two quick unrelated news items

Here are a couple of articles that are part of ongoing trends, and while they’re not especially exciting in and of themselves they’re worth checking out because of the big narrative they’re part of.

1. Secret Service, IRS investigating Eddie Long’s church [link]. For political speech? No, for scamming people out of their retirement money. I guess it goes without saying: if your church starts holding wealth-building seminars it’s time to find another church. Just saying.
2. A megachurch in Alabama has taken over another failing small local church and made it a campus church [link]. Kudos to reporter Greg Garrison for not mentioning the recession.

Regarding the second story: there probably are churches that are failing due to the recession, but by and large I would be tempted to ascribe the consolidation in the church business as part of a demographic shift rather than blaming tough economic times. I think it’s due to smaller congregations getting older and aging out of their prime giving years. I’d be tempted to say that if the recession were hitting churches hard then we’d be seeing the megachurch collapse everybody swears is coming.

 

The Grassley staff report and “love offerings”

When I first heard that the Grassley investigation was looking into “love offerings” I thought I had misunderstood something. When I was a kid and attending independent Baptist churches we occasionally took up “special offerings” for visiting speakers, missionaries, causes, etc. and these were sometimes called “free-will offerings,” or, in rare circumstances “love offerings.” It was usually made clear to us that this money was leaving the church in the hand of the speaker or being sent to the cause or organization of interest and was separate from our “tithe” which stayed in our local church. Because I was a kid at the time I never thought about the tax implications of these gifts. They were mostly loose cash anyway and wouldn’t have been mentioned on anybody’s Form 1040 Schedule A anyway.

So I was surprised to hear a suggestion that something like this would have merited the attention of a Senator. Needless to say I had it all wrong. The “love offerings” in question are of an entirely different sort; they’re bigger, more organized, and definitely have tax implications for somebody.

Here is the reference to the relevant law from the Grassley staff report [PDF]:

Under section 102(a) [of the tax code], gross income does not include the value of property acquired by gift, bequest, devise, or inheritance. Section 102(c) provides an exception for “employee gifts”: there is no exclusion from gross income for any amount transferred by or for an employer to, or for the benefit of, an employee.

The discussion goes on to list examples of how this section is being interpreted by various ministries:

• Randy and Paula White were taking “love offerings” in addition to a base salary
• Eddie Long was taking “love offerings” instead of a salary
• Gregory Clarke was convicted of tax fraud in 2007; he admitted to taking a $60,000 “love offering” and other gifts instead of a salary

There is also an unquantified note from Larry McSwain, professor at Mercer [link]:

one of the practices of many churches, especially non-denominational and African-American ones, is to provide a love offering from the members to their pastor in place of salary. This technique is, for some, a way of avoiding the reporting of income. (page 45)

There’s also several pages of language parsing what constitutes a “gift,” the difference between an “offering” and a “gift,” and pointing out that language in Section 102 regarding gifts to employees may not apply to ministers, who are considered self-employed in some contexts, employed by a church in others.

Of the issues considered by the investigation this is the thinnest, in the sense that there’s just not much data. It does appear that in some churches and under some circumstances “envelopes stuffed with cash” pass from hand to hand, and the “love offering” language is just a smoke screen to sanctify a practice that may have been appropriate at one time but now is just a tax dodge. It’s hard to quantify, though, when churches aren’t required to file any forms (e.g. the IRS Form 990) detailing how much money they handle and what they do with it.

This is a tough issue; see e.g. some of the clear distinctions and some of the gray areas in McSwain’s 2007 article from Ethics Daily [link]:

It is altogether fair for Sen. Grassley to determine whether such monies were indeed gifts or were checks from churches given by members who were eligible for a charitable deduction on their taxes. If they were, it was not a gift!

There’s a point at which small “special offerings” become salary-sized tax dodges; I’m not sure I know where. I have to admit that I think this is a shady practice at best, but I get the impression from the Grassley staff report that it is not likely to change any time soon under current law. From what I understand this particular issue is not front and center among the issues of interest to the Evangelical Council for Financial Accountability (ECFA); issues such as self-dealing and integrated auxiliaries (of which more later) being better-defined and more important. I guess we will see if and when the ECFA-related independent commission reports [link].

