Lawsuit Claims Gospel for Asia Misused Most Donations to 10/40 Window
One of the world’s largest missions agencies, Gospel for Asia (GFA), has long promised that it spends 100 percent of donations in the field—specifically, in the 10/40 Window.
More like 13 percent, alleges a lawsuit filed this week by a couple in Arkansas who donated to GFA based on that promise.
Their lawyers hope a judge will grant the suit class-action status. Such a request will take months to resolve. But if granted, the lawsuit could encompass hundreds of thousands of people across America who have donated millions of dollars to the massive ministry founded by K. P. Yohannan in 1979.
Despite a robust Christmas catalog and other fundraising materials that advertise how donors can support specific needs among Christians in India and other Asian mission fields, “GFA spent only $14.9 million of $118.9 million on actual relief efforts, instead spending far more on salaries and overhead for Believers Church and construction of the GFA headquarters,” claims the lawsuit, reviewed by CT. The numbers come from 2013, the latest year for which financial reporting is available and the year plaintiffs Matthew and Jennifer Dickson donated about $1,750 to GFA.
Lawsuits only tell one side of a story. GFA told CT it will "respond accordingly and transparently" once it has studied the allegations. On its website, the ministry stated it has been "grieved to discover that too many [journalists and bloggers] have chosen to consider us 'guilty until proven innocent' as opposed to 'innocent until proven guilty.'"
"We must take the time to fully understand the nature of the accusations being leveled against us, and then we will respond accordingly," GFA stated in its official response to the lawsuit. "The issues surrounding our change in status with ECFA have been misunderstood, but regardless of viewpoint, we have taken and will continue to take a focused approach to implement suggested changes to our operations. We will fully cooperate with the law and are in the process of securing specialized legal counsel to help us and our other legal advisors navigate this new challenge.
"We consider it a blessing to finally have the opportunity to bring this matter to full resolution through an impartial arbiter," GFA continued, "and you can rest assured that in the meantime we will continue operating on behalf of some of the world’s most desperate people in some of its most complex environments. We hope you will pray for us, for these ongoing challenges are certainly also challenges and distractions to our mission."
"We will come out of this stronger," GFA concluded [full text below].
GFA lost its stamp of approval from the Evangelical Council for Financial Accountability (ECFA) in October, after an ECFA investigation concluded that GFA—one of its charter members—had violated five of the accountability group’s seven core standards. This included misleading donors and board members about the state of the ministry’s finances, delaying sending money to its overseas partners, and hiding transactions from both the Indian government and US officials.
GFA leaders said the ministry may have been “unintentionally negligent” in its financial and management practices, but denied any wrongdoing and pledged they would work to regain the ECFA endorsement GFA enjoyed for 36 years.
"The loss of [ECFA] accreditation does not mean that the organization is guilty of illegal or unethical behavior," stated GFA in today's response to the lawsuit. "It simply means the organization no longer meets the standards chosen by ECFA to entitle an organization to the ECFA endorsement.
“ECFA’s review of Gospel for Asia USA helped us to identify areas of organizational and financial management where we have failed,” Yohannan told CT in December. “Our processes and procedures did not grow and improve at the same rate as the ministry in recent years. Despite ECFA’s decision to terminate our membership, we learned volumes from their review and, with the Lord’s help, we will do better.”
GFA’s mission is to bring relief and preach the gospel in the 10/40 Window—a popular target area for evangelical missions, located between 10 and 40 degrees north of the equator. GFA's most significant presence is in India, where it has four entities: the 2.6 million-member Believers Church, Gospel for Asia–India, Last Hours Ministries, and Love India Ministries.
Patrick Johnstone, author of the first six editions of the widespread missions handbook Operation World, ranked GFA second among the “world’s largest mission agencies in 2010” in his book The Future of the Global Church. GFA is listed below Cru (formerly Campus Crusade for Christ International) and above Operation Mobilisation, the Southern Baptist Convention’s International Missions Board, Wycliffe Bible Translators, and Youth with a Mission.
Since GFA is registered as a religious organization, it doesn’t need to make its financial statements public in the United States. But it does have to publicly account for all funds it spends in India, according to the lawsuit. In 2013, the most recent year for which data is available, GFA collected $115 million in donations worldwide. About $90 million came from American donors.
