach Beyond, Colorado Springs, serves on ECFA’s board of directors.)

My friend Leith Anderson, president of the National Association of Evangelicals, shared a thoughtful message that day. He spoke of the second century Greek philosopher, Aristides. Around the year 125 A.D., he wrote this description of the faith, life, and behavior of Christians: “If any righteous man among them passes from the world, they rejoice and offer thanks to God; and they escort his body as if he were setting out from one place to another near.”² It wasn’t that Christians didn’t cry or grieve, it just wasn’t like everyone else.

Aristides explained to King Hadrian that followers of Jesus Christ were different. They were different at death because of the way they rejoiced and thanked God. Aristides was so impressed by how different Christians were that he later became a follower of Christ.

Aristides also noted they were different in life: “Falsehood is not found among them . . . .” He was saying followers of Christ could be trusted. Nearly 2,000 years later, surely the same should be true of us.

Trust is like a phenomenon of nature, like Niagara Falls or the Grand Canyon. You can’t talk to it. It can’t talk to you. All you can do is stand back and be awed by it. Aristides was awed by the trustworthiness of Christians!

Trusted ministries flourish. Without trust, at best ministries flounder—at worst they fail and disappear from the nonprofit landscape.

A Christ-centered ministry that lacks trust is like a teenager running through a fireworks factory holding a lit blowtorch. It isn’t whether something is going to blow up—it’s just a matter of when.

When we are trusted, we keep Christ on center stage. When our ministries lack trust, the issues that created the lack of trust are on center stage and Christ is in the wings.

We pay for the lack of trust in many ways. “When trust is low, speed goes down and cost goes up. When trust is high, speed goes up and cost goes down.”³ In ministry terms, speed equates to efficiency; our timeliness in fulfilling our mission.

Inside a Christ-centered nonprofit, low trust appears in the form of these:

  • Office politics. When a ministry lacks trust, the office politics machine runs at full speed—dividing a ministry against itself. This results in wasted time, talent, energy, and money.
  • Disengagement. The lack of trust causes staff members to disengage. They want to avoid getting fired, but they don’t contribute their full talent, creativity, energy, or passion.
  • Turnover. High performers want to work in a high-trust environment. An individual employed by a ministry low on trust may feel trapped because of a lack of other job opportunities. When trust is low, turnover is disproportionately high— losing the people you least want to lose.
  • Fraud. An employee working for a ministry with trust issues may inappropriately feel justified to commit fraud.4

Trust enhances the following (and much more):

  • Donors will choose trust. When a serious breach of trust occurs, donors flee as sure as leaves fall from trees in autumn. When there are so many trustworthy ministries to support, donors will choose trust.
  • Volunteers will choose trust. A volunteer’s time is a precious commodity. Given the choice between volunteering for a trusted ministry and one with trust issues, volunteers will choose trust.
  • Board members will choose trust. When a breach of trust occurs with a ministry, some board members may resign; others will count the days until their term is completed. In the final analysis, board members will choose trust.
  • Collaborators will choose trust. This is the day of collaboration between ministries—and well it should be. The most meaningful collaboration occurs between trusted partners. Collaborators will choose trust.

What do followers of Christ do when trust is broken? We grieve. We admit that what we did was wrong without trying to justify our actions. We ask for forgiveness. We take steps to ensure that we will not repeat the actions that caused trust to be broken. This does not ensure that trust will always be regained—but they are the right steps to take. Period.

Followers of Christ are different. We are different in death. We are different in life. May we live as Aristides found the early believers: “Falsehood is not found among them . . . .” This is fundamental to keeping Christ on center stage.

1 For a tribute to Norma’s life, see http://reachbeyond.org/read/13286/ late-wife-of-ministryleader-known-for-servant-heart-loving-spirit.

2 Kay, D. M., The Apology of Aristides the Philosopher, http://www.earlychristianwritings.com/text/aristides-kay.html.

3 Covey, Stephen M.R., The Speed of Trust, Free Press, 2006, p. 13.

4 3 Big Ideas About The Speed of Trust™, http://www.myspeedoftrust.com/how-the-speed-of-trust-works/business _case.

