Information on religious charities scarce Watchdog groups provide some clues


January 24, 1993|By JANE BRYANT QUINN | JANE BRYANT QUINN,1993, Washington Post Writers Group

New York -- When you get a fund-raising appeal from a religious charity, how do you know how much money it really spends on good works? Five years after the spectacular collapse of Jim and Tammy Bakker's religious empire, PTL, sound information on church-related groups is still hard to come by.

In half the states, religious groups are exempt from the charities registration laws that disclose at least some information about public fund-raising campaigns. Churches, synagogues, mosques and their auxiliaries are excused from filing the federal 990 forms that disclose a charity's finances. A 990 does have to be filed by religious charities that aren't part of churches. But even if the group will mail you a copy (many won't), you probably won't understand it. The same is true for a charity's own audited financial statement.

Several private watchdog organizations interpret financial statements for you. But many church-linked groups refuse to submit to that kind of scrutiny. One example: Feed My People International, an arm of the Don Stewart Association,

church. Prospective donors get heart-rending letters on behalf of starving children, with virtually no facts about where and how the money is distributed. Three watchdog groups have asked for details and been turned down.

Don Stewart's lawyer, J. C. Joyce of Tulsa, Okla., says, "The people who are interested in the organizations don't want the financial information. The idiotic [groups] that want to harm the organizations want it."

But plenty of splendid charities accept, even welcome, outside scrutiny.

Even a group OK'd by a watchdog might use controversial accounting methods.

Take Larry Jones International Ministries (Feed the Children), which raised $110 million in 1991 and met the standards set by the Council of Better Business Bureaus' Philanthropic Advisory Service.

In 1990 and 1991, Penguin Books USA gave Larry Jones 83,000 cases of damaged or otherwise unsold paperback books, which Penguin says were worth around $25 a case. Jones, however, valued the gift at $234 a case in 1990 and $195 in 1991.

Larry Jones defended the higher valuations as reasonable. "I say to my accountant, 'Stay within the law,' and he says the law is fuzzy," Jones says. When donations have a higher value, a charity's management and fund-raising costs look relatively lower, which makes the charity appear more efficient.

Larry Jones donated these books to two other charities, which in turn passed them on again -- each time at values much higher than Penguin had set. A total of four charities, accused of inflating the values of the books, have been sued by Connecticut or Pennsylvania. They all have denied the charges. Larry Jones wasn't required to register in either state and isn't a defendant.

Before giving to an evangelical Christian charity, check to see if it belongs to the 13-year-old Evangelical Council for Financial Accountability (ECFA). ECFA enforces a code of ethics, scrutinizes its members' fund-raising appeals, requires independent audits and makes periodic on-site reviews.

You can get a free list of its 715 members, and up to three short "member profiles" that summarize the charity's finances, from ECFA at P.O. Box 17456, Washington, D.C. 20041 (or call [800] 323-9473). Billy Graham belongs to ECFA; TV evangelists Oral Roberts, Jimmy Swaggart, Paul Crouch and Robert Schuller don't.

The National Charities Information Bureau, based in New York City ([212] 929-6300), publishes a free list of organizations that do and don't meet its standards; a handful of them are religious groups. The Philanthropic Advisory Service of the Council of Better Business Bureaus in Arlington, Va., offers a similar list for $2 ([703] 276-0100).

Of the two, the NCIB is more skeptical of charity accounting. "The accountants are part of the problem today, not part of the solution," declares NCIB head Kenneth Albrecht.

The accounting profession is debating new accounting guidelines. In the meantime, you can't even trust the 990 forms. The National Association of State Charity Officials finds "a consistently high level of error and abuses in the completion" of these forms.

I do believe that the majority of religious charities function in good conscience.

But conscience gets a boost from that still, small voice that warns us someone just might check.

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