GFA’s national offices in the United States, Canada, United Kingdom, Australia, New Zealand, and Germany dispersed about $118.6 million that year, according to the lawsuit.
The money went toward administrative needs ($27.8 million, including $24.3 million for construction of the new headquarters), GFA affiliates in India ($5.3 million), and GFA International ($76.3 million).
But the four India-based GFA affiliates only reported receiving $33.6 million from GFA International, leaving $43 million unaccounted for, the lawsuit claims based on financial filings in India.
GFA India had some funds in the bank, and reported spending $54.5 million in 2013, according to the lawsuit. That included:
- $9.2 million on field administrative expenses.
- $14.7 million on the purchase and construction of the for-profit Believers Church Hospital.
- $15.7 million on Believers Church salaries and overhead.
- $14.9 million on relief to the poor and needy, including welfare of children ($6.3 million), religious schools/education of preachers ($5.8 million), digging of bore wells ($1.4 million), relief for victims of natural calamities ($0.5 million), welfare of the aged/widows ($436), and welfare of orphans ($0).
That means that of the $115 million donated in 2013, just under $15 million went to actual relief work, the lawsuit claims.
The lawsuit also alleges discrepancies between the amount that GFA collected and the amount it spent for “Jesus Wells” that provide clean water to villages in India. In 2012, GFA collected more than $3.5 million, which should have been enough to dig 2,500 wells. Instead, it spent $500,000, the amount needed for 350 wells. In 2013, GFA collected more than $4 million, enough for 2,800 wells, but spent only $700,000, enough for 500 wells.
Similarly, between 2010 and 2013, GFA gathered more than $4.2 million to support widows and orphans, but only spent about $31,000 for widows and nothing for orphans, the lawsuit claims.
Part of the trouble is the close relationship between GFA and Believers Church, two separate entities that are both founded and headed by a single person: Yohannan.
Since it was founded in 2003, Believers Church purchased a rubber plantation, an undergraduate institute, a teaching hospital, at least six primary schools, and sponsorship of a soccer club. All of the endeavors, except the soccer club, are for-profit, according to the lawsuit.
Another sticking point is the funding of a new headquarters in Wills Point, Texas, that cost $45 million. GFA announced that a $20 million anonymous donation was received in 2013, but that money was actually sent over from GFA’s India office.
“Specifically, that $20 million came from the cash reserves of GFA–India, which consisted of donations to GFA solicited under the promise of GFA’s 100 percent to-the-field guarantee,” states the lawsuit. “Thus, money donated from the United States designated for specific charitable purposes in ‘the field’ in fact was spent in the United States to develop the Wills Point compound.”
The lawsuit, which has yet to be certified as a class action by a judge, is asking that GFA return donations and stop its “unlawful, deceptive, fraudulent, and unfair practices.”
In today's response, GFA attributed the confusion over how it has spent donations to rapid growth while serving in "some of the most complex environments in the world."
"Some of the questions raised relate to measures Gospel for Asia felt forced to take to continue our work in hostile environments where very real threats exist to Christians of all kinds, new believers and international humanitarian organizations," stated GFA. "Gospel for Asia has always had 'enemies' who didn’t want our mission to continue, but sometimes our biggest challenges have related to managing the complex economic and political environments within which God has called us to serve.
"Most of ECFA’s issues resulted from us growing more quickly than our processes and procedures were able to accommodate while we were simultaneously navigating unbelievably complicated circumstances in sometimes dangerous and confusing environments," GFA continued. "Over the course of these challenges, we made some good decisions and some bad ones, and sometimes we didn’t have the right counsel or any counsel at all."
In an apology letter published in CT's December issue, Yohannan wrote that GFA has or will implement "every one of the changes learned through the ECFA review. We have engaged outside counselors who will help us achieve the level of excellence and accountability our donors deserve.”
Below is GFA's full response to the lawsuit:
Statement from Gospel for Asia Board on Recent Developments
Wills Point, Texas – February 12, 2016: In the fall of 2015, the Evangelical Council for Financial Accountability (ECFA) revoked Gospel for Asia USA’s membership, after a 36-year relationship. ECFA is an organization that provides accreditation to Christian nonprofits in the U.S. based on their “standards for financial accountability, transparency, fundraising and board governance.” ECFA accreditation entitles a ministry to use the ECFA seal, but the loss of accreditation does not mean that the organization is guilty of illegal or unethical behavior. It simply means the organization no longer meets the standards chosen by ECFA to entitle an organization to the ECFA endorsement. Gospel for Asia was a founding member of ECFA, so an endorsement by ECFA is and remains a great honor to us. However, many very reputable organizations are not members of ECFA because they do not meet their rules for membership or they have chosen not to meet them, but Gospel for Asia has always valued our endorsement by ECFA and therefore made efforts to remain in good standing for 36 years.
