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Show Notes - Episode 52

February 14, 2021


“Financial Black Holes”

How Christian Churches and Charities Spend YOUR Money


What is a charity?


A charity is a type of nonprofit but with slightly different purposes and responsibilities than a designated NPO or NFPO. All churches are nonprofits and many also operate as charities.


Source: https://howcharitieswork.com/about-charities/what-is-a-charity/


There are rules that all charities have to follow:


A charity’s aims have to fall into categories that the law says are charitable. These are things like preventing or relieving poverty, or advancing the arts, culture, heritage or science.


It has to be established exclusively for what is known as public benefit. That means its only purpose must be charitable.


Charities can’t make profits. All the money they raise has to go towards achieving their aims. A charity can’t have owners or shareholders who benefit from it.


Now, before I say anything else, I want to state for the record that the vast majority of churches handle funds in a way that they define as ethical and they are typically right at least as often as they're wrong. It's difficult to have a clear image in your head of what “ethical” means when you've been taught to defer every decision you make about everything in life to an imaginary deity. If it's what god wants, it's ethical. Period.


And many times these decisions are made by people who don't stand to gain personally from them so I am willing to say that in their own deluded way of thinking about things, they think they're making good choices. Doesn't make them right, it just makes them typically not greedy assholes trying to fleece the masses for their own benefit.


They've been taught to think a certain way about money, not the least of considerations being that they view the first 10 percent of everyone's income who calls themselves Christians to belong directly to god. I want to further note that I'm speaking primarily about individual churches and not larger bodies like AG Councils (or as I like to refer to them, Pentecostal MAFIA installments) that flat out extort tithes from people in exchange for things like continuing to provide minster's credentials).


Churches and Charities are Big Business


People give away insane amounts of money in tithes and freewill offerings every year and have close to nothing to show for their “investments.” In an article called “Churches are financial black holes - Here’s what Congress can do about it” from Thinkprogress.org, we learn that, “In 2016, Americans donated more than $120 billion to religious organizations, most of which were congregants donating to churches.”


“Christian churches lose $63 billion each year worldwide to internal “ecclesiastical crime,” according to estimates by the Center for the Study of Global Christianity. That’s more than 16 percent of churches’ total income. The director of that study said in 2013 that “as much as 95% of fraud within churches goes undetected or unreported.” And yet, one in 10 Protestant churches still self-reported embezzlement in 2017.” Source: https://archive.thinkprogress.org/churches-susceptible-fraud-congress-file-financial-irs-93830e2be2cd/


Churches and other Christian nonprofits are not always directly to blame. In many cases, fraud is committed by individuals within the organization and the activity is rarely prosecuted or even made public. They keep everything within the confines of board or vestry chambers. Why? Because people would stop giving if they knew this was the kind of thing that was happening:

“Two nuns skimmed $500,000 over a decade from their Catholic school employer and gambled away the cash in Las Vegas, an internal investigation by the school revealed. While the incident seems unbelievable, it’s common, as churches often fall prey to fraud and embezzlement by employees.”


“Recently, it was found that one Michigan priest embezzled about $5.4 million over 26 years. Another in Connecticut stole $1.3 million over seven years, some of which he spent on male escorts. And over nearly a decade, a 67-year-old church clerk for the Archdiocese of New York stole $1 million and spent a decent chunk on collectible dolls.”


Source: https://archive.thinkprogress.org/churches-susceptible-fraud-congress-file-financial-irs-93830e2be2cd/


I do think it's significant to mention that it is very rarely the pastor of an evangelical church who turns out to be guilty of fraud. That doesn't include megachurch televangelists like Joel Osteen and Kenneth Copeland. They are their own brand of evil. Churches with sizable staffs are often targeted by employees in areas of the ministry that wouldn't be primarily suspect. Lots of secretaries, paid ministry heads, even cleaning staff have been known to figure out ways to make their association with the organization more lucrative. Then again, sometimes they're more high profile, like say... the treasurer!

“[One] treasurer of the national Episcopal Church [once] embezzled more than $2.2 million from church’s coffers over five years.” (ibid)


Now, the pastor may not be the one pulling off the heist, but he or she is typically the head of the board or vestry and is also the one who ultimately decides (even in more democratically run leadership models) whether or not to prosecute the offenders. This raises questions of the levels of honesty and integrity coming from the pulpit.


