Amid all the other headlines at this week’s Southern Baptist Convention annual meeting, you might have missed an important internal debate that happened about financial transparency.
To those outside the nation’s largest Protestant denomination, this may not matter. But for anyone who puts money in an offering plate in a Southern Baptist church anywhere, it should matter.
This debate is about how much the person in the pew should be able to know about how their offerings are spent. It’s not a new debate, but it got the clearest hearing ever on Wednesday morning at the SBC annual meeting.
“For anyone who puts money in an offering plate in a Southern Baptist church anywhere, it should matter.”
To set the stage for explaining this, consider your local government or even your state government. Even in the most conservative locales, a certain level of financial transparency is required. It is usually possible, for example, for taxpayers to know how much money is being spent on roads or buildings or tourism, and to know how much the mayor or governor is paid.
The same is true of most nonprofits in the United States because of something called IRS Form 990. Most nonprofits are required to file this report annually and publicly. Form 990 includes information on sources of income and sources of expenditures — not in line-item detail but in broad categories. Form 990 also requires disclosure of compensation of an organization’s top paid staff if it exceeds $100,000.
From the IRS website: “All filing organizations … must list and report compensation paid to the organization’s five highest compensated employees with reportable compensation greater than $100,000 from the organization and related organizations, as well as to its five highest compensated independent contractors to which the organization paid more than $100,000 for services.”
Neither the SBC Executive Committee nor any of the SBC’s mission boards or seminaries are required to file Form 990 because they are classified by the IRS as “churches” and therefore exempt from this level of reporting.
But within the SBC, there has been a growing movement to demand similar voluntary accounting from the SBC’s entities, which together take in hundreds of millions of dollars every year. Currently, every entity is required to publish an independent audit, but those documents do not report the same kind of data as Form 990.
Why this matters
The movement to require greater transparency in SBC finances has been ignited most by concerns about one agency, the North American Mission Board. Based in Alpharetta, Ga., this $200 million a year entity is widely believed to be freewheeling with its assets. And its leaders are notoriously secretive about everything.
For example, NAMB’s primary mission is church planting. But NAMB provides no public data on where churches are being supported and at what level. It has cut out state Baptist conventions from partnership agreements that used to guide them and angered state leaders in the process.
At the same time, NAMB has become well-known for its high-dollar swag — from branded Stanley Thermoses to branded polo shirts and jackets. At this year’s SBC meeting, NAMB was giving out large black duffel bags you could see people carrying all over the convention center.
Kevin Ezell (left) and Johnny Hunt in a photo now removed from the NAMB website.
But the simmering fire of concern sparked into a bonfire last year when former NAMB Executive Vice President Johnny Hunt filed a defamation lawsuit against the SBC and claimed, among many other things, he had lost half a million dollars a year in income from his job at NAMB.
NAMB officials said that wasn’t true, but they also didn’t offer an alternative number. And on top of that, as BNG previously reported, Hunt and his family run a cottage industry that has made them wealthy by lucrative side deals with NAMB and other SBC entities.
Meanwhile, other entity heads — like Al Mohler at Southern Baptist Theological Seminary — run personal businesses out of their SBC-owned properties, even using their SBC business addresses on incorporation papers.
None of this gets reported to the average Southern Baptist — or even the well-informed Southern Baptist.
A culture of trust
There was a time in the past when all such financial information was made public. And it was made public in part because that is the pattern found in American democracy. Financial transparency breeds trust in the system.
When I worked with Kentucky Baptists two decades ago, the state convention published the salary and benefits of every person who worked in the Baptist Building. It was plain for all to see. I don’t recall ever hearing complaints, because there were no secrets.
The same used to be true in local churches and still is true in many smaller churches.
Josh Abbotoy
Josh Abbotoy, who is part of a conservative group that seeks more financial transparency in the SBC, spoke to this issue on the floor of the convention Wednesday.
“I’m a messenger from Midway Baptist Church in Cookeville, Tenn.,” he said. “I’m a member of a small rural church. Every single year, my pastor gets up and he defends the church’s budget in front of the whole congregation, which is full of farmers and factory workers and grandparents on fixed incomes. He gets up there and defends his salary. He defends every little expenditure that we spent on our VBS that summer.
