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Joe Wingo failed to foresee the cloud he would hang over his family and his nonprofit, Angel Food Ministries in Monroe, Georgia, when he brought his wife and two sons in to help run it.

He wanted them to share God's work. It was a good—and lucrative—family life until the FBI came in February to investigate allegations of financial mismanagement. Wingo, his wife, Linda, and sons Andy and Wesley now find themselves under criminal investigation and named in four lawsuits from two dissident board members and former employees.

Some flags noted in IRS documents and the lawsuits include ballooning family salaries of around a half-million dollars each, unsecured loans to the family from the nonprofit, and commingling the nonprofit's business with a church the Wingos pastor.

There are lessons to be learned about the dangers of mixing family with a rapidly growing ministry, experts say.

"Surely red flags were waving, but nothing was done," said Wayne Rivers, cofounder of the consulting group Family Business Institute in Raleigh, North Carolina. "I would think if the nonprofit board were paying attention, there wouldn't be an FBI investigation."

From the beginning, the board functioned more like a friends-and-family phone plan than an independent group of businesspeople. When Angel Food was a back-porch operation feeding local laid-off mill workers, it worked.

But in little more than a decade, it grew to a $140-million-a-year nonprofit with about 300 employees, selling prepackaged boxes of groceries at food-broker prices by distributing them through a network of 5,000 churches and their volunteers.

Now, pastors are calling with questions and saying they will not expand their food sales until the cloud is lifted, said Angel Food spokesman Juda Engelmayer. Federal investigations can take a year or more to finish.

Dan Busby, president of the Evangelical Council for Financial Accountability (ECFA), said a qualified board is critical to avoid problems and conflicts of interest. (Angel Food is not an ECFA member.) Friends and family may understand Wingo's vision, but they lack experience and independence, he said.

"Are you going to fire your son because of something that you would fire someone else over?" Busby asked. "That is a hard question."

Rapid growth can keep the board and managers busy providing services while office administration gets ignored, Busby added.

Rivers noted another problem: The experience of family members may not match the organization's needs.

"It's really not fair to ask wet-behind-the-ears kids to help operate a business that is doubling every year," he said.

Engelmayer said Angel Food is addressing its problems; it has hired top professional management and is undergoing a forensic audit. Meanwhile, Linda and Andy have left the staff.

"The rapid growth became a little too much to handle," he said. "It's been a learning experience for [Wingo] in that he knows now he needs qualified staff to run the business."

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More Christianity Today articles on nonprofits include:

Filling in the Blanks | A revised tax form should make nonprofit organizations more transparent. (October 18, 2007)

Leaps of Faith | What business execs are learning as they lead Christian nonprofits. (March 7, 2007)

Double-entry accountability | Two financial watchdogs are better than one. (May 1, 2004)

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July 2009, Vol. 53, No. 7, Page 13