So why are churches particular targets of things like embezzlement and fraud? Simply put, it's easy to steal from a church because they don't keep records like other nonprofits and the larger ones collect lots of money, plenty of it in cash. There are also fewer requirements for churches under federal law. For example, “churches are exempt from filing financial information with the IRS, including the annual Form 990, which tracks every penny that comes into a secular nonprofit and every penny it spends.” This is where the term “financial black holes” comes from. (ibid)


Why do churches get special treatment? It's significant to note that the only reason there is less accountability for churches is because congress doesn't exercise its privilege to require it. There is no constitutional roadblock whatsoever to demanding a Form 990 or any of its variants based solely on the fact that the nonprofit is a church. The letter of the law does NOT differentiate between a church-based charity and a secular nonprofit. Churches in the U.S. get away with nondisclosure because the government lets them. If you want to see that change, bring it up with your congressmen. They are the ones letting it happen.


There is, of course, the matter of all that cash, too....


I don't know about you but when “the brethren” (as my pastor used to refer to them) passed the plate, they weren't carrying receipt pads. If you wanted a receipt, you had to write a check and your receipt came in the form of your canceled check. You could also use an offering envelope and use cash and your contributions would be tracked so you could write off your tithes on your taxes for that year. So it was kept track of for individual purposes, but not for organizational ones. Tithing in cash was never discouraged in our church but I did see plenty of groups and guest speakers who came in and angled heavily for cash. Few of them made any provision for tracking your donations but the church I attended had a policy of collecting the money and writing checks so you could, if you wanted to, still use an offering envelope and get “credit” for your donation, even though the cash literally walked right out the door unaccounted for on any IRS document.


It is very easy to shelter and even outright steal cash, for individuals who choose to take that route when handling church funds and, at the end of the day, who really knows just how big a problem this actually is. The numbers come from churches with enough ethics to disclose. That doesn't account for all of them. Not by a longshot.


And let me tell you... there's A LOT of cash. I know. I had to count it from time to time.


Now, I'm not saying that it's a given that this happens. My home church, for example, required three people present when money was counted to ensure that the money collected from people's tithes and offerings went where it belonged and, sorry, it's hard to find three guys who will act as accomplices unless it's their own grift. When I received stipends for guest speaking or on other occasions, an offering was taken and tallied and I got a check from the church who, in turn, reported the disbursement in the annual report but not, I don't think, to the IRS. I was an employee the summer I interned so I had taxable W2 income from that. The offerings did not come with paystubs and the amounts did not appear on my W2s. I got about $700 that summer in offerings above and beyond my salary... and was encouraged to tithe on it. Because of course I was.


So the point is that they can, and do, play fast and loose with cash, even when it's documented because the documentation doesn't have to be shared with the IRS. That money I got was income, pure and simple, but it wasn't taxed. It was up to me to decide whether or not to report it. Since they weren't required to report that money to the IRS, they just handed it over, keeping 10 percent with my verbal consent. For legal and taxation purposes, that money flat out didn't exist.


Pastors and Cadillacs


“A nonprofit is based on the simple premise that none of the corporation’s net profit from donations, membership fees or business activities will benefit any individual.” Source: https://www.score.org/resource/what-difference-between-nonprofit-organization-and-charity


So why is it that the pastor tends to have more lifestyle than the average member of the congregation? Simple... even as elected positions, board members typically have good relations with the pastor and that small group of people often has the final say on things like pastor salaries, stipends, and allowances because they were elected to make those kinds of decisions. But if I'm driving an 83 Chevette and the pastor is driving an Escalade, wouldn't that be an example of “benefitting an individual?” From an ethical perspective, yes. From an ecclesiastical perspective, no. Let's not forget that these decisions are made as the result of things like prayer and “discernment.” In the minds of those involved, God himself confirmed that the pastor deserves that money and they are being obedient in approving that salary.


My pastor was one of those Cadillac drivers and just as a little compare and contrast: during my internship in 1992, I worked an average of 70 hours per week and made $120 per week straight. My internship was 15 weeks, giving me a GROSS income of $1800. Add to that the $700 in offering money and I made a whopping $2500 for four months work, working the equivalent of two full-time jobs when calculated at 35 hours per week. My hourly wage for the summer, then, was approximately $2.38. That's what God decided my time was worth.


Now, to be fair, I was lucky to be paid in the first place. Most internships are unpaid, but when you're putting in 70 hours a week... our pastor was pretty big on the notion of the worker being worthy of his hire and I earned that money and then some. I also knew what the pastor made and it was not enough to afford the cars he drove. He made good money, for sure, but not late-model-Cadillac-every-couple-years good. How did he do it?