 

 
Comments Off

Posted by on July 25, 2014 in Integrity

 

A Deficit of Trust and Truth

Trust is difficult to earn, easy to lose, and even more difficult to regain.

It has been said  “Trust leaves on horseback and returns on foot.” If true, there is no wonder it feels like the Kentucky Derby, Belmont Stakes, and Preakness Stakes have all three been running 24/7 in some high circles in the United States.

As just one example, with disturbing disclosures made in May of this year, the current trust deficit of the IRS is hard to measure. Five nonprofit IRS officials have been replaced—some whom I have known, some with whom I have had private meetings in the recent past, including Lois Lerner—are all gone. Then, there were the extravagant IRS conferences, the line-dancing video, and more. Clearly, trust left the IRS on horseback.

What can we learn from this? If we as Christian leaders desire to be trusted, just saying “trust us” is not enough. We must demonstrate trustworthiness. We must lead organizations in which people can place their trust and be assured that their trust will not be betrayed.

Trust and truth are inextricably intertwined. People may not trust us even though we tell the truth, but not telling the truth ensures lack of trust.

The Bible provides the baseline for truth: “Whatsoever things are true, whatsoever things are honest, whatsoever things are just, whatsoever things are pure, whatsoever things are lovely, whatsoever things are of good report; if there be any virtue, and if there be any praise, think on these things” (2 Timothy 4:8).

Francis Schaeffer said, “Today not only in philosophy but in politics, government, and individual morality, our generation sees solutions in terms of synthesis and not absolutes. When this happens, truth, as people have always thought of truth, has died.” And Sir Winston Churchill once said, “Men occasionally stumble over the truth, but most of them pick themselves up and hurry off as if nothing ever happened.”

How can Christ-centered organizations be beacons of trust and truth in an environment where these qualities are often lacking? Let me suggest a few principles.

  1. Exemplify truth in all we do—internally and externally. For our organizations, it means truthfully accounting for our operations and ministry outcomes. Exemplifying truth starts with a keen understanding of what is true and false.
  2. Add clarity to truth. Start with truth and then add clarity. Nowhere is this needed more than in our communications with our constituents, especially with givers and potential givers. There is often a tendency to be expansive in explaining ministry accomplishments. After all, isn’t it all about how much ministry impact we can claim? Fuzziness—or worse, exaggeration—in our funding and other communications can easily turn into lost trust. The concepts of truthfulness in our communications with givers are embedded in ECFA’s stewardship standards. They are increasingly important as givers tend to focus more on ministry outcomes.

  3. Be exemplary in managing resources. One of the key ways we gain trust is how we steward God’s resources. Christ-centered organizations are not unlike the people described in the parable of the talents—we all have different amounts of resources with which to work. Yet, we are all called to steward what we have been given as unto the Lord.

From the parable, we see that the servants didn’t get to keep the money for themselves. The two successful servants aren’t working for their own increase—they are working for the increase of their master. Their true reward is sharing in their master’s happiness, and their own happiness comes from serving others.

So it is with us. We are stewards of the Master’s money. We don’t get to keep it for ourselves. We are working for the increase of our Master!

Enhancing trust is what ECFA does. For 34 years, the ECFA peer accountability concept has had a tremendous impact by creating and maintaining trust. But, in the final analysis, it is up to you—up to your organization—to create and maintain an atmosphere of trust with your constituents. May it be said of us: “The works of his hands are faithful and just; all his precepts are trustworthy” (Psalm 111:7).

 
Comments Off

Posted by on October 18, 2013 in Uncategorized

 

Are Churches Nothing More than Clubs for Believers?

That was the view articulated this month by one prominent nonprofit tax professor:  Churches are just social clubs for believers, so they should not receive the same tax benefits and giving incentives as other charities. During this time when our nation is in serious financial trouble, and Congress is earnestly seeking solutions for comprehensive tax reform, ideas like this are significant and must be addressed.

But let’s step back for a moment and understand the context. In the last two months, I’ve written in Crosswalk about the latest finance-related activities and discussions on Capitol Hill and how they specifically impact churches (The Fiscal Cliff and Its Impact on Churches and The Charitable Giving Deduction and Churches). These developments continue to unfold as both the House Ways & Means Committee and the Senate Finance Committee are in meetings to move forward tax reform proposals, which specifically include changes to the laws governing charitable and tax-exempt organizations like churches.

