Fund Raising: The New Watchdog on the Block Enlarges Its Turf

The ECFA proves its viablity and tests its clout.

After three years of existence, the Evangelical Council for Financial Accountability (ECFA) appears to have won a permanent role in promoting uniform accountability and full disclosure of financial information among Christian organizations that solicit contributions from the public.

Over the last year, member organizations increased from 90 to 181, their combined incomes totaling $706 million. And ECFA’s fund deficit last year of $18,000 has been erased. The ECFA member seal has become a familiar sight. (One group that recently sent out a promotional mailing with only the ECFA emblem appearing on the envelope was admonished to include its own name as well.)

But although the fledgling entity’s acceptance seems assured, it is still staking out its turf between secular watchdog groups on the one hand, and certain religious trade associations on the other.

Most prominent among the former is the Council of Better Business Bureaus. The CBBB traditionally has concentrated on consumer fraud complaints. But about a decade ago, it got into oversight of charities because of many public inquiries seeking to learn whether fund raisers were legitimate.

Christian organizations critical of the CBBB complain that while the council says it does not evaluate the purposes of groups or even their operating standards, its publications give the impression of blacklisting. The CBBB Philanthropic Advisory Service issues a pamphlet, “Give, but Give Wisely,” that lists organizations that do and do not meet its standards for charitable solicitations. Organizations, for instance, that have more than 25 percent of their board of directors on their staff will be rejected right along with groups that refuse to divulge financial information and strong-arming cults.

The ECFA, by contrast, lists its members, but will not reveal those rejected or even those in process of applying.

At this year’s annual meeting of the ECFA in Washington, D.C., last month, representatives of the CBBB were invited to address the group. But the invitation came over the deep misgivings of several board members. Nancy DeMarco and Helen O’Rourke warned the group that the Better Business Bureaus are in the process of issuing more stringent standards on controls and use of funds. (The discussion draft outlines a requirement that at least 60 percent of total income be spent on programs directly related to the organization’s purposes, that fund raising and administrative costs not exceed 40 percent, and that fund raising and development not exceed 30 percent.)

The CBBB spokesmen acknowledged that the ECFA had come closest of any self-policing group to having a measureable impact on the number of inquiries the Better Business Bureaus receive. This, they said, was because evangelical organizations are in the forefront of those in public fund raising.

Luncheon speaker Jerry Falwell, well-known pastor of the Lynchburg. Virginia, Thomas Road Baptist Church, articulated the anti-BBB sentiment of many evangelicals. Using 2 Corinthians 4:2 as his text, he urged public disclosure because “it’s right.” “No one can ultimately cripple your ministry but you,” he declared, “by defensively refusing to play by the rules and giving the appearance of wrongdoing.” But he went on to suggest that Christians cannot submit to secular watchdog groups. “This world is still no friend to grace,” he said.

Those with an antigospel bias, Falwell said, will always oppose effective Christian ministry, no matter how far above reproach its methods are. But the ECFA is vital, he said, for the millions who are neither antigospel nor progospel. “We need to be a part of exposing those organizations that are fraudulent,” he said, adding puckishly that soon “everyone will be forced to join ECFA voluntarily.”

That is essentially the idea behind the launching of ECFA. The man most directly responsible for its inception was also a speaker at this year’s meeting: Senator Mark O. Hatfield (R-Oreg.).

Hatfield recalled that on July 29, 1977, Billy Graham, Stanley Mooneyham of World Vision, and the leaders of five other Christian organizations met in his office to discuss pending legislation. Former Rep. Charles H. Wilson’s (D-Calif.) bill would have tightly regulated all public fund raising, requiring financial disclosure with every advertisement, commercial, and at the point of personal solicitation. Hatfield euphemistically said that he “decided to hold off on my alternative bill to allow voluntary disclosure a chance.”

Those present got the message. The preliminary meetings that eventuated in the ECFA were held that December. It was organized in September 1979. One observer wryly remarked that ECFA is Mark Hatfield holding a gun to the head of the evangelicals.

This year Hatfield, an evangelical himself, continued to apply pressure with the utmost courtesy. He reminded participants that he had called for the voluntary watchdog group to name violators and departures from the spirit as well as the letter of its standards. He also had called for genuine disclosure at the point of solicitation as well as in annual reports, he said.

Hatfield went on to insist that Christian organizations cannot surrender their control to professional fund-raising organizations that may pragmatically plan “emergencies” to increase income or build a campaign based on fear—“the homosexuals are talking over” or “Christians are being driven off Capitol Hill.” He also challenged the gathering to ponder whether moneys raised above the amount required for a stated goal can be diverted to other purposes.

Evangelicals, Hatfield concluded, “cannot go on blithely building our own kingdoms and power bases.” “The Lord,” he said, “is the final grantor of the ECFA seal of approval,” and may withhold his blessing from those abusing their trusts.

Christians, bewildered at the prominence this issue has assumed over the past few years, may wonder if believers are trailing far behind their secular counterparts on funding accountability.