Answer: he didn't. The church did. And this is also typical. The more honest pastors out there do, in fact, “pay” for those cars, but those payments often come in the form of various allocations and allowances that they get above and beyond their normal salaries. Clothing allowances, book allowances, entertainment allowances (lunches out with colleagues and church volunteers, for example), room and board, and yes, transportation funds, are often monies that are not reported as W2 income.


If they live in a parsonage, the church pays the mortgage and that alone takes a lot of pressure off the pastor in terms of financial responsibilities. If you're not spending $30,000 a year on mortgage and upkeep expenses, you probably can afford that car. Parsonages are rental situations which means the landlord (the church) is responsible for upkeep. Plus, when the church buys a vehicle, they don't pay tax on it which reduces the price considerably and makes it easier for the pastor to own. No benefit to the individual, huh? That's why the pastor drives an escalade and the average congregant drives something considerably less expensive and often doesn't replace their cars anywhere near as regularly. They're paying rent or mortgage plus utilities with no stipends or discretionary funds being applied to their bills and there goes any money that would put a vehicle like that within reach.


Oh, and sometimes the church simply signs over the title to the pastor once the sale is complete and figures out how to arrange stipends or wage garnishments but, again garnishing wages to pay off a vehicle largely involves paper transactions and those garnishments don't directly affect the pastor's income or lifestyle. It's made to look like the pastor paid for it in the annual report so people don't get pissed off over buying the pastor a Cadillac, but just because he gave back funds that were sitting there apart from his base salary doesn't equate, in my opinion, to him actually buying it. Those funds could have been used in other ways that didn't even involve him (or to buy more late model vehicles for the entire church to use), but instead, they were given to him and then given back as a means of “paying” for the car. This is less common, but it does happen.


It's very smoke and mirrors, just like the way Amway diamonds presented their lifestyles. Even at Diamond level, those people could never afford those lifestyles. They were able to afford it by pocketing profits from the largely cash-driven “support materials” systems that they pushed on their downline. Those are the extra funds that would be penciled in as “allowances” in a pastor's salary and could easily elevate Diamond incomes by anywhere from giving them a 50% increase to doubling or tripling the income made on official product distribution, depending on the size of the organization. I don't think the imbalance was anywhere near that in any church I attended, but so many of the expenses that you and I are personally responsible for simply don't affect pastors of large churches.


So churches are... creative in the ways they allocate and use funds, but by and large, without someone infiltrating the system and directly stealing it, the vast majority of those funds are used for church-related purposes … with varying degrees of disclosure or ethics. I believe, because I saw more than the average person there that (at least at the time) my church was generally honest when it came to what they collected. If a dollar was given, a dollar was disclosed within those walls. I do think that, by and large, they went about using that money in responsible ways. However... they did take various liberties in reporting how that money was used because the government didn't hold them accountable for it.


Let's keep in mind that just because something is legal, that doesn't make it ethical and I did have some lingering questions about the ethics behind how some of that money was allocated and who got to spend it on what. I also thought that the pastor being the best-dressed most financially stable person in the church was a poor reflection of the servant leader model.


Even the pastor at Mission Impossible who was far from the best person I ever knew (and I'm being VERY generous putting it that way) once told me that he chose cars that were “within the median of what the average church member drives.” He had a thing for Chevy Luminas – not crap cars, but they were Chevys not Caddies. Not sure what he drives today. Maybe I'll buzz the church next time I'm close to Holmes and look. Or not...


Later on we sat under a pastor who negotiated his salary DOWN when he was selected and worked outside the church laying carpet and vinyl flooring because his congregation was largely blue collar and he wanted them to have a leader to whom they could relate. He drove a Civic with 200,000 miles on it. His backup vehicle was a Civic with 300,000 miles on it with a check engine light that had been on perpetually for about 70,000 miles. Some of them understand. Many more either don't or just don't care.


Over time you grow numb to certain things, like having a conscience about stuff like this, especially when you spend your life being convinced that your prosperity comes from god, not the sacrifices of the actual people who actually put that money in the plate. If god wants them to have an escalade, they're entitled to it and will defend having it with varying levels of composure.


My pastor justified it by saying that luxury cars last longer than economy cars. “If you spend $10,000 on a car and have to replace it every five years or spend $30,000 on a car that you'll have for fifteen years, what's the difference?” The difference, sir, is that you're still trading in your caddies every three years. We have a 2008 Versa with 156,000 miles on it that still runs fine. We paid $10,500 for it, it's been paid off for over 8 years and has been largely trouble free.