And while it is uncertain whether or not Congress could actually achieve such an undertaking in today’s politically-charged climate, one thing is for sure. Our nation’s financial crisis is not going away, and one day lawmakers will be forced to do something about the billion-dollar budget deficits each year and the mounting $16 trillion debt. Churches and other charities have become targets as Congress desperately seeks a way out of its financial mess.

Enter John Colombo, the outspoken nonprofit professor whom I mentioned in opening this article. Professor Colombo got some attention for his recent comments in a nonprofit law blog regarding churches and their place in the tax system. While admitting that some churches do contribute to the public good by helping the poor and disadvantaged, he expressed his opinion that churches should not be given the same tax benefits as other charities because “many are nothing more than social clubs for believers.”

Professor Colombo went on to argue that taxing churches would be completely constitutional and that donors should not get the same benefit of the charitable deduction when they give to churches as when they give to other charitable organizations. “So let’s give churches the same tax benefits we give all social clubs and nothing more,” he concluded.

In ECFA’s written comments to the House Ways & Means Committee in February, I argued for Congress to preserve—if not strengthen—current charitable giving incentives. Specifically, I emphasized the indispensable role that churches and other religious organizations fill in our communities, not only through their religious teaching and discipleship but also in the countless ways they serve millions of Americans from all walks of life:

These houses of worship offer religious and moral instruction to millions of Americans across the country on a weekly basis. The value provided by churches extends, though, beyond religious and moral instruction to meeting the wide spectrum of human, mental, physical, and emotional needs. Churches provide meals to the hungry and clothing for the poor, education and leadership training for people in all stages and walks of life, opportunities for the community to connect and serve together, care to the sick and bereavement for their families, financial support and community development in America and overseas, assistance to those recovering from alcohol, drugs, and other addictions, and countless other ministries. Truly, there is no way to measure all of the impact of the hundreds of thousands of religious congregations in the United States.

Of course, we know the church is much more than just a social club for believers. Since the time of Christ, the church has literally transformed individual lives and entire societies. We receive biblical teaching in the church that directs us from our selfish sin nature into becoming Christ-like disciples. But the Bible teaches that our lives are not changed through the church simply for our own benefit—we are meant to love and serve others and share the same truth of the Gospel that changed us from the inside out.

The founders of our nation certainly understood the valuable role of churches and religion. President John Adams observed, “Our Constitution was made only for a moral and religious people. It is wholly inadequate to the government of any other.” As I shared in my February testimony for the Ways & Means Committee, “Religious congregations provide an environment for discipleship and instill strong virtues necessary for democracy.”

Churches and religious institutions have long received the same tax benefits and giving incentives as other charities. In fact, since our nation’s earliest federal income tax codes, “religious” organizations have been the first ones listed as recognized for tax-exempt purposes. Not only that, religious values also inspire other recognized tax-exempt purposes like charity, education, and others.

As Congress continues working through the challenging financial issues facing our country, it is incumbent upon us as believers to speak out on the valuable benefits that our churches and other Christ-centered organizations provide. While biblical principles should always guide our commitment to giving, we should also seek to preserve the tax benefits and giving incentives historically guaranteed churches that are afforded to all other charitable organizations. Religion and religious-based causes should not be discriminated against in our country that was founded in part to promote religious belief and freedom.

Ideas have consequences, and while the majority of people today would probably disagree with Professor Colombo’s conclusion that churches are “nothing more than clubs for believers,” we must do our part to reject these dangerous ideas—not only in our words but, more importantly, in our actions, just as Christ taught us to do.

 
Comments Off

Posted by on May 9, 2013 in Uncategorized

 

The Charitable Giving Deduction and Churches

The tax deductibility of gifts to churches and other charities continues to be an issue of high interest on Capitol Hill. In the 2012 Presidential race, both candidates proposed capping the charitable deduction—so this is hardly a partisan issue.

Even though supporters of churches are generally more committed to make charitable gifts as compared with those who give for other charitable purposes, any reduction in giving incentives would not be good news for churches.