“If our little church can do it, I think we as a convention can do it too,” he continued. “I run a small nonprofit. Its budget is less than 1% of the SBC’s annual budget. Every single year we prepare a Form 990. If we can do it, so can the SBC.”
On the other hand, Jesse Watkins, a messenger from Friendship Southern Baptist Church in Concord, N.C., said he is the pastor of a small church “where our budget goes to every member and we defend every line item. However, this convention is not a small church. There’s 10,000 people here and we already have too much to do and I don’t think we need to turn the convention to a line-item review of every single entity. We trust the trustees and we want them to do their jobs.”
Yes, the SBC is a vastly larger organization than most local churches, but whether that requires more or less financial transparency is a matter of opinion.
The argument for more transparency
Rhett Burns, pastor of First Baptist Church of Traveler’s Rest, S.C., made the motion this year for Form 990-level transparency. His motion sought to amend the SBC Business and Financial Plan to include such reporting “in the same detail, scope and quality as would be required to be disclosed to the public and the informational return of organizations from income tax on Form 990.”
Rhett Burns (screencap)
Burns is a former SBC international missionary, and he began his appeal by speaking of the power of the Cooperative Program budget.
“Trust is the foundation of our cooperation, and transparency builds that trust,” he said. “This 990-level transparency that my amendment secures gives you, messengers and churches, the financial information you need to know that you can trust that your missions dollars are being spent rightly for the Great Commission.”
Burns outlined several “fictions” and “truths” about his motion:
“Fiction: We already have transparency because we have audits. Well, audits are great. They tell you that the receipts add up but they do not provide for external transparency to churches and messengers.
“Fiction: There are legal reasons why entities can’t tell you what’s on a 990 or it will endanger our tax-exempt status. Fact: Legal reasons don’t keep the Woman’s Missionary Union or our universities from reporting with no resulting legal entanglements.
“Fiction: It will endanger our missionaries. Fact: This amendment explicitly has protections for missionaries like my family that served in difficult places.
“Fiction: This undermines our trustee system. Fact: It strengthens our trustee system through public accountability for the trustees’ most fundamental decisions.”
“Fiction: The last or the best days of the Cooperative Program are behind us. Fact: Our best days are ahead of us if we can restore trust through transparency.”
The argument against more detail
Next, Jeff Iorg, president of the SBC Executive Committee, came to the microphone to speak against Burns’ motion. And please note the power dynamic here: Burns spoke from a microphone on the floor amid the 10,000 messengers; Iorg spoke from the elevated platform to defend the institutional status quo.
This is the way the SBC annual meeting always works, and it is not unintentional.
Jeff Iorg (BP photo)
Iorg referenced previous litigation involving Southwestern Baptist Theological Seminary that he said affirmed “that we have First Amendment protections from such invasive reporting as is required by the 990. We stand on that today and assure you that we are not trying to hide behind that ruling but we are instead defending that ruling and upholding that ruling and wanting to stand within it.”
His reference was to lawsuits involving Southwestern Seminary in the 1980s about employment issues and labor laws.
Therefore, he said, “voluntarily offering that kind of information sends a signal that we find ourselves in some way subject to federal government oversight, which none of us want to have.”
Iorg, former president of a different SBC seminary, then said adoption of the Burns amendment “will set up legal conflicts within entities.”
He explained: “You require your entities to operate according to your Constitution and bylaws, by the laws of their states, and part of the laws of their states are that their trustees have a duty of care and a duty of loyalty to the entity, meaning they must never act in any way that (negatively) affects the mission of the entity.”
He implied there could be a conflict between what the convention messengers — who technically own all the institutions — want and what the trustees want.
And then, he said, “You’re also asking for information that messengers can’t change. Suppose any of this information is released publicly and then you decide you want something done about it. You’ll make a motion, and that motion we refer to the trustees who approve the information in the first place. … They’ll be back making the same decisions they’re making today.”
“The processes of transparency in Southern Baptist life are more robust than it is outside Southern Baptist life.”
Iorg continued: “This also has a significant issue for salary inflation.”