The love of money is the root of all evil (1 Tim. 6:10) and the lust for it grows when there's more of it to lust after. I was a huge fan of Rich Mullins back in the day and one of my favorite lines of his was, “Everybody I know says they need just one thing. What they really mean is they need just one thing more...” As churches get bigger, so do things like senses of entitlement over owning cars you can't afford. This is human nature. Only one problem – doesn't the Holy Spirit live in us? And isn't Jesus supposed to be our “wonderful counselor?” If so, why don't Christians think better of these decisions?


Now let's talk about Christian Charities...


There are many, many, many ways that Christian charities misuse and misappropriate funds, and again, the ones that function as churches or are affiliated with established churches never have to account for where the money goes. This is why so many opt for that designation and go as far as to offer church services, Bible studies, and more as part of the “work” they do as charities.


Even the ones that disclose where the money is going still try to keep the agendas of the causes they support hush hush. Anti-gay and pro-life causes are among the leading recipients of funds from Christian charities and because so many of their donors agree with their stands on these issues, it doesn't have an adverse effect on the money coming in.


Chick-Fil-A has learned some hard lessons in this arena and while they aren't a charity, they have been and continue to be very outspoken about the evangelical ideals held by the higher-ups in the company. In the recent past, they stopped giving to two major anti-LGBT causes not because they've seen the light, but because they saw money going away. Get the general public involved and you simply cannot get away with that shit forever, but keep it in your ecclesiastical family and you're going to be OK... usually. Even when what you're doing is exposed to the masses.


Oh, and the move backfired a little too, particularly among evangelicals who accused them of pandering to the “Left-wing mob.” Source: https://www.marketwatch.com/story/chick-fil-a-will-stop-donating-to-the-salvation-army-and-fellowship-of-christian-athletes-and-people-are-furious-2019-11-18


Luckily for them, tasty poultry is still more of a priority to those nay-sayers than their “Christian values.” But I mention Chick-Fil-A because I want to zero in on the charities with which they've severed ties: The Fellowship of Christian Athletes and the Salvation Army.



I'm going to draw from and quote heavily from an article called “Fellowship of Christian Athletes targets LGBTQ community with Statement of Faith” by Emma Nye at Outsports.com.


Source: https://www.outsports.com/2019/1/7/18173087/fellowship-of-christian-athletes-gay-lgbt


The most sinister part of this is, I think is in this quote: “The FCA has descended into the middle and high school level, cementing their bigotry and intolerance at an early age.” 85% of people who don't accept Christ by age 18 never will.” Remember that from our Youth Ministry Agenda episodes? Let's add working the gay out of them to that sentiment, too. Not that gay is something that can ever, ever, no not ever be 'worked out' of anyone...


The Salvation Army


I'll give them credit for one thing: they know how to hire copywriters. This silver-tongued response to anti-gay allegations is nothing short of spectacular. It's also easy to believe if you think like an evangelical or you have no interest in researching the matter further. Well, I'm interested, so let's have a look:

Source: https://www.vox.com/the-goods/2019/12/16/21003560/salvation-army-anti-lgbtq-controversies-donations “The Salvation Army says it doesn’t discriminate against LGBTQ people. Critics say that’s not true.”


[B]ecause our organization is rooted in faith, a chorus repeatedly rises that insists we are anti-LGBTQ. And that refrain is dangerous to the very community we are wrongly accused of rejecting. At minimum, perpetuating rhetoric that vilifies an organization with the reach, housing, programming, and resources that we have in place to lift them up is counterintuitive and inefficient. But when that organization depends on the generosity of donors to provide much-needed assistance to so many across all walks of life, it’s devastating.” - David Hudson, National Commander, Salvation Army


And there IS plenty of crosstalk within the ranks of the Salvation Army, particularly in the area of work they actually do FOR the LGBTQ community. I'll refer to the above article for examples. You can click to read them for yourself.


But they have also found themselves in the middle of a number of controversies just in the last 20 years. Their bigotry toward alternative lifestyles is getting louder over time, regardless of the small bones they toss these communities and people groups in an effort to save a little face. Again, you can click to see the bullet points on this...


A couple more highlights from the article:

“In 2011, the New York Times interviewed a man who claimed the Salvation Army denied him and his boyfriend shelter in the ‘90s “unless we broke up and then left the ‘sinful homosexual lifestyle’ behind,” the man, Bill Browning, said. “We slept on the street, and they didn’t help when we declined to break up at their insistence.”


That's right... break up at once, right here in front of us, DIE TO YOURSELVES right here in front of us, or freeze. Sadly, it fits the evangelical profile to a T.