The Grassley Investigation: an overview

I’ve cached a copy of the staff memo to Senator Grassley (R-IA), written by Theresa Pattara and Sean Barnett, locally [PDF] and I would encourage all interested parties to have a look at it. Here’s my quick overview:

The inquiry dealt directly with some narrow questions pertaining to tax law and “media-based ministries,” namely

1. Benny Hinn Ministries
2. Joyce Meyer Ministries
3. Creflo and Taffi Dollar/World Changers Church International
4. Randy and Paula White/Without Walls International Church
5. Kenneth Copeland Ministries
6. Eddie Long/New Birth Missionary Baptist Church

And questions regarding their tax status and the appropriateness of tax-free compensation, including but not limited to

• Housing allowances; these are under current law explicitly tax-exempt compensation for pastors, and have been subject to interpretations that seem very much at variance with the original intent of the governing law
• “Love offerings;” this is a term that is used differently by different people, but in the Grassley staff report always refers to an untaxed transfer of money to ministers. It is also apparently treated as a tax loophole under some circumstances.
• Companies owned by ministries that would be taxable if they were not church-owned

There are also some broader issues, including but not limited to

• Whether churches should file the IRS Form 990
• How donors can make well-informed giving decisions
• Conflict of interest in churches
• The legal definition of a church for tax purposes

It’s important to keep these distinctions clear; the staff report goes back and forth between broad issues and narrow issues, but it becomes clear that no sweeping changes were seriously being considered, so only the narrow issues are really of interest.

Two of the six ministries responded to Senator Grassley’s inquiries: Benny Hinn Ministries and Joyce Meyer Ministries. The histories of two of the other ministries (Eddie Long and the Whites) have become complicated due to unrelated scandals and business issues. Also, the relationship between Benny Hinn and Paula White merits mention and not much else [link].

The inquiry ended with more a whimper than with a bang. Senator Grassley asked the Evangelical Council for Financial Accountability (ECFA) to form an independent commission to make recommendations to him. He made it clear that he wants the community to correct various practices itself under threat of legislation [link]. The reaction to this request etc. has mostly been greeted with disdain [link, link, link] and only occasionally seen as a shot across the bow, wake-up call, whatever [link]. Of these only the Nonprofit Quarterly article notes the important political reality that Grassley is not currently as powerful a Senator as he was in say 2006 and so may be biding his time.

Meyer joined the ECFA and got a top rating from them [link], making her the big winner in this story (about which more later). It isn’t clear to me at present what Hinn did apart from cooperating with the inquiry.

For the record and up front let me say that I think churches currently benefit from advantages they had at say mid-century that they will not have fifty years from now, among them the housing allowance, that if they were new law today would not pass Constitutional tests they would face in the current political climate. I really do think because there’s so much money in the hands of so many large ministries, and because of the questionable things they’ve done with that money, they will eventually forfeit at least some of the current tax-exempt status churches have today. And finally: I think churches should have to file the IRS Form 990, primarily because of the disclosure it requires about executive compensation, conflict of interest, and politicking.  But more on all those things later.

“It’s hard to find God in a megachurch” and other stories

Intelligence Squared sponsored a dial-in debate between journalist Mollie Ziegler Hemingway and “megachurch and leadership expert” Dave Travis [blog] on the premise “It’s hard to find God in a megachurch” [link, free registration required]. The introduction for the debate doesn’t look promising; apart from some soundbites (Robert Schuller, Eddie Long, George W. Bush, Ted Haggard) there’s this definition:

The evangelical movement has a globally influential role, and the megachurches are an important element of it. They have huge congregations with inspirational, charismatic pastors. They are run like businesses and, it might seem, often with rather business-like objectives of raising funds and satisfying customers.

Hemingway gets off on the wrong foot from the start:

Most notably, the size and charisma aspects affect the relationship of the pastor to his congregation. These features require for lowest common denominator preaching; it becomes based on ‘You’, rather than Christ.. Equally, sacramental worship is not feasible with a congregation of 2,000 people. In small congregation churches, members are active. In megachurches, the audience is passive, consuming rather than engaging with gospel entertainment.

Yes, there are problems when the relationship between the preacher and church is out of whack, but she trots out the “big/passive, small/active” red herring: neither of these is necessarily true. And while her point about “gospel entertainment,” whatever that is, is probably apt, she’s made the mistake of making the conservative Lutheran method of worship standard so everything else is deviant.

The problem of America’s churches is that they’re market driven, but megachurches are market driven on steroids.

