How Important is Financial Transparency in Churches?

Posted on April 05, 2007
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(21) comments

Keith Herron writes:

When The Kansas City Star published an investigative story a few weeks ago about the secretive financial oversight of one of the Baptist mega-churches in the area, it was as if a bomb went off in the community.

The news story reported that several hundred members had left the First Family Church of Overland Park, Kan., in the last few years because of the church’s refusal to provide members with financial reports of the church income and expenses and the enforced secrecy surrounding the salaries and benefits of the pastor and those family members who are paid staff members.

Accountability issues also involved the broken promises of how funds raised to fund one capital campaign were apparently used to pay for another campaign, while other funds raised for particular projects were either mysteriously delayed or never spent for their stated purpose. Additionally, false explanations were given to the church about how a land deal was consummated according to court records. The members have left over their inability to get answers to their questions about these matters.

Pastor Jerry Johnston exercises tight control over financial disclosure policies by hiding behind the claim that all church financial records are accountable to a board of trustees. According to the story, a lawyer listed in church corporation papers as a board member acknowledged he hadn’t been to a board meeting in years, didn’t know he was a board member and hadn’t attended the church in years.

Former members of a building committee for a recent project left the church out of frustration in obtaining financial reports in order to apply for loan approval to fund the project. They were repeatedly denied the reports and in the end, Johnston covered the loan himself. It is unknown whether he utilized the financial resources of others or underwrote the loan himself. The details are unknown to the members of the church. Within weeks, the entire building committee resigned. It should be noted that Johnston disagreed with the facts of the new story on this point. “Respectfully, I disagree,” he said about these accusations.

Members are not given access for the salaries or benefits given to the pastor and staff. Complaints criticize the exorbitant life styles of the pastor and his family listing expensive cars, homes, clothing and the use of an exclusive and high-priced American Express card. Johnston has recently hired a public relations specialist from Dallas to handle all responses to the news stories.

The pastor responded defensively with the warning a few weeks before the story broke that the congregation should expect adversaries to attack them and their ministry. “Whenever God’s work is being built, Satan sends opponents, and he energizes opponents,” Johnston said. “Beware of Satan as he speaks through different people.”

Johnston was apparently referring to the upcoming news story implying that the reporter, a member of another large church in the area, had an ulterior motive to hurt the credibility of the church and its pastor in order to benefit her own church.

The news story also highlighted the duplicity of claims the pastor has a doctoral degree. Johnston uses “Dr. Jerry Johnston” publicly and in all church publications and media, but in fact he does not have such a degree other than the honorary doctorate received when invited by Jerry Falwell to preach the baccalaureate service at Liberty University in 1998.

Johnston was a high school dropout from the Christian high school he attended in Kansas City in the 1970s. He later passed the general equivalency degree but has not earned college or graduate degrees beyond that. He claims he will graduate this spring with a bachelor’s degree in biblical studies from the Midwestern Baptist College (SBC), the undergraduate program of Midwestern Baptist Theological Seminary in Kansas City.

While the letters to the editor in The Kansas City Star have been numerous and polarized, it’s clear the issue of trust and integrity are central to the story. Many have defended Johnston and the First Family Church as being the victim of a scathing news story that was unfair in light of all the good the church has done in the community while others have voiced their opposition to the strange need for absolute control of such matters.

The news report on First Family’s secretive control of their finances has created a community-wide conversation on the issues of trust, disclosure and integrity. In a follow-up article on this issue, a number of local pastors and congregations were asked about their practices regarding financial accountability.

Comments

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Jim in NJ on Thu, April 05, 2007

I am treasurer at a church in southern New Jersey with attendence of about 500 and total giving of about $1,000,000/year. Our policy in general and my policy in particular is confidentiality in giving and transparency in spending. We issue a complete report of all budgeted funds, both giving and spending each year and I have given YTD reports to any member or regular attender who asks. About 40% of our total giving goes to designated restricted areas such as our Summer Ministries program that reaches out to youth and adults in our community and specific and general mission giving both within and outside our denomination. Our budget is detailed as far as salaries and benfits of all employees. As far as who gives, we do our best to keep that confidential. We have three rotating teams of counters who record the giving on computer, but only our bookkeeper has access to the complete giving records. She prints out and mails the annual statements so no one (especially including the pastors or myself knows who gives what. We don’t encourage public recognition of those who give to specific projects. I was dumbfounded at the end of last year by an anonymous donation of $100,000 to be used where needed. The only person to know the identity of the donor was the pastor who received the check and made the deposit into our bank account. The Board decided to take 10% and put it aside for mission projects during the year. The balance was put aside toward future expansion of our facilities. At least that is how we do it.
I_am_not on Thu, April 05, 2007

How ‘transparent’ is your church with its finances? Very transparent. I believe it’s central to good stewardship.

How detailed of reports do you give? We distribute a standard Income Statement and Balance Sheet every month to members that attend church business meetings. We also open the floor in the meetings for any questions about church finances.

Do you disclose staff salaries and benefits? Only during the annual budget process. We do not provide this level of detail on the monthly financial reports, only because we value simplicity of a single “Salaries” account. If members can’t remember what was presented at the annual budget, then they can ask, and we will provide them the info as quickly as we can.

What steps do you take to establish financial trust? Do you feel it’s as important as Dan Busby says in the beginning quote? We take the steps mentioned earlier and YES, it is as important as Dan Busby says.
Jan on Thu, April 05, 2007

Not much to add but agreement to the first two posts.

But I wanted to add that it’s important to not just be about money. Transparency with finances is very important, especially with the mistrust our society has with anything church.

And it’s also important to realize that God is the giver of all good things. I don’t need to know what you give. I don’t want to know. It’s between you and God and your relationship with Him.

Yeah, maturity says you tithe, but I am not dependent on any individual for provision. God will provide if this is His calling for us in ministry.

Every Sunday we say “God does not need your money. If you attend another church, God wants you to support that ministry. And if you don’t know Jesus as your personal Savior, you don’t have a personal relatonships with Him, then He doesn’t ask you to put anything in the offering plate. He only wants your heart.”
Lisa on Sat, June 21, 2008

I agree with the first two posters as well but in comment to Jan, I listen to a man called Zac Poonen from India and above their tithing box he put Matthew 5.24, “first be reconciled to your brother, and then come and offer your gift.” I thought more churches should do that!!
Mike from Consumer Credit Advocacy Group on Mon, June 30, 2008

What really gets me about transparency in churches is the faux churches that claim they’re a church for tax reasons. I won’t name any names but we all know of that one that is people like Tom Cruise are associated with.
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“Historically, we’ve only disclosed what we’ve had to. We tend to hold information close to the vest that we probably should share,” said Dan Busby, acting president of the Evangelical Council for Financial Accountability, a voluntary group that sets financial standards for its nearly 1,400 churches and nonprofit members.Those groups and other charitable institutions have not been the direct targets of increased scrutiny by the government and public in the wake of the banking industry crisis and scandals involving financiers like Madoff — who’s accused of costing investors, including some charities, about $50 billion in a Ponzi scheme…more in..

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dll on Mon, March 23, 2009

I listen to a man called Zac Poonen from India and above their tithing box he put Matthew 5.24, “first be reconciled to your brother, and then come and offer your gift.” I thought more churches should do that.
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