IN GOD'S HANDS OR THE PASTORS'?
Published: Jul 1, 2007
Worshippers at Without Walls International Church are accustomed to seeing the offering collected two or three times each service.
At services in May and June, worshippers stuffed the offering buckets with cash, jewelry, and hundreds of colorful envelopes filled with checks and credit card numbers. The envelopes identify seven donation designations: tithes, offering, building fund, Without Walls television, benevolence, pastor's gift and Paula White Ministries.
With all the money pouring into the $40 million-a-year enterprise, how do those who give know where it all goes? How can congregants be sure their money supports the causes they intended?
The answer: They can't.
Unlike all other U.S. nonprofit organizations, churches are not required to report income or any other financial information to the public or the Internal Revenue Service. Larger denominations usually have independent boards to review finances, but independent megachurches sometimes keep detailed financial information a closely guarded secret.
Bill Martin, a Rice University expert on evangelicals, said megachurches often are run by charismatic founders who blend their gift for preaching with a keen entrepreneurial spirit. Sometimes the hunger for money seizes control of the ministry, he said.
"A lot of these folks don't want any accountability," he said. "And when that happens, trouble is on the way."
It has resulted in scandals that have destroyed some of the most revered ministries, including the now-defunct PTL (Praise The Lord) evangelical Christian television network.
Richard Dortch, the former president of PTL who lives in Clearwater, offers a cautionary tale for those tied to personality-driven ministries with little financial accountability.
He was indicted in 1988 on federal charges of fraud and conspiracy to divert millions in charitable donations for personal benefit. He later pleaded guilty to reduced charges and served 16 months in prison.
"Television changes some people," said Dortch, 75. "The same thing with being in the pulpit. You start believing you're as important as people tell you that you are. You stop praying the way you should, and you don't humble yourself. Haughty spirit and pride take over."
In its heyday, about $150 million a year poured into PTL. Dortch's annual salary reached $530,377, according to his book, "Forgiven: The Rise and Fall of Jim Bakker and the PTL Ministry."
Dortch, who was defrocked - then reinstated - by his Assemblies of God denomination, said the danger begins when leaders don't have accountability.
"We're loose cannons without it," he said.
He now leads Life Challenge, a Clearwater-based nonprofit ministry that assists professionals in crisis. He said the ministry takes in less than $50,000 a year.
'Opportunity For Fraud Is Huge'
The constitutionally mandated separation of church and state exempts churches from having to report their financial information.
During the few times Congress considered requiring more accountability, churches successfully argued that reporting financial information is the first step toward government regulation and eventual takeover.
When a church does release financial information, the congregation must take church leaders at their word. There is no punishment if the information is inaccurate or incomplete.
The IRS has the authority to audit church finances, but a spokeswoman would not say how many religious organizations are audited each year.
Kenneth Behr, president of the Evangelical Council for Financial Accountability, a watchdog group, said he thinks that of the hundreds of thousands of churches in the nation, the IRS audits only about a dozen each year.
"The opportunity for fraud is huge," said Marci Hamilton, a lawyer who specializes in religious institutions. "For someone who is inclined to misuse funds, the church setting is ideal."
Nearly all large denominations have had financial troubles. For example, 85 percent of U.S. Catholic dioceses have detected embezzlement in the past five years, according to Villanova University researchers.
But questions of accountability are often most intense at independent megachurches, thought to be the fastest-growing segment of Christianity, several religion experts say.
A ministry must draw at least 2,000 worshippers a week to be considered a megachurch. Today, at least 6,000 churches claim to have more than 1,000 worshippers a week; in 1963, only 93 reached that threshold.
Two of the nation's largest churches, both of which report 30,000 members, are Joel Osteen's Lakewood Church in Houston and Rick Warren's Saddleback Church in Lake Forest, Calif.
Without Walls says it has 23,000 members.
John Vaughan, founder of the research company Church Growth Today in Bolivar, Mo., said a megachurch is started every two days.