The recent hearings conducted by the House Ways and Means Committee provided more evidence of the interest of Congress in tax deductions claimed by those making charitable gifts. Forty-three representatives of nonprofit organizations made their way to the Hill on Valentine’s Day to share their ideas on this issue.

Some of the positions shared with the Committee but those presenting testimony:

  • Non-itemizers.  Presently those who do not itemize deductions on Schedule A do not receive a charitable deduction benefit. There was some sentiment expressed for expanding access to the deduction.
  • Charitable deduction floor.  For those who currently itemize their deductions, charitable gifts are deductible from the first dollar given.  Here is how a charitable deduction floor would work: Only gifts above a certain dollar floor, let’s say $100, would be deductible. So, ever itemizer would “lose” a deduction for the first $100 they give each year.
  • IRA rollover.  The Individual Retirement Account (IRA) rollover is a provision givers have enjoyed for a number of years—but it is not a permanent provision in the tax law. The benefits must be extended from year to year. Conrad Teitell, noted charitable tax attorney, urged Congress to make permanent the provision that allows direct tax-free distributions from IRAs to charity. Unless Congress acts to extend the provision, it expires at the end of 2013.

What may come from the current debate about the charitable deduction? Only the Lord knows—literally—but while it is unlikely we will see the charitable deduction disappear, it is very possible that changes will be made as a part of tax reform, resulting in a reduction of incentives to make charitable contributions.

In Mr. Teitell’s recent testimony before the Committee, he warned against tinkering with the current charitable giving deduction. He said we should beware of salami tactics which Congress might use with respect to the charitable giving deduction. The term “salami tactics” was coined by Matyas Rakosi, a Hungarian politician in the 1950s. Matyas said:

If your opponent has a salami and you want it for your very own, you must not grab it — because he will defend it. Instead take for yourself a small slice and he will not notice it. Or, if he does, he will not mind very much. And then you take another slice, and then another slice. And slowly but surely, that salami will pass from his possession into yours.

So it could be with the charitable tax incentives — a slice here and a slice there. Caps can be lowered, floors raised and credits reduced. And before you know it our nation’s unique tax encouragement to charitable giving would disappear.

In the light of the discussions about reducing charitable gift incentives, what should churches do?  Here are just a few of the basics:

  • Inform congregants to take advantage of the current charitable giving incentives:
    • Gifts of cash (and checks).  Cash gifts to churches are deductible up to 50 percent of a taxpayer’s adjusted gross income.
    • Gifts of stock.  Gifts of publicly held stock to churches that has been held 12 months or longer are deductible up to 30 percent of a taxpayer’s adjusted gross income.
    • Gifts of real estate.  Gifts of real estate  that has been held 12 months of longer are deductible up to 30 percent of a taxpayer’s adjusted gross income.
    • Rollovers from Individual Retirement Accounts (IRAs).  An individual age 70-1/2 or older can make outright charitable gifts from an IRA—including required minimum distributions—of up to $100,000 to a church (or other public charities) and not have to report the IRA distributions as taxable income on his or her federal income tax return.  A charitable deduction is not allowable for the amount transferred to charity from an IRA, but the donor is not taxable on the amount transferred.  Not being taxable on income that would otherwise be taxable is the equivalent of a charitable deduction.  This benefit is available even if the taxpayer does not itemize his or her deductions.
  • Encourage generosity toward God.  If Christians use the charitable deduction as a basis to support their church they are acting more like the rest of our culture. Generosity toward God should not be not dependent on a charitable tax deduction.

As my friend Wes Willmer says, “Scripture consistently reminds us that if Christ is not first in the use of our money, He is not first in our lives.  Our use of possessions demonstrates materially our spiritual status. Is it possible that our checkbooks are a better measure of our spiritual condition than the underlining in our Bibles?”

Since God owns it all (and He has no lack of resources), we must steward our resources to edify the body of Christ. Regardless of what happens with charitable giving incentives may our hearts be drawn closer to God and the priorities of His Kingdom!

 
Comments Off

Posted by on May 8, 2013 in Giving and Philanthropy, IRS

 

Then and Now

“If ECFA had not been formed, another organization would have been needed to fill its role,” said Lauren Libby, ECFA board member and TWR president.

