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Friday, October 26, 2012

Be careful who you send money to

Perhaps you've seen a 30-minute TV spot for the International Fellowship of Christians and Jews, based in Chicago. It features an earnest rabbi, Yechiel Eckstein, soliciting funds to assist the relocation of impoverished Jews to Israel. The TV spot makes a strong case for his efforts. The IFCJ posts an annual report and financial statement on its website, as well as a link to the current IRS Form 990. The IFCJ is audited by McGladrey, a well-regarded accounting firm. The website also says, "The International Fellowship of Christians and Jews fulfills the Council of Better Business Bureau Wise Giving Alliance's twenty rigorous standards." It's fair to say that IFCJ is far more transparent than most religious organizations that solicit money on TV. What could be amiss?

One must read the fine print of the Form 990 to see that Rabbi Eckstein's reportable compensation from IFCJ was $491,161 last year -- with another $293,032 of "other compensation from the organization and related organizations". He's not alone. The Assistant Secretary and Senior VP of IFCJ had $230,440 in reportable compensation. Yael Eckstein-Farkas, the daughter of Rabbi Eckstein, received $130,051 in reportable compensation.

Think of a business that does one hundred million dollars a year in revenue. No eyebrow would be raised if the CEO of such a business were paid half a million dollars. But IFCJ is a charity. How much should CEOs of charities, particularly religious charities, be paid? I don't have a precise answer to that question, but I believe half a million a year is too much. The fact that other religious charities may be paying their CEOs comparable amounts is essentially saying that two wrongs make a right.

Don't think that I am picking on a Jewish organization. John Ed Mathison was formerly the senior minister of a very large United Methodist congregation in my home town of Montgomery, Ala. My parents are members. There is now an organization called John Ed Mathison Leadership Ministries that facilitates his ongoing ministry subsequent to retirement from the pastorate. I'm sure "John Ed", as he is universally known, is a great guy and a fine Christian, although his style of Christianity is not my personal preference. He stays busy. I imagine that he was not well paid while he came up through the ranks of ordained ministry. But the Form 990 for calendar 2010 for John Ed Mathison Leadership Ministries is available at GuideStar (a free website that I encourage each of you to learn how to use). It reveals that the annual intake of the organization is about $500,000 a year. The organization spends less than half of what it brings in; consequently, it has accrued over a million dollars in the bank. It pays $122K in salaries, but its employees are not identified by name so it's impossible to say where the $122K goes.

My questions are simply these: why does an organization raise more than twice as much money as it spends, and what do they intend to do with the accrued surplus? There's no mention of this on the minimalist website of John Ed Mathison Leadership Ministries. I wonder how many people who contribute to the organization in small amounts would be surprised to learn that it has a million dollars in the bank.

I have served on the boards of two non-profits in Raleigh -- as president of one and as chair of the audit committee of the other -- and I've served as a Trustee for the Episcopal Diocese of North Carolina and as Senior Warden of the Episcopal congregation where Gail and I attend. I can say with certainty that these four organizations are impeccably clean. But when it comes to other organizations, let the donor beware.