Typically, an evangelical is a Protestant who puts more emphasis on faith than sacrament and good works. The independent churches are popular because evangelicalism's theological flexibility allows them to embrace contemporary culture. The churches are not tethered to the bureaucratic hierarchy of a controlling authority such as the Vatican, and they are independent financially.
Often at today's megachurches, decisions about whether the offering goes to help the homeless or faraway orphanages or to refuel the pastor's private jet fall solely to the church board. At some independent churches such as Without Walls, the board is made up of the pastors, their family members, church staff and friends.
The lack of openness troubled some former Without Walls members who worried that their pastors' rock-star lifestyles came at the expense of helping the needy. Stoking the controversy, many of the ministries - including Without Walls - preach prosperity gospel, a teaching that God wants believers to be rich and that digging deep into their wallets for the church will result in wealth.
John Accomando recently joined Idlewild Baptist Church after leaving Without Walls. The 39-year-old physician likes Idlewild's financial openness. Congregants must approve the budget every year.
"We can make the designation in our offering exactly where we want our money to go," he said. "And we're given a detailed account of how much was raised and how it was spent. The Bible tells us to be good stewards with our money, and the church honors that."
Cindy Fleenor started attending Without Walls several years ago after becoming a supporter of its television outreach, Paula White Ministries. She stopped giving to the church and the ministry because the message seemed to be more "give, give, give and you'll receive" than about developing a relationship with the Lord, she said.
The 53-year-old accountant with Hillsborough County's water resources services worries that Randy and Paula White have distorted Scripture to justify their lavish lifestyles.
"I think the money is being consumed more for the ministers than for outreach in some cases," she said.
"They appear to be seeking the success off this world, while their 'sheep' and the poor in the community suffer not only spiritually but financially."
She now attends Riverhills Church of God.
Church Says It Is Transparent
After inquiries from The Tampa Tribune, Without Walls published an audit of its 2005 and 2006 finances on its Web site.
The audit, conducted by Lewis, Birch and Ricardo LLC of Clearwater, states that the church took in $39.9 million in 2006. The church reported it spent $18.6 million on churches, church growth and evangelism. It spent $8.7 million on missions and outreach, $1.3 million on conferences and events, and $6.4 million on management, general expenses and fundraising.
The audit does not break down how much the church spent on specific ministries or on salaries for its top staff, as would be required if it were a nonreligious nonprofit agency such as United Way.
In mid-June, the church issued a statement to the Tribune in response to several articles and an editorial that questioned the church finances, including five liens or lawsuits that had been brought against the church since 2000.
The statement, on behalf of Without Walls' five-member board, said the church is more transparent than most.
"We don't know of any other church or for that matter many private businesses that post their annual audit on a public Web site," said the statement, issued through the Tucker/Hall public relations firm.
The statement said that of the $112 million the church has collected since 2000, about $98 million went to missions, outreach and evangelism.
"Without Walls has given to scores of needy and honorable individuals and programs, including programs locally and globally - from the Mayor's Riverwalk project to a Katrina Relief Fund to children's programs in developing countries," the statement said.
Watchdog groups say the information churches often provide isn't enough for a meaningful analysis.
Trinity Foundation, a religious watchdog organization in Dallas, has proposed that the federal government require larger churches - with annual revenue of more than $6 million - to report at least minimal financial information, less than nonreligious nonprofit agencies must report.
Pete Evans, a senior investigator with the group, said it's going to take an uprising from the pews before churches agree to that kind of transparency.
"When these scandals erupt, everyone starts calling for change," he said. "But then it dies down for a while. We shouldn't be surprised that it keeps happening."
Where self-policing has failed, a handful of church watchdog groups formed to help restore a sense of accountability.
The Evangelical Council for Financial Accountability started in 1979 as an oversight board for nonprofit Christian ministries. Billy Graham helped create the council after The Charlotte (N.C.) Observer discovered a $23 million fund in Texas that had not been reported by the Minneapolis headquarters of the Billy Graham Evangelistic Association.
