Note: This is the first article in a series examining financial records and receipts for pastors and religious organizations. Future articles will explore travel expenses and per diem expenses.
“It has been said, ‘Show me a person’s checkbook and I can tell you what he cares about.'” – Social Action, 1964
James MacDonald, the controversial former pastor of Harvest Bible Chapel (HBC), is attempting to restore his reputation. In July, MacDonald posted on his website copies of checks as proof that he reimbursed (HBC) for personal expenses incurred during his time as pastor. One reimbursement check, dated December 28, 2018, was for $27,172.39!
The checks challenged a claim that MacDonald failed to reimburse the church.
MacDonald also provided monthly lists of church financial transactions revealing the cost of airline tickets, charter aircraft service and gifts to pastors.
Concerned church donors and religion reporters rarely have access to this kind of financial information.
Monthly statements disclosed that HBC and MacDonald’s media ministry Walk in the Word shared the cost of purchasing more than $1,000 of cufflinks for church employees. Other transactions included the purchase of more than $1,500 in gifts from Bloomingdales for a Greg Laurie marriage conference and $10,683.09 spent on taxidermy in the first half of 2016.
HBC sponsored a deer hunt as a fundraiser for a scholarship program. If taxidermy were included in the price for hunting, the donor would be required to deduct the taxidermy cost when reporting the donation on his tax return.
HBC paid $500 for another pastor’s stay at the Ritz Carlton which MacDonald described as a “blessing.”
When a church or ministry gives gifts to donors, employees and pastors of other churches, IRS rules come into play. Because the gift tax annual exclusion was $14,000 for the years 2013-2017 and $15,000 for 2018-2021, HBC was not required to report these gifts to the IRS.
During his time as pastor, MacDonald gave motorcycles and a car to pastors, which would have been subject to the gift tax if their cost exceeded $15,000.
In 2019, Dee Parsons of The Wartburg Watch reported, “I’ve been informed by some reliable folks that James MacDonald gave Ed Stetzer a vintage Volkswagen Beetle convertible. I’ve even been given the vanity license plate but won’t post that. I was informed that the car was paid for by HBC funds. Given the recent reports out of HBC, I felt that this was worth investigating.”
Christopher Nudo, HBC’s attorney, told Julie Roys of The Roys Report the Beetle cost $13,000 and was bought by Walk in the Word. Stetzer later reimbursed the ministry for the cost of the car.
The Roys Report also noted, “MacDonald had used church funds to give six to eight Harley Davidson motorcycles to people inside and outside of the church.”
The Bigger Picture
MacDonald is not alone in practicing questionable gift giving. According to a confidential informant, the late Jan Crouch of Trinity Broadcasting Network showered her boyfriends with expensive gifts while she was married to Paul Crouch Sr.
Paula White gave fellow televangelist T. D. Jakes a Bentley for his 50th birthday. Furthermore, Paula’s church City of Destiny collects birthday gifts each year for her.
It is common for churches, especially proponents of the prosperity gospel, to collect love offerings for pastors and to give speaking honorariums to conference speakers that are not reported as taxable income.
In 2005, the Atlanta Journal-Constitution reported, “A church spokesman said [Pastor Eddie] Long no longer takes a salary, but instead accepts ‘love offerings’ made by church members.”
In 2006, televangelist Kenneth Copeland celebrated his 70th birthday and 40th anniversary of being in ministry. To honor the occasion, Copeland’s church with assistance from Creflo Dollar, collected money from pastors attending Copeland’s birthday/anniversary party.
According to an informant present at the party, “Creflo’s goal was
to raise 2 million dollars to present to the Copelands at the party. This
money was for the Copeland’s personally. Creflo did not receive the 2
million from the invitees so he put in about 1 million of his own money (or
money from his ministry) to meet his goal. I believe the amount ended up
being 2.1 million.” The informant’s testimony and the church response were included in a 2011 Senate Finance Committee report.
The church disputed the $2.1 million amount when questioned by Senator Grassley: “The Copelands received personal gifts or payments of less than $2 million. In any case where it was unclear whether the gift was to the Copelands or the Church, the gift was treated as a donation to the Church.”
Numerous televangelist and church jets flew various attendees to the party, but it is unclear as to who paid for these costly flights—the individual guests or their church ministries.
Adopting Higher Ethical Standards
To prevent improper political influence via gifts, state legislatures have passed laws limiting gift amounts for government employees along with reporting requirements.
State Ethics Commissions provide oversight. Government employees are required to watch training videos or receive other instruction on state ethics laws. Ethics officers advise employees on how to respond to unsolicited gifts that may be prohibited.
In Texas, the state with the most televangelists, government employees are restricted to accepting “non-cash items of less than $50 in value.”
Honorariums are banned in some states. The Texas Ethics Commission advises state employees, “You may not solicit, agree to accept, or accept an honorarium in consideration for services you would not have been asked to provide but for your official position.”
The Evangelical Press Association’s Code of Ethics is worth emulating: “Journalists should decline gifts that may unduly influence the performance of their work. Token courtesies, such as meals or media passes, should be accepted only in the normal course of editorial production.”
Perhaps church denominations and ministries should adopt similar limits for non-charitable gifts and require an ethics class for pastors and church bookkeepers.