ECFA

Limitations of the ECFA Seal

The ECFA’s seal is limited in the information that it supplies to donors. A ministry either passes and is a member, or it fails and does not gain membership. It is a black or white choice with no shades of grey to help donors discern which of those member ministries are the best or worst in their class. Given its role as a peer accountability, membership organization, it is impossible for the ECFA to make any judgments that would help donors distinguish the relative merits of one member over another. This would simply not be acceptable to its members. Thus, the approach that the ECFA must take is to set the bar at a certain height and approve every ministry that can get over it regardless of whether the bar is set at an appropriate height, was easily cleared or was nearly knocked off. As a self-regulator, it simply cannot be in a position of judging its dues paying members against one another. It is also difficult for the ECFA to get members to agree to raise the bar. Additionally, it is unlikely that the ECFA could require a ministry to address an issue that would be of concern to donors that is not covered by the ECFA’s standards.

The ECFA’s limited resourc es also mean that only a small portion of member ministries are subject to a field review each year (roughly 10%). Reportedly, a significant number of ECFA members have never been reviewed. Given the importance that the possibility of a field review has on ministry behavior, this situation is far from ideal and can cause donors to wonder whether the ECFA is able to adequately carry out its mission with its present level of funding.

Another manner in which the ECFA is limited in what it can do is comment on non-member ministries that may be violating its standards. Thus ministries outside of ECFA membership are not at all subject to its standards or specific ECFA comments about their activities. Since the ECFA’s current standards are very good , donors should be particularly careful when donating to non-ECFA Members who may or may not be abiding by them. Also, a ministry may not be a member of the ECFA due to theological issues and donors should thoroughly investigate this aspect of non-ECFA ministries before donating. As a donor advocate, Wall Watchers, through its www.MinistryWatch.com website, has no such restriction and can comment on any ministry it chooses to review and more than 150 non-ECFA ministries are currently included in our database. Also, our ministry research reports indicate which ministries are ECFA members and which are not so that donors can know when they need to be extra vigilant.

The ECFA is Constrained from Alerting Donors

When one of its member ministries gets in trouble, the ECFA is also hesitant to speak about these problems publicly. In fact, it will typically only comment if the information somehow gets into the public realm by another manner or in response to direct inquiries about a ministry. As a result, it is likely rare that the ECFA investigations of member ministries’ activities are disclosed. ECFA policy states that, if asked, they will confirm if a review is in process, what standards are in question and what decision has been reached once a review has been completed. Recently, for example, there was no ECFA press release notifying donors of the shameful behavior of the Christian Research Institute’s (CRI) CEO in misappropriating ministry funds for personal use, because it is the ECFA’s goal to protect the reputation of its member ministries as long as a ministry is willing to work with the ECFA to correct its failings. (MinistryWatch has prepared two article relating to the Christian Research Institute’s problems: CRI and Whistleblower that we would highly recommend that donors read). Even when a ministry refuses to cooperate and is removed from the ECFA, the ECFA makes no attempt to alert donors of the removal or the reasons for the removal through a press release. Donors discovered the presence of CRI’s problems only because a ministry insider, who was later fired, went to the press as well as the ECFA with their concerns and the ECFA had to respond to press inquiries. Even then, the ECFA has recently been subjected to criticism from the ministry community for even its rather minimal comments on its ministry investigations. This attitude of seeking to hide material incriminating information from donors could be illegal in the realm of the public corporation and certainly should not be accepted in the world of public charities either. Behavior of this sort in a public corporation would likely lead to the resignation of the CEO and perhaps criminal charges. This represents a powerful incentive for corporate executives to stay on the straight and narrow path.
While it is understandable that ministries would not want their misdeeds known in public, if the ECFA is not free to alert donors to the existence and results of its investigations, donors will be misinformed, ministries will have little incentive to proactively put in place procedures to avoid such problems and the ECFA runs the risk of being viewed by donors as a toothless tiger. The ECFA’s own website says that it “Promotes integrity, honesty, and openness in the manner in which a ministry conducts its daily financial and management operations.” Withholding disturbing information from trusting donors hardly can be described as honest and open
and should be discouraged rather than encouraged by representatives of the ministry community. The notion that covering up ministry wrongdoings is in the best interests of the kingdom is flawed. Donors are the aggrieved party when ministry leaders abuse their trust and they should be informed of the problems if the redemptive process is to be truly complete. Resignations of guilty ministry executives and board members who failed in their oversight function should also be considered part of the redemptive process, even when they have acknowledged their mistakes and publicly repented. Such resignations rarely occur currently despite serious problems being uncovered. The present system utilized by the ECFA of working behind closed doors to repair the damage caused by wayward ministry leadership is fundamentally unfair to the donor and needs to be revised. Concealment of misdeeds only works to increase donor suspicions about a lack of integrity in the Christian Ministry Marketplace when word ventually leaks out about a problem, as it inevitably does in at least some cases. For instance, the damage caused to the Gospel by the skullduggery of Jim and Tammy Bakker of PTL fame, is immeasurable. Arguably, had the Christian Ministry Marketplace been more fully developed when PTL was involved in its financial shenanigans, many donors could have been spared the fraud they suffered, and the body of Christ would not have suffered the black eye it did because of the criminal activities of Jim Bakker.

No Spending Limits Required by the ECFA

The ECFA also does not require an absolute limit on the amount of money that might be spent on fundraising costs or administrative expenses. Ministries can incur exorbitant costs in either or both of these areas and still be in compliance with the ECFA’s standards. This does not provide donors with a full and accurate picture, contrary to biblical admonitions. Many, but certainly not all, of the 352 ECFA ministries in the www.MinistryWatch.com database have costs in these areas that seem fair and well within the boundary of 35% of total revenues set by the secular self-regulator, the Better Business Bureau Wise Giving Alliance. Other secular donor advocates suggest that 25% is a better figure to use for total fundraising and overhead costs. Donors can easily find these ratios at Wall Watchers’ www.MinistryWatch.com website and are able to compare various ministries on these financial measures using “The man of integrity walks securely, but he who takes crooked paths will be found out” our Interactive Table screening tool. Still, because of a lack of a limit on such spending for ECFA members, many ministries exceed the 25% and 35% limits suggested by other groups. The chart below highlights where ECFA ministries in the Wall Watchers database fall on this measure. Fully 31 (8.7%) of these 352 ECFA members exceed the 35% limit and 109 (30.9%) exceed the 25% limit. As a result, at least in this regard, donors might reasonably ask if the ECFA insignia is truly a seal that can always be trusted. Four ECFA members actually had a ratio that exceeded 50% and the two worst were above 71%! While good reasons may be found for temporarily high spending levels, which should be accommodated by any standards, this is an area where the ECFA would be wise to tighten its standards.

Source: Wallwatchers.org
ECFA requirments