I have no idea what “market driven on steroids” means; this sounds like a fancy way of saying “very market driven” or “very very market driven.” And of course it begs the question “market driven as opposed to what?”

Hemingway is offering the usual talking points here, as if the alternatives in the megachurch debate were the LCMS standard on one side and Joel Osteen on the other. Briefly: not everyone outside a megachurch is looking to “receive sacraments for the forgiveness of sins” and not everyone in a megachurch is looking for “your best life now.” I’m disappointed in her presentation and don’t think it was effective, especially once she conceded that church size isn’t the problem.

Dave Travis on the other hand offers a fairly standard set of church growth arguments: “we took a survey, here are some results, lo and behold they support our model of church.”

Here’s part of his opening argument:

People are moving from small to big institutions in every sector of America’s society. In the church, this is not necessarily an obstacle to a healthy relationship with Christ; it just creates a different one. Yes, in megachurches, preaching is simpler in approach than smaller churches, but accessibility to doctrine does not make it un-challenging. In fact, megachurches preach what is relevant to the congregation.

I’m not sure how the first two sentences are related to one another; if there’s a causal connection between other institutions getting bigger and churches getting bigger I don’t see it. He concedes that megachurch preaching is simple and includes mention of the relevance of the text to the believer, but doesn’t point out any differences between sermons that are relevant to the believer and sermons that are consumer-centered. It’s a weak presentation, but Travis is mostly stuck responding to the moderators’ opening comments and Hemingway’s opening comments.

Travis doesn’t handle a question about pastoral accountability well; he answers a poorly-presented question about congregants in a small church engaging in question and answers with the pastor by saying megachurch pastors take feedback via websites and response cards. He also interacts poorly with a question about authoritarian preachers.

Hemingway responds to the same question by presenting the same lousy argument “churches should be defined by creeds and sacraments, not market research” and equivocates between creeds and sacraments on the one hand and Scripture on the other. I don’t know what if anything Hemingway can say about churches that are neither focused on creeds and sacraments nor driven by market research.

I think Travis misses an obvious knock-out punch that goes like this: The Hartford Institute, which provides definitions and lists for American megachurches, lists 1408 churches that meet its criteria. Of these seven are part of the Lutheran Church Missouri Synod [link]; does Hemingway’s analysis apply to these? If so then all her bluster about creeds and sacraments is nonsense; if not then her distinction she’s making above is invalid.

I hate to say it, but I don’t see a winner here; neither party actually interacts with the premise. Hemingway’s argument is just special pleading, and she grows increasingly shrill as the discussion progresses. Travis comes closer to interacting with the premise by relating survey results about church attenders’ impressions of their relationship with God, but never suggests that there’s any way to close the gap between those results and an actual God. Hemingway can’t seem to see past her tradition. It’s a mess.

On the whole I’m left wondering if there is any common ground between the two sides, and whether this is an issue a debate can resolve. I would recommend listening to this debate anyway; 25 minutes isn’t very long to sort out issues like this, but it’s helpful to hear where the discussion is now (nowhere, mostly). As I said several months ago, this still sounds like a dialog between a dead church and a dying church to me.

In other news, Dee at The Wartburg Watch offered a take on Cruise With A Cause 2011 a couple of weeks ago [link]; her comments cover some of the same ground I covered [link], from a different angle and somewhat more pointedly. She also points out that the online biography for Ergun Caner appears to mix in elements of his brother Emir’s biography.

And finally: I found myself awake between 1:30AM and 2:30AM and ended up taking a peek at the KAZQ [link] overnight offerings. They offer GOD TV [link] as a second OTA digital signal (Digital channel 32.2) and on their primary signal in the wee hours. I got to sample the late Barry Smith’s program Mystery Babylon [link, link]; it caught my interest when I saw the word “Weishaupt” on the whiteboard behind Smith and heard his Kiwi accent. His presentation was a fairly typical fast-and-loose “Freemasons are apostate; Freemasons run the English-speaking world” presentation. Highlights included

• Smith’s claim that floor tiles in contrasting colors, especially in black and white, in public buildings, are a secret Freemason symbol
• Smith’s claim that certain hand gestures require Masonic judges to free Masonic criminals
• A dissection of the symbols on the back of a one-dollar bill that sounded even stranger with a Kiwi accent

GOD TV currently offers two or three episodes of Barry Smith programming a night and another in the afternoon; Joe Bob says check it out.