“In 2017, ThinkProgress reported that the Salvation Army’s substance abuse center in New York City had engaged in discriminatory behavior against transgender people. The center was one of four New York-based facilities that was found to engage in violations of city laws, including refusing to accept transgender people as patients, assigning rooms to transgender people based on their assigned sex at birth, and requiring transgender patients to undergo physical exams to determine whether they were on hormone therapy or had undergone surgery.”


Four facilities in one city with multiple violations. Let that sink in.


I also want to bring up one more organization before we close things out.


The National Christian Foundation


Who are they? NCF's primary operation, the Giving Fund (donor advised fund), works like a charitable savings account. Via an online dashboard, donors give various assets into the Fund, receive a tax deduction at the time of the gift, and recommend grants to their favorite charities.


I want to end things off by talking about “America's biggest Christian charity” and some of the ways they spend your money. If you've ever given to these people, I hope this gets you to close the checkbook on them once and for all.


Source: https://readsludge.com/2019/03/19/americas-biggest-christian-charity-funnels-tens-of-millions-to-hate-groups/


“The nation’s eighth-largest public charity is pouring tens of millions of dollars each year into a number of mostly anti-LGBT hate groups, a Sludge investigation shows.”


“By far the biggest recipient of NCF donations is Alliance Defending Freedom, a large network of Christian extremist lawyers who have supported criminalizing homosexuality, sterilizing transgender people, and claimed that gay men are pedophiles. The group recently came out against congressional Democrats’ Equality Act, which would ban discrimination against LGBTQ Americans.”


The Alliance Defending Freedom received $49.2 million from the NCF between 2015 and 2017.


The Family Research Council, an organization identified by SPLC as an Anti-LGBT hate group which has attempted to tie gay men to pedophilia for many years, also received donations from the NCF topping $5.3 million during the same time period.


Incidentally, they interviewed Chrissy Stroop for this article and she is someone I consider a friend of this show and someone whose efforts to expose evangelical fuckery, particularly in the area of LGBTQ discrimination, command both mention and respect.


The article also has a list of 24 – count 'em: TWENTY FOUR – recipients of funds from the NCF that are straight up named as hate groups by the SPLC.


TWENTY FOUR HATE GROUPS with ties to anti-gay and pro-life agendas... and this article is now almost 2 years old. Who have they – pardon the gratuitous pun – crawled in bed with since? You can look at the article to see some of the corporations and organizations that funnel charitable funds through the NCF that make their way in seven- and eight-figure terms into organizations like the ADF. It's actually rather scary and also begs the question: do these firms even research where all this money is going and how it's being used?


It's time to wind this down a bit so I want to end with just a little bit of advice. For starters, when you give to any charity, do your research. Figure out how much money is going to the cause you're supporting and how much makes its way into... let's just call them other avenues of disbursement because some of these groups are so huge they receive funds from other sources, sometimes secular ones so know where you're sending your money.


Also keep in mind that if you're coming out of evangelical faith and can't unwrap your brain from the concept of tithing yet, at least loosen the ecclesiastical reins enough to understand that ten percent is a lot of money and that generosity doesn't have a dollars and cents gauge. Give responsibly and protect your own credit, lifestyle, and more.


Next, keep in mind that reputable charities usually provide the donor with the ability to designate where their money goes. If you're giving to a charity because you support their work in a given area of service, designate your donation for support of that initiative and ONLY that initiative. It isn't fool-proof, but it does help ensure that your money does what you want it to much more than just putting a fiver in an offering plate ever would.


Lastly, please only give to secular charities who have to, by law, account for what they do with your money. The carte blanche approach that the IRS takes with christian charities and nonprofits is deplorable. Give your money to organizations that are held accountable. Oh, and like I said earlier, let your congresspeople know that you don't like the laws the way they are written and urge them to apply Form 990 standards to ALL charities and nonprofits, even those with religious affiliations. It is legal, it is constitutional, and it is about fucking time it happened.


Lastly, as an individual, if you're coming out of this thing and feeling a little buyer's remorse for all the good money you've thrown after bad to your church or a Christian charity, remember once again that that was then and this is now. You know more now. You're getting used to asking for information and learning things. You're getting better at demanding proof and being told the truth about things. The truth is, you've come a long way, baby.


And the less you worry about some of the awful things that may or may not have been done with your money in the past, the more excited you can be about the choices you make in the future. Choices that will help people and not harm them. Choices that have some accountability behind them on the part of the recipients of your hard-earned money. You have a future ahead that is just watching and waiting on the edge of its seat for you to become smarter, more pragmatic, and more skeptical of the things that deserve it, while also remaining empathetic enough to want to help make people's lives better and making good decisions about how you go about that. And that, new atheist, is a clear sign that you are actively about the business of getting and staying unbound.