And this: “The motion maker made no reference to anyone who actually has to file a 990 and the objections they have to it and the damage it does to their institution on an annual basis.”
Calls for more transparency are “based on many myths that there is somehow inflated salaries or other financial discrepancy or fraud or any other kind of misuse of funds in Southern Baptist life,” he said.
“I remind you, Southern Baptists, you already elect over 500 of your fellow Southern Baptists as trustees to maintain the accountability of the finances of this convention, and there is no outcry from the trustees who have this information; no one is claiming from their groups that this information needs to be released because it’s inappropriate and only been hidden for wrong reasons.”
In his final point, Iorg said SBC entities don’t need more financial transparency “because unlike most of these other organizations that were just mentioned in terms of the nonprofits across our country, they have self-selecting trustee boards. You select your trustee boards. They account only to themselves for their finances; yours account to your trustees.”
The self-perpetuating boards of other nonprofits “do not have your doctrinal standards,” he added, saying, “The processes of transparency in Southern Baptist life are more robust than it is outside Southern Baptist life.”
What in the world?
As I sat listening to Iorg’s full-throated defense of lack of financial transparency, even I was shocked. Much of what he said simply isn’t correct.
I run a nonprofit that files a Form 990. I know lots of nonprofit leaders who file 990s. And neither I nor they have ever thought we were being harmed by doing so. In fact, we are helped by this process because it demonstrates financial transparency to our donors. All our 990s are publicly available on the IRS website and on sites like GuideStar.
There is no “damage done” to nonprofits by filing 990s. Surely Iorg misspoke.
“This is where the far-right crowd in the SBC is 100% right in their concerns.”
And his argument that messengers couldn’t do anything about concerns they might find in a 990-style report only illustrates the tightly controlled system SBC insiders maintain on parliamentary procedure. It is exceedingly difficult to get a motion debated on the convention floor without it being referred to the trustees of the very entity it concerns.
This is where the far-right crowd in the SBC is 100% right in their concerns. SBC agency leaders are not actually accountable to messengers because the system is rigged to keep the powerful in power.
Even a casual observer would have to ask, “What are you so afraid of people in the pew finding out?”
We know from previous reporting that trustees at the various entities — NAMB, Lifeway and Southern Seminary are good examples — are worn down by entity leaders and legal counsel and repeatedly told they don’t need to know what they say they need to know.
Remember that amicus brief arguing against a sexual abuse survivor in Kentucky? Not a single trustee of any of the entities that signed that outrageous brief spoke publicly about it — if they even knew about it before BNG reported on it.
As Benjamin Cole and I have discussed on our “Stuck in the Middle with You” podcast series, the SBC trustee system is broken. It is bloated and unresponsive and set up to be controlled by a handful of insiders.
Please note that another motion that died at this year’s convention sought to limit people on the SBC payroll from serving as trustees of other SBC institutions. That’s right, the SBC allows seminary professors, for example, to serve as trustees of other denominational bodies — not to mention the spouses and children of denominational employees.
For Iorg to say the SBC trustee system is worthy of trust on financial issues is laughable. How else did Southwestern Seminary get in the ruinous trouble it encountered under two previous presidents? Outsiders kept sounding alarms, but the trustees swore everything was fine even as the ship sank.
To his credit, current Southwestern President David Dockery not only has righted the ship but opened the books. BNG readers now know more about the finances of Southwestern Seminary than most trustees did before.
But no other SBC entity has followed suit. Not one.
It is understandable that some Southern Baptists continue to press for more financial disclosure. And it is understandable that the powers that be continue to resist — because that is what institutional preservationists naturally do.
What needs to happen now is for some duly elected trustees to press for more financial transparency from the inside. They are the only ones who can make a difference.
Related articles:
Still no external review of North American Mission Board finances
Critics see NAMB race car as symbol of financial excess they still want to curb
NAMB skewered for its nonresponse response on Hunt’s compensation
Here’s how to force SBC entities to be accountable to people in the pew about their finances | Opinion by Mark Wingfield
‘Pastor Johnny’ is the head of a family empire that feeds off the SBC
SBC abuse survivor advocate says controversial legal brief originated with Lifeway
Where are the trustees? | Opinion by Maina Mwaura