A new Senate investigation of six media ministries will begin to uncover how these secretive organizations are governed. Over the past year, this blog has been studying two prosperity gospel ministries. From a variety of sources, we've pieced together a picture of how these organizations operate. We hope the Grassley committee is able to shed more light on the practices outlined in a series of articles starting today.
Kenneth Copeland wants everyone to think the inquiry from Sen. Charles Grassley's Senate Finance Committee into the financial affairs of his media ministry is no biggie. Copeland's enterprise is one of six ministries asked to submit responses to the Senate committee, which is looking into abuses of non-profit tax status by megachurches.
Kenneth Copeland Ministries (KCM) has insisted it operates according to the law. Through a variety of communications, including a 45-minute video featuring son John, the earthly empire's CEO, KCM says it has disclosed everything the IRS requires — which, in the case of churches, isn't much.
Meeting the letter of the law is a far cry from being open and above board with the "partners" who fund the ministry with their tithes, offerings, donations and purchases of books, videos and even internet services. As I noted in an earlier post, the Copeland ministry does not disclose revenue, details of expenses or even who serves on the board of directors that approves his compensation and other material financial matters.
The detailed questions in the Senate committee letter to KCM [via ataxingmatter, which has all six letters] gives an idea how complex those dealings really are, as well as why Copeland above all the other evangelists might want the answers kept under wraps.
While the six ministries are similar in many ways, not all are totally opaque in their reporting. Joyce Meyer Ministries offers the most complete disclosure, including annual reports and board information. Paula White Ministries publishes audited financial statements online. Benny Hinn devotes several pages of his web site to non-specific answers about finances and cover sheets from his auditor reports.
KCM posts only one generic pie chart covering the Eagle Mountain International Church (EMIC) part of its operation. This is a different, even less detailed graphic than the one for KCM that appeared when I linked to the page on Nov. 8.
John Copeland explains that KCM/EMIC is merely observing
the separation between church and state and exercising the
"Constitutional right to privacy." (This right, which is scorned as bad
constitutional law when applied to reproductive choice, apparently is
an inviolable principle when it shields church finances from scrutiny.)
Giving the names of his directors or donors to the public would subject
them to "harassment and persecution," Copeland says.
Before this is all over, KCM may be happy to settle for mere persecution.
The prosperity gospel business model
Questions running through the Grassley letters might chill other evangelists beyond the Big Six. That's because they have not just embraced the prosperity gospel message. They've adopted the prosperity business model and operating style as well.
Most of the investigated televangelists — and scores of imitators or active partners — make use of a holding company-like structure they call a "ministry." The ministry operates a variety of ventures that produce earned and contributed revenue streams. It may also serve as a master brand that endorses the individual operations, but the farther the businesses stray from the organization's churchly purpose, the more likely they are named and structured to blur the financial connection.
In most cases, a large church anchors the ministry enterprise. It provides a local donor base, the studio audience for the
telecasts, space for other ministry ventures, and volunteers easily
mobilized for mission projects — or to get out the vote for favorable candidates. Sometimes the church is run by another
pastor — in Copeland's case, his daughter and son-in-law. The church
typically offers a variety of its own ministries for youth, prayer groups, Bible study, business networking, counseling, etc.
Perhaps most important, the church establishes the nonprofit purpose that helps justify the tax exempt nature of the ministry's other businesses. The relationship between the church and the founder's ministry is often murky, because the church name is also used as the name of the main corporate entity, while the founder's name is on the ministry. They present different public faces — such as separate web sites — but to the average person, the ministry and the church may appear to be one and the same.
For example, Copeland's Eagle Mountain International Church, Inc. states it is "aka Kenneth Copeland Ministries," but maintains separate web sites, including a dedicated site promoting a $10-million church building fund. Mac Hammond Ministries is made to appear as a subset of Living Word Christian Center.
Without fuller disclosure, it's very difficult to tell who controls the right hand and who merely sits at it.
One of the challenges for Grassley's committee is to untangle the flow of money — not just to the ministry founders, but among the various entities where behind-the-scenes operations may not be so distinct.
A former KCM employee told me:
There are employees that work specifically for EMIC that do not work for KCM, and to work at EMIC you must be church member. However, there are employees of KCM that do a great deal of EMIC's work such as Mail Processing, TV, Administrative work for Licensing Ministers, Purchasing, Publications, Accounting, Customer Service, Housekeeping, etc.
Pastor George Pearsons [Copeland's son-in-law] has told the staff before, EMIC tithes back to KCM for these services. This is instead of it coming out of their payroll. KCM processes all of the offerings to EMIC. It's very overlapping.
If you're still confused about how these ministries operate, believe me, it doesn't get easier. I've tried to touch the high points without digging into Copeland's international ministries and son John's cattle ranch on donated church land.
Maybe Congress can make sense of it.
Coming next: Franchising the Word. And are Boards truly independent?