Our change in status with ECFA caused concern by some and raised questions about financial accountability of Gospel for Asia. ECFA’s decision was made after conducting a special review of Gospel for Asia, and we respect ECFA’s evaluation. Our response was to begin a focused review and to implement the ECFA’s recommended improvements.
For more than 30 years, Gospel for Asia has served in some of the most complex environments in the world. Some of the questions raised relate to measures Gospel for Asia felt forced to take to continue our work in hostile environments where very real threats exist to Christians of all kinds, new believers and international humanitarian organizations. Gospel for Asia has always had “enemies” who didn’t want our mission to continue, but sometimes our biggest challenges have related to managing the complex economic and political environments within which God has called us to serve.
Most of ECFA’s issues resulted from us growing more quickly than our processes and procedures were able to accommodate while we were simultaneously navigating unbelievably complicated circumstances in sometimes dangerous and confusing environments. Over the course of these challenges, we made some good decisions and some bad ones and sometimes we didn’t have the right counsel or any counsel at all.
We willingly accepted – and appreciated - ECFA’s concern because our processes and procedures needed improvement, and in some cases, we were still operating like a small organization as opposed to an organization of our size and influence. We have always welcomed ECFA’s efforts to help us improve.
We learned of the lawsuit when reporters began to call us. It’s worth noting, the first to post anything related to the lawsuit was a blogger who has leveled a relentless attack on Gospel for Asia for months.
We appreciate the role and responsibility – and often good intentions – of journalists in the “new media” and in traditional media, but we have been grieved to discover that too many of them have chosen to consider us “guilty until proven innocent” as opposed to “innocent until proven guilty.”
We must take the time to fully understand the nature of the accusations being leveled against us, and then we will respond accordingly. The issues surrounding our change in status with ECFA have been misunderstood, but regardless of viewpoint, we have taken and will continue to take a focused approach to implement suggested changes to our operations.
We will fully cooperate with the law and are in the process of securing specialized legal counsel to help us and our other legal advisors navigate this new challenge.
We consider it a blessing to finally have the opportunity to bring this matter to full resolution through an impartial arbiter, and you can rest assured that in the meantime we will continue operating on behalf of some of the world’s most desperate people in some of its most complex environments. We hope you will pray for us, for these ongoing challenges are certainly also challenges and distractions to our mission.
The staff leadership of Gospel for Asia are working diligently to handle all of this responsibly and with integrity. We will come out of this stronger.
We thank our committed staff, our donors, prayer partners and friends, for walking with us all these years, especially during this challenging season.
As the Board of Directors, we take our responsibility seriously and we have full confidence in the ministry of Gospel for Asia.
-Board of Directors of Gospel for Asia
Here is Yohannan's full apology letter from December:
Many of you are aware that the Evangelical Council for Financial Accountability (ECFA) recently terminated our 36-year membership. We understand this has caused great concern and raised questions about the integrity and financial accountability of Gospel for Asia. Although ECFA’s review did affirm that funds given to the ministry were accounted for, we acknowledge at times we have failed to utilize procedures necessary to ensure the highest level of accountability that you expect from us, and that we expect from ourselves.
We are sorry for the pain and confusion that we have caused. We want to thank you, our sponsors, donors and friends, for walking with us all these years. We, the staff leadership of Gospel for Asia, in close partnership with our Board, are working diligently to pursue greater accountability as we continue to serve in complex environments among multiple nations and cultures.
To date, we have implemented or are in the process of implementing every one of the changes learned through our recent ECFA review. We have engaged outside counselors who will help us achieve the level of excellence and accountability our donors deserve.
Gospel for Asia’s mission is to bring the love of Christ to those who have yet to hear his name. We want to be worthy of this calling, not just in how we engage in ministry, but also how we support those ministry efforts. Our passion is to honor the Lord in all we do.
Thank you for standing with us during this humbling season as we continue to learn and improve.
Your brother in Christ,
K. P. Yohannan, President