The answer is no, according to a third speaker, William Warshauer, chairman of the nonprofit industry services division of Price Waterhouse and Company, a prominent auditing firm. As recently as 10 years ago, he said, no professional standards of accounting for nonprofit groups existed. The first guidelines in the field were issued by the American Institute of Certified Public Accountants (AICPA) as recently as 1973 and 1974. Since then the field has been narrowed somewhat by treating hospitals and educational institutions separately from other nonprofit organizations. That still leaves groups as disparate as foundations, labor unions, museums, and local governments lumped in with charities in one category. But it did allow the AICPA to draw up a Statement of Position in 1978: nonbinding standards of accounting for the field.

The associated group empowered to set mandatory standards is the Financial Accounting Standards Board, located in Stanford, Connecticut, which the Wall Street Journal has labeled “the most prolific rule-making body in government.” It turned its attention to the nonprofit sector only in 1977, and so far has developed only a “conceptual framework” as a basis for developing a consistent set of accounting standards. Warshauer said that this is an “intricate, confusing, time-consuming process.” He added that although he is sure uniform standards will evolve, the input period is likely to be protracted in an effort to achieve wide acceptance of the result.

ECFA not only needs to gain recognition comparable to the longer-established Better Business Bureaus. Certain evangelical professional associations also see it as unnecessary for their constituents, while welcoming it for others.

The Interdenominational Foreign Mission Association, for example, began working on its comprehensive Accounting and Financial Reporting Guide for Missionary Organizations in 1975, completing its work in 1979, just one month after the ECFA was organized. Both the IFMA and its counterpart, the Evangelical Foreign Missions Association, while officially neutral, have informally taken the position that their standards are as comprehensive as those of the ECFA and that mission agencies belonging to them should feel no obligation to join ECFA.

An observer with an accounting background who is sympathetic to both groups notes that such a response misses the point. The missions associations are trade associations, he says, concerned with a broader range of member agencies’ interests, while the ECFA is more narrowly designed to certify integrity to the “watching world.” He judged that half of the member IFMA missions have not met the organization’s own reporting standards over the past 10 years, and that a significant percentage is still struggling to meet them. But no action has been taken, he says, because it is very difficult for a trade association to decimate its own ranks or even to be tough in enforcement.

IFMA executive director Edwin L. Frizen, Jr., differs. He acknowledges that a number of member agencies’ reports were less than full audited reports, but says they were always prepared by certified public accountants. With the completion of the Guide, he estimates that less than 20 percent did not immediately meet the standards spelled out for the first time. But, he says, all have taken steps to bring them into full qualification within the next year. Moreover, he adds, the IFMA has dismissed a half dozen or so members over its 64-year history.

The ECFA has attempted to respond by finding ways to be helpful to the so-called faith missions. In early April, it hosted a meeting with eight mission agencies representative of the diversity in this grouping. Chaired by World Vision executive Ed Dayton, it explored the fund-raising philosophies and problems of the nondenominational missions with their executive and financial officers. The philosophies ranged from faith alone, to faith plus full information, to energetic solicitation.

Fund-raising problems were evident. At least one agency reported that a decade ago its accepted candidates typically had raised their support and were off to their overseas assignments in about one year with few if any dropouts in the process. Now, it typically takes two years to obtain the required support and as many as half of the candidates grow discouraged and withdraw in the interval.

ECFA executive secretary Olan Hendrix felt the ad hoc consultation proved positive in that the participants were not defensive and that fund-raising obstacles were identified.

Even without a coalescing of views in this sector, however, the ECFA’s prospects look bright. At the three-year mark, the ECFA has set itself the goal of 250 member organizations by the end of 1981. The recognized seal-of-approval role it seeks in accrediting evangelical organizations that solicit from the public is almost within grasp.

Personalia

Robert Cooley, an archaeologist at Southwest Missouri State University in Springfield, has been elected president of Gordon-Conwell Theological Seminary in South Hamilton, Massachusetts. The announcement ends a two-year search for a successor to Harold J. Okenga. Cooley is from an Assemblies of God background.

Ron Cline was elected president of World Radio Missionary Fellowship (HCJB in Quito, Ecuador), to succeed in 1982 Abe C. Van Der Puy, president for the last 20 years. Cline has served with the mission for five years.

R. Michael Steeves was appointed general secretary-treasurer of the Baptist Federation of Canada. Steeves has been pastor of churches in New Brunswick, Nova Scotia, and British Columbia. The Baptist Federation includes four conventions and unions, and has 120,000 active members across Canada.

Texas multimillionaire T. Cullen Davis threw his weight behind a proposal to make Texas public schools teach creation science along with evolution science. Davis, a recent convert and close friend of evangelist James Robison, sent a letter to each member of the Texas legislature indicating his support for the bill. He added. “As a businessman with many employees throughout the state, I will be most pleased if I can report to my associates in your area that you have affirmed a position on these bills.”

Archbishop of Canterbury Robert A. K. Runcie, titular head of the world’s 64 million Anglicans, completed a 21-day tour of the U.S. earlier this month. Much more low-key than Pope John Paul II’s U.S. tour 18 months earlier, the visit was called “pastoral” by Runcie, 59, a nonevangelical traditionalist and World War II veteran who breeds Berkshire pigs as a hobby. His trip ended with a call for unity among Christians during the week-long meeting of the world’s 28 Anglican primates in Washington, D.C. It was the first time the bishops convened in the U.S.

Have something to add about this? See something we missed? Share your feedback here.