The organization now includes 2,000 nonprofit organizations, including about 100 churches. Without Walls is not a member.
Members must submit audited financial statements, detailed salary information, fundraising appeals and board membership, among other information.
The organization requires that at least half of a church board's members are unrelated to the pastor and not employed by the church.
That's a threshold that many megachurches, including Without Walls, do not meet, experts say. Documents filed with the state list Without Walls' board members as the Whites; Norva Carrington, the church's chief financial officer; Zachary Timms of Heathrow; and Alec Clarke of Acton, Calif.
Behr, president of the evangelical council, said most churches uncomfortable with sharing financial information are reluctant because they've never had to. He said the reluctance rarely comes from anything sinister.
That said, "Our membership goes up when there is a scandal," said Behr, a former executive with Ford Motor Co.
'Blind Trust'
Scott Thumma, a professor of sociology of religion at Hartford Seminary and co-author of "Beyond Megachurch Myths: What We Can Learn From America's Largest Churches," said some high-profile preachers are treated more like celebrities than people of God.
Their supporters put a "lot of blind trust" into these leaders - and they shouldn't be surprised if there are financial abuses, Thumma said.
"People are less apt to be skeptical of their clergy," he said. "And most of those leaders aren't hiding their wealth. It's very much out there. They're preaching prosperity gospel - and they're living it."
Some watchdog groups say people don't have the same level of scrutiny when they give money to the church as when they give to a nonreligious nonprofit group.
A Time magazine poll conducted in June 2006 found that most people trust their pastors more than professional financial advisers.
At a church, the minister baptizes the children and buries the dead. "You know your local pastor," Behr said. "You see them every Sunday. They usually know your name."
But there's a danger that the relationship can become too trusting.
Thumma said he has seen cases in which congregants choose obedience over common sense when it comes to their charismatic, larger-than-life pastors.
"The people see this pastor in a whole different light. If he founded the church and grew it to where it is now, then he certainly must be in touch with God. Otherwise, God wouldn't have blessed him with this tremendously successful ministry," Thumma said.
And to question that leader - especially about money - is to question the fundamental philosophies upon which the church was built.
"You start to wonder: If he's wrong here, maybe the whole thing isn't right," Thumma said. "But if you do speak out, you could shake the whole foundation of the church. The cost of questioning can come at a very big price."
Some megachurch pastors are sensitive to the perception that flagrant materialism can raise concern. Some allow independent audits of their finances and create tough financial boards to ensure accountability. Rick Warren, who started Saddleback Church and sold millions of copies of his book, "The Purpose Driven Life," said he gives 90 percent of his income to his church.
But Warren appears to be rare among today's religious superstars.
"I cannot understand the rationale behind the leaders of Christianity today," said Jeff Poresky, a deacon with People That Love Church and Mission near downtown St. Petersburg. "Why do they have to live like kings and queens when they are supposed to be the most humble amongst us? Why are they receiving so much money, even for their books and appearances, when all that they are is by the Lord? Should this wealth be given back to the church?"
The mission, established in 1987, serves an estimated 50,000 needy people annually. The ministry's $125,000 annual budget comes from donations and from selling discarded pallets to recycling centers. Its seven staff members are unpaid.
"Somehow we've gotten ourselves twisted around," he said of the megaministries. "It will take God himself to prune us to get us right."
J. Lee Grady, editor of Charisma magazine, one of the oldest and largest Christian publications, said there is a growing chorus of people telling him they have reached their limit on what they call "celebrity Christianity."
"They [readers] are tired of the private jets, the limousines and the overemphasis on wealth," Grady said. "When they compare modern American Christianity to what they see in the Bible, it seems horribly inconsistent."
Reporter Baird Helgeson can be reached at (813) 259-7668 or bhelgeson@tampatrib.com. Reporter Michelle Bearden can be reached at (813) 259-7613 or mbearden@tampatrib.com.