Still, questions are sometimes asked, such as  “Where would we be if there were no ECFA?”;  “Why ECFA?”; and  “Why does ECFA get to set biblically-based standards for nonprofits in the areas of sound governance, financial oversight and accountability, and stewardship practices?”

To answer these questions, it is helpful to take a brief look at history. Thirty-four years ago, there was no evangelical organization setting standards for sound governance, financial oversight and accountability, and stewardship practices.

Billy Graham and a handful of other leaders had a vision to serve the evangelical community by forming ECFA. They envisioned an evangelical organization which set high standards, accrediting other evangelical organizations. Ministries would voluntarily apply, requesting to be held accountable for compliance with the standards.

The leaders knew that ECFA would not provide integrity to a ministry; ECFA accreditation would be an external reflection of a ministry’s internal integrity.

In 1979, significant questions were being raised about how certain religious leaders were handling funds provided by their supporters. In those days, the media was quick to criticize ministry leaders and extrapolate the misgivings of a few to the entire religious community. Sound familiar? There is generally a similar rush to judgment by today’s media.

Thirty-four years ago, ECFA took a stand on behalf of religious organizations—for self-regulation and against additional government oversight. Today, through the Commission on Accountability and Policy for Religious Organizations, ECFA is doing exactly the same thing as it facilitates responses to Senator Charles Grassley on a host of nonprofit tax policy issues.

Commission Chairman Michael Batts said,  “ECFA exists to foster a policy of integrity in the form of self-regulation and accreditation without burdensome government regulation. That’s what ECFA exists to do. It is an opportunity to provide meaningful input into these areas that will really make a positive difference for the Kingdom.”

So, what are the differences between then and now? Then, there were no standards for governance, oversight of finances, and the raising and handling of charitable gifts. Then, there was no peer group to accredit evangelical organizations—no standards to achieve and no accreditation of Christ-centered organizations.

Now, ECFA’s standards are a model for the Christ-centered arena and other accrediting organizations. Even the Internal Revenue Service has come to embrace some of the governance principles of ECFA’s standards as their own.

Today, ECFA has a time-tested approach of accrediting Christ-centered organizations and assuring their supporters that they are complying with all of the standards—all of the time.

Today, more and more givers look for the ECFA seal of approval. ECFA helps accredited organizations operate within the ECFA guideposts—think of them as a guardrails or bumper guards. These guideposts allow more freedom to provide ministry within the parameters than if there were no standards to follow.

What was once a dream has become a reality. Today nearly 1,750 Christ-centered organizations, with 1,200 related entities and programs, are demonstrating integrity in that they utilize independent boards, engage independent CPAs for their annual financial statements, avoid conflicts of interest, handle charitable gifts with care, and much more.

So, “Why ECFA?” Because for more than three decades, ECFA has modeled consistent, confidential, and fair application of high standards—many of them beyond the law. The ECFA seal enhances trust of givers, providing increased resources for ECFA accredited churches and nonprofits to fulfill the Great Commission. Christ-centered organizations increasingly want to participate in ECFA’s peer accountability process, so they can show third-party accreditation as evidence of integrity, transparency, and accountability.

 
Comments Off

Posted by on May 7, 2013 in ECFA, Integrity

 

The Fiscal Cliff and Its Impact on Churches

Giving to churches is flat. No turnaround of the economy is in sight. Many church attendees are unemployed or underemployed. That’s the bad news.

The good news is that givers to churches are traditionally more dedicated than others. They are more committed to God’s work than concerned about tax deductions for their gifts.

The so-called “fiscal cliff” negotiations in December between President Obama and Congress placed the charitable deduction very much on the table. Since 1917, the deduction has served as a vital giving incentive for charities. There were talks of percentage caps, dollar caps, tax credit substitutes and a variety of other alternatives, which could have cost churches and charities billions of dollars in contributions. Even church supporters were concerned. Anything that would hurt charitable giving is a negative for churches.

Thankfully, the fiscal cliff deal, formally titled the “American Taxpayer Relief Act,” did not result in a flat percentage or aggregative cap on itemized deductions.

There were positives and negatives in the fiscal cliff legislation impacting givers to churches—the “Pease limitation” was included, while the “IRA Rollover” was extended.

