Pastors Speak Their Mind (and Flout the Rules)

Jesus, God, and all thatIt’s another dreaded election year, and the leaders of many religious organizations somehow feel put upon by the IRS because they can’t preach about politics.

But why?  No one forced tax-exempt donations on them—in fact, they took them willingly—so it’s surprising that they’re now chafing at the regulations that come along for the ride.  The solution is easy: if nonprofit status is a deal with the devil, then don’t accept nonprofit status.

The Internal Revenue Service makes clear that churches and pastors may organize non-partisan voter education activities, voter registration, and get-out-the-vote drives (with an emphasis on non-partisan).  Religious leaders speaking for themselves can say whatever they want, and they can speak “about important issues of public policy.”

However, all nonprofit organizations, including religious organizations

are absolutely prohibited from directly or indirectly participating in, or intervening in, any political campaign on behalf of (or in opposition to) any candidate for elective public office. Contributions to political campaign funds or public statements of position (verbal or written) made by or on behalf of the organization in favor of or in opposition to any candidate for public office clearly violate the prohibition against political campaign activity. … Religious leaders cannot make partisan comments in official organization publications or at official church functions. …

[Nonprofits] must avoid any issue advocacy that functions as political campaign intervention.  Even if a statement does not expressly tell an audience to vote for or against a specific candidate, an organization delivering the statement is at risk of violating the political campaign intervention prohibition if there is any message favoring or opposing a candidate.

But many pastors can’t accept this.  I don’t know if they honestly think that it’s unfair or if they figure that they’ve already tipped the playing field so much in their favor that they’ll try their luck for even more, but the Alliance Defense Fund has organized the annual Pulpit Freedom Sunday (October 7 this year).  On this day:

The pastors will exercise their First Amendment right to preach on the subject [of the moral qualifications of candidates seeking public office], despite federal tax regulations that prohibit intervening or participating in a political campaign. …

The point of the Pulpit Initiative is very simple: the IRS should not be the one making the decision by threatening to revoke a church’s tax-exempt status.  We need to get the government out of the pulpit.

Wow—strange thinking.  Tax-exempt status is granted by the government.  It’s a contract, not a right, and it comes with strings attached.  If we the public will be subsidizing an organization, we are entitled to limit its actions.  No one’s strong-arming the church, and they can drop both the nonprofit status and the strings attached any time they want.

To some extent, it’s a zero-sum game.  (For example, when Mormon desires for polygamy clashed with the needs of the state, someone had to lose.)  The head of the IRS addressed this conflict of tax-exempt status and freedom of speech:

Freedom of speech and religious liberty are essential elements of our democracy.  But the Supreme Court has in essence held that tax exemption is a privilege, not a right, stating, “Congress has not violated [an organization’s] First Amendment rights by declining to subsidize its First Amendment activities.”

If the IRS constraints against speaking out on political issues are a problem, then don’t enter into a contract with the IRS.  Drop your nonprofit status, tell church members that they can no longer deduct donations, and then you can give your opinion about any candidate or issue.

But to keep your nonprofit status, you must follow the rules.

See the first post in this series: What do Churches Have to Hide?

Photo credit: Wikimedia

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Church Accountability

Does God exist?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.”

The investigated organizations (I’ll use the names of the public faces) were:

  • 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, MinistryWatch gave him a transparency grade of F.  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: F.
  • Creflo Dollar: incomplete information.  MinistryWatch grade: F.
  • 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.

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.

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

Photo credit: Wikimedia

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What do Churches Have to Hide?

IRS filings don't help show that God existsThe Freedom From Religion Foundation is a freethought organization that has won some high-profile lawsuits that support 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 2010, it was $2,234,307.  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 and other religious organizations.

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 (who 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.

Let’s remember what religion we’re talking about.  It’s the religion that tells the story of the rich man who was (tragically) 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 and ministries being secretive today about how they spend the money given to them?  About churches exempting themselves from the requirement to open their books?

There are some groups trying to fix this problem.  MinistryWatch asks for financial information from ministries and publicizes the results.  For example, Greg Koukl’s Stand to Reason gets an A rating, and they deserve praise for doing the right thing.  But this is just a baby step.  First, MinistryWatch has only 600 ministries in their list when there are an estimated 335,000 congregations in the U.S.  Second, the financial information is still not as thorough as that provided on Form 990s by nonreligious nonprofits.

And third, many of the ministries don’t get an A rating.  In fact, those who get an F (typically because they ignored MinistryWatch’s request for information) are a Who’s Who of high-profile televangelists and religious newsmakers: Benny Hinn, Creflo Dollar, John Hagee, Kenneth Copeland, TD Jakes, Trinity Broadcasting Network, Rod Parsley, Robert Schuller’s Crystal Cathedral, Harold Camping’s Family Radio, and more.  They all got an F.  Doesn’t this evasion reflect badly on all religious organizations?

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.

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?

Photo credit: IRS

Other posts in this series:

Related links:

  • “Christian views on poverty and wealth,” Wikipedia.
  • “4th annual ‘State of the Plate’ Survey,” State of the Plate, 3/27/12.