(Photo: Sammy-Sander/Pixabay)
Trinity Foundation has identified more than 60 religious non-profit organizations with assets totaling almost $1.8 billion that have stopped filing Form 990 information returns with the IRS.
990s disclose program services expenses and other important financial information, helping informed donors evaluate the effectiveness of non-profit organizations.
Program services are determined by subtracting fundraising and management expenses from total expenses to derive the amount spent on the non-profit organization’s mission.
When Charity Navigator rates non-profit organizations, it deducts points for charities that spend less than 70 percent on their mission.
As an example, in 2023 Hal Lindsey Website Ministries program services expenses reached only 55.96 percent, and as a result they received 7 points out of 25 from Charity Navigator. That year Hal Lindsey’s wife Jo Lynn Lindsey received $1,238,924 in compensation which was almost a third of the ministry’s spending and more than half the ministry’s revenue. The ministry had $23 million in assets at the end of 2023, including more than $3 million in cash.
Following Hal Lindsey’s 2024 death, Trinity Foundation reported, “From 2013 to 2023, Hal and his wife JoLynne Lindsey received $18.5 million of compensation from Hal Lindsey Website Ministries. During those eleven years, the ministry spent only $1,105,360 in charitable assistance to groups and individuals.”
However, American churches and related organizations classified as integrated auxiliaries are not required by law to disclose program services expenses or billions of dollars of assets to their donors or to the IRS.
Therefore, if Hal Lindsey Website Ministries was a church and didn’t file 990s, donors would have no way of knowing about the massive accumulation of wealth from ministry donations.
The Association of Certified Fraud Examiners (ACFE) publishes an annual report filled with data about financial fraud. According to the ACFE’s 2024 Report to the Nations, “The presence of anti-fraud controls is associated with lower fraud losses and quicker fraud detection.”
The filing of complete, accurate 990s should be seen as an anti-fraud control.
When a ministry stops filing 990s, ministry executives could be rejecting transparency to hide misconduct in the form of excessive benefit transactions and excessive compensation.
Another critical piece of information disclosed in the 990s is housing allowances.
Sean Feucht Ministries has acquired three parsonages in California, Montana and Washington, D.C. Meanwhile, Sean Feucht has acquired ten personal properties. Does Feucht receive housing allowances in addition to parsonages?
In 2005, IRS Commissioner Mark Everson sent a 14-page letter to Senator Chuck Grassley and the Senate Finance Committee which reported the IRS has “little ability to monitor [churches] against diversion of assets” because they are not required to file the Form 990 informational return.
In 2011, a Senate Finance Committee memo reported, “For example, we found at least 21 ‘assumed names’ registered with the State of Texas for Eagle Mountain International Church (also known as Kenneth Copeland Ministries). These included record companies and recording studios. This raises the question of whether church status is being gamed to shield such activities of a tax-exempt entity from public scrutiny.”
Protecting Sensitive Information from the IRS and Foreign Governments
Foreign missions agencies and organizations aiding persecuted Christians often avoid filing 990s because they include sensitive information. While the non-profit Voice of the Martyrs doesn’t submit 990s to the IRS, they provide them to donors upon request.
IRS abuses have also motivated religious non-profits to stop sharing information. Focus on the Family stopped submitting completed 990s to the IRS in order to protect donors.
(Screenshot: When a donor gives $5,000 or more to a non-profit organization, the donation is reported on Schedule B of a 990. The donor’s name, address and donation amount are redacted by the IRS before the 990 is published online.)
An IRS employee leaked the names of donors to the National Organization for Marriage, a non-profit organization opposed to gay marriage, to gay rights groups. The name of the leaker was not disclosed.
The Evangelical Council for Financial Accountability has also stopped submitting 990s to the IRS but posts them on their website.
Reclassification as Churches
Some of the non-profit ministries that no longer file 990s previously requested the IRS reclassify them as churches.
After a non-profit organization requests a reclassification, the IRS sends a determination letter which often states if a non-profit is required to file a 990.
(Screenshot: Todd White’s non-profit organization was reclassified as a church in 2020 and is no longer required to file 990s.)
The IRS reclassification process raises questions. Has the IRS discarded its 14-Point Church Test? The IRS is reclassifying organizations as churches that lack places of worship and have no distinct membership.
Group Exemptions are also problematic as determination letters do not always explicitly say if organizations must file 990s.
In 2014, the IRS granted a Group Exemption to the Billy Graham Evangelistic Association and the ministry stopped filing 990s even though the determination letter doesn’t say the ministry is exempt from filing.
Becoming More Transparent
When a non-profit organization’s legal structure or status changes, it may be required to request reclassification. After affiliating with a church, Student Leadership University was granted an exemption from filing 990s in 2020. After the church affiliation ended, the non-profit contacted the IRS which posted a new determination letter in 2024 requiring the organization to file 990s.
Trinity Foundation would like to encourage other religious non-profits to become more financially transparent. Stop requesting exemptions from filing 990s and instead give your supporters the financial information they need to practice donor responsibility.
* MinistryWatch is another excellent resource for researching ministry financial transparency. MinistryWatch assigns a rating to organizations and has compiled a list of almost 200 non-profits not filing Form 990s.