Looking at what happened through the fiscal cliff negotiations and with an eye toward the future, how does all this impact churches? Congress is far from through discussing issues which could impact charitable giving incentives.

Looking Back:

The Pease limitation, what some have called a “back-door tax,” was reinstated and became a permanent provision of the tax code through the fiscal cliff deal. Taxpayers must decrease itemized deductions by 3 percent of the amount by which adjusted gross income exceeds a threshold amount. The Pease limitation is not new. It’s been with us in some form since 1990 (except for its repeal in 2010 that lasted through 2012). Plus, it is such an obscure provision that few donors associate it with gift considerations. Bottom line: there’s very little impact on churches associated with the reinstatement of the Pease limitation.

It appeared the special charitable rollover provision relating to contributions from Individual Retirement Accounts was history after it expired on Dec. 31, 2011. Through the fiscal cliff deal, it was renewed retroactively for 2012 and prospectively for 2013, allowing taxpayers age 70-1/2 or older to make direct IRA or Roth IRA distributions up to $100,000 per year to qualifying charities without having to pay income tax on the withdrawn amount.

An additional bonus is that taxpayers can make these distributions by Jan. 31 and treat them as having been made in 2012.

Advantage for Churches

The extension of the IRA charitable rollover provision is clearly helpful to many churches, as retired attendees may desire to give to their churches while meeting their IRA required minimum distributions each year. (In my February column, I will share more ideas of how churches can help givers use this IRA option.)

The most significant element of the fiscal cliff law was the increase in the highest marginal federal income tax rate, from 35 percent to approximately 40 percent (applying to individuals earning more than $400,000 per year and households above $450,000).

Otherwise, the current income tax rates were preserved for most Americans. Especially for higher income donors in your church, the higher marginal rates may provide an additional encouragement to donate generously and reduce individual income tax. The higher capital gains rates in the law likewise provide an added incentive for donating appreciated assets and avoid paying the increased taxes on capital gains.

A significant issue that received little attention in the fiscal cliff talks was the payroll tax reduction which expired on Dec.31, 2012. Lawmakers did not renew the two-percentage-point cut in the employee share of the social security tax. Church attendees who are employed saw smaller paychecks as of January 1, unless they got a raise that offset the impact. Self-employed individuals saw a similar increase in self-employment social security tax.

Looking Forward

Major fiscal and tax policy issues remain unresolved. In the first quarter of 2013, the president and Republicans will duel again over raising the federal debt ceiling and the mandatory spending cuts known as sequestration. The GOP wants federal spending trimmed for every dollar in higher debt. The President will ask for increases in revenue by limiting business deductions. In the end, the ceiling will be raised. Will the charitable deduction be on the chopping block again? It is unclear.

Big picture

Churches continue to have mostly clear sailing on the charitable giving incentives front. While it is helpful for church leaders to have a good working knowledge of charitable gift incentives, enabling them to have meaningful discussions on the tax aspects of charitable giving with attendees, churches should continue their focus on teaching biblical principles of generosity.

 
Comments Off

Posted by on May 6, 2013 in Giving and Philanthropy, Impact of the economy

 

Religious Liberty

We are in the midst of an era of religious liberty challenges.

Religious organizations and religious communities are faced with this new reality:  The federal government has decided that it can and should define two classes of religious organizations, two kinds of religion, and two degrees of religious freedom. Churches, being inwardly oriented, get an exemption—full protection for their convictions and practices. All other religious organizations, being outwardly oriented on service and not only inwardly on worship, are not exercising pure religion, according to the government, and thus only merit a lesser degree of religious freedom—an “accommodation.” This deeply mistaken conception is the biggest problem underlying the contraceptives mandate under the health care law.1

But it doesn’t stop there. “[T]he deeply troubling contemporary trends [are] for laws and regulations themselves to be less accommodating of religion, and for constitutional interpretive schemes to prioritize other values over religious freedom. If these trends continue, then fewer religion-accommodating rules will be allowed to stand, and then fewer court decisions will end up favorable to religious exercise by individuals or institutions.”2

Some positive news came last year with the U.S. Supreme Court’s unanimous Hosanna-Tabor decision, upholding the right of religious organizations to select their ministers without governmental interference.3 Consistent with First Amendment guarantees of religious freedom, the Supreme Court recognized that religious organizations should be autonomous in important matters of self-governance.

Since its founding in 1979, ECFA has played a vital role in preserving the freedom of Christ-centered organizations to carry out the Great Commission. ECFA is unique in that it facilitates an environment for organizations in the Christian faith community to exercise self-government and demonstrate appropriate accountability, alleviating the need for burdensome government oversight.

Critical to ECFA’s success in this area are its time-tested standards requiring accredited members to operate with biblical integrity and excellence in the areas of governance, finances, and fundraising.

Especially in recent years, concerns have been voiced by some donors and lawmakers that leaders of certain nonprofit organizations and related parties are abusing their organization’s tax-exempt status by receiving excessive compensation or other unreasonable financial benefits. In response, the ECFA board has just approved an enhancement to ECFA’s existing standards, including a policy for excellence in compensation-setting and related-party transactions. In doing so, ECFA once again takes a leadership role in promoting and upholding the highest degree of ethical standards within the Christ-centered nonprofit community.

ECFA’s history and present activities demonstrate its strong commitment to religious liberty:

  • ECFA’s founding.  ECFA was formed at a time when the behaviors of some religious institutions caused concern and distrust with the giving public.Leaders in Congress began to question whether they should step in to provide additional government oversight to ensure tax-exempt religious organizations were operating ethically and within the bounds of the law.

    Senator Mark Hatfield met with Christian leaders and encouraged them to form a group where interested organizations could demonstrate integrity and accountability to their donors and the government and, in turn, avoid the need for new burdensome legislation.

  • Commission on Accountability and Policy for Religious Organizations.  The Commission was formed in 2011 at the request of Senator Charles Grassley.The senator’s inquiry into the financial practices of several media-based ministries raised issues concerning whether new legislation would be necessary to regulate the activities of churches and other religious nonprofit organizations.

    Senator Grassley turned to ECFA to address the tax and policy issues raised by his staff’s inquiry. In doing so, he recognized ECFA’s proven track record of self-regulation to avoid unnecessary legislation and preserve religious liberty: “The challenge is to encourage good governance and best practices and so preserve confidence in the tax-exempt sector without imposing regulations that inhibit religious freedom or are functionally ineffective.”4

    ECFA formed the Commission and its panels of religious sector representatives, nonprofit sector representatives, and legal experts—comprised of experienced leaders known for their integrity—to provide input on these issues.

    In the Commission’s report, Commission chairman Michael Batts commented, “Religious freedom is one of the most sacred freedoms we enjoy in the United States and it must be preserved. Religious and other nonprofit organizations positively impact our society in virtually every aspect of life, and their good work is immeasurable. We cannot allow the behavior of a few outliers in the religious and nonprofit sector to threaten the freedoms of those who are not the problem—those who are doing the good work.”

ECFA continues to play a vital role in preserving religious freedom in this country by facilitating an environment of self-government and self-regulation within the Christ-centered nonprofit community. The recent enhancement of the ECFA standards and the latest work of the Commission demonstrate this ongoing commitment by ECFA consistent with its founding over 30 years ago.

The exponential growth of ECFA in recent years demonstrates that Christ-centered organizations are now more interested than ever in assuring the government and the giving public that they properly steward God’s resources with which they have been entrusted.

1  Stanley Carlson-Thies, Institutional Religious Freedom Alliance, eNews for Faith-Based Organizations, November 14, 2012.

2  Stanley Carlson-Thies, Institutional Religious Freedom Alliance, eNews for Faith-Based Organizations</i>, September 11, 2012.

3  Hosanna-Tabor Evangelical Lutheran Church &amp; School v. EEOC, 132 S. Ct. 694 (2012).

4  Press Release, Sen. Charles E. Grassley, Grassley Releases Review of Tax Issues Raised by Media-based Ministries (Jan. 6, 2011), available at http://www.grassley.senate.gov/news/Article.cfm?customel_dataPageID_1502=30359.

 
Comments Off

Posted by on May 6, 2013 in Religious Freesom

 
 
Follow

Get every new post delivered to your Inbox.