"...When He [Jesus] saw the crowds, he had compassion for them, because they were harassed and helpless, like sheep without a shepherd." Matt 9:36

"Do not rob the poor, because he is poor... for the Lord will take up their case and plunder those who plunder them." Proverbs 22:22-23

Friday, November 19, 2010

Feds Probe Salaries at Crystal Cathedral - Bankruptcy is the Only Route to Mega Church Financial Transparency

It looks like there is one, and only one way that mega churches will be transparent with their finances and disclose salaries and tell people how the money is spent.

That is when federal bankruptcy officials demand it, so they can make sure that money that should be going to creditors, is not lining the pockets of the pastor and his friends and family.

Pretty sad, because what the federal bankruptcy court trustee is doing now, really is a function that the members of Crystal Cathedral SHOULD have been performing all along: demanding financial transparency from their church leaders to guard against nepotism, and ridiculous salaries and abusing tax advantages afforded to their church.

"A federal bankruptcy official is questioning the salaries of three employees of Orange County's Crystal Cathedral.

The Orange County Register said in a story Wednesday that the U.S. trustee filed objections in bankruptcy court questioning the need for a $132,019 housing allowance for CFO Fred Southard.

The trustee also questioned the need for a $70,000 salary for founding pastor Robert H. Schuller's daughter Gretchen Schuller Penner, who produces the church's "Hour of Power," and the $55,000 salary of her daughter Neyva Penner Klaassen, who works on the TV show.

In defense, Southard said the church ordained him as a minister and he has sometimes acted in that capacity. Cathedral attorney Marc Winthrop declined comment."

Crystal Cathedral has 9 employees making over $100,000 per year (click here to see the list), many of whom are relatives of the pastor. Earlier this week the feds objected to the salaries of three employees, including CFO (a church has a CFO?) Fred Southard's salary most of which is in the form of a housing allowance.

Now today, the feds are objecting to Southard's son-in-law being hired at $62,000 per year with $59,000 of it coming in the form of a housing allowance!

How can this be? Giving someone all of their salary in the form of a tax exempt housing allowance? How much longer will the federal government allow these types of shenanigans going on in churches, knowing they have operate with little transparency to their donors?

All of this is more proof that God does work all things together for good....the good of this mess is we're getting to see a glimpse of what the mega churches are working so hard to hide from their members.

37 comments:

Anonymous said...

The Dilemma of the Unemployed Pastor
Les Peryear

http://lesliepuryear.blogspot.com/

I guess this means that I am never going to get the answer that he promised about his view on the tithe.

I waited patiently for 6 months.

He seems to be advocating some of the very same issues that many who read this blog have been posting about. Hmmmmmmmm

It was my understanding that things like this didn't happen to people who are faithful in the tithe.

WishIhadknown said...

“It was my understanding that things like this didn't happen to people who are faithful in the tithe.”

No, I think it was more like I have never seen a tither go bankrupt or something along those lines. It’s amazing what you can overlook when you’re not looking.

The sad thing is these people are at a low point in their lives and really need the support of their pastor. But, since they are no longer able to give as they have in the past, the pastor no longer sees them. Therefore the preacher is able to say, “I have never seen……”

I know this because I have lived it.

Kenneth said...

WD,

I understand if you are against the nepotism. However, there is nothing wrong or illegal about a minister taking most of their salary as a housing allowance. As long as they can prove they have that much housing expense. There are a few rules of thumb on figuring a housing allowance but basically it's the fair market rental value of your home, fully furnished and maintained.


It is tax free from federal and state taxes but the minister has to pay both sides ( employer and employee) of Social Security which comes out to a little over 15%.

Also, did you check about the salary scale among ministers in California? Were these salaries high in comparison?

Tell it like it is said...

You can bet your life that the same kind of underhanded monetary shennanigans are going at FBCJ.

You have at FBCJ a man(Mac),and men who have repeatedly demonstrated the contents of their hearts,by the underhanded way inwhich they treated Dr.Dog and his wife.
The public statements concerning what he thinks of Dr.Dogs mental state.
The use and misuse of money,and the lack of transparency.
The land gift for the right to advertise during church service(that one alone is reprehensible).

The verbal temper tantrums concerning giving.

This nonsence about telling the sandhedrin counsil,I mean the inquisition,err the discipline committee,no the deacons,not to bother WD and they went against his wishes,yeah right.
Anyboby remember the movie a Few good men;"WHO ORDERED THE CODE RED"!

By Mac's own repeated actions,or lack of,continues to reveal a man with a dark heart

Anonymous said...

Are these salaries after the family members took a 50% pay cut or before?
HM

WishIhadknown said...

“….the minister has to pay both sides ( employer and employee) of Social Security which comes out to a little over 15%.”

As in all things taxes, it is not quite that simple. Half of the approximate 15.3% is deductible when computing adjusted gross income, unless, of course, the minister has opted out of social security in which case the housing allowance is most likely not taxed. In addition, employers factor in OASDI and Medicare when determining salaries. I know I get a nice letter each year from my employer detailing my fringe benefits.

Long Time FBC Jax Member said...

Dr. Dog -

Thanks for following up on this. I think we're seeing the first wave of a Tsunami for the Mega churches. I have to think that having the Feds come in and not only question salaries / benefits, but to PUBLISH them was a consequence perhaps the Schullers hadn't considered.

I believe other Megas will think twice before declaring bankruptcy, or else they'll make sure their salaries / benefits look acceptable on paper.

It will be interesting to see what else the Feds find as this investigation continues. As always, many blessings to you and your family, especially now at Thanksgiving.

Anonymous said...

"You can bet your life that the same kind of underhanded monetary shennanigans are going at FBCJ."

These things cannot go on at a SBC "mega" church as WD and other like to call them. Did WD tell everyone that he too attends a "mega" church as they are defined?

If you say it goes on at FBCJ, it also goes on at WBCJ and other "mega" churches aroung the country. By the way a "mega" chucrch by definition is any church who claims they have more than 25oo members. Why you ask, SBC churches at least have numerous committee or trustee members who monitor what goes on.

Schulers church is a "mega" church but is privately started and to some degree is private owned in a sense. I am really shocked at how low the salaries are, even if they are after the 50% reduction. I would have expected the salaries to be like Franklin Graham and others pushing or exceeding the million dollar range. I have lots of friends in California who could not survive on such meager salaries.

Since WD and other are feel so strong about this subject, should not true transparency start with their own place of worship? Should not these and others post for all the world to see their churches "detailed" budgets online for all of us to see? Should anyone who attends a SBC church either get them to throwout the SBC Beliefs and Doctrine since it promotes tithing?

Should they not be like Leslie Puryear and do like he so bravely and faithfully has done?

BTW Longtime FBC JAX Memeber, if you truly are that, why don't you tell them about FBCJ being debt free since 1943? Why don't you tell everyone that FBCJ does not go into debt? Why not tell everyone that the only way FBCJ could ever have to file bankruptcy is if the church went into debt and did not pay the bills like the Crystal Cathedral?

Why not tell everyone that the majority of SBC and IBC churches in northeast Florida have long term debt and are in financial bondage?

Anon: "The land gift for the right to advertise during church service(that one alone is reprehensible)." That is WD's interpretation of it. That is not the reality but what he says it is. The jist of the story was that these guys do the same thing that Chick Fil A does and does not work on Sunday. Is that a bad thing.

We are all such hypocrites in this regard. We cry and moan about commerce on Sunday, and yet if our favorite eating or entertainment place closes on Sunday we can't stand it.

Again, just asking the questions to find out why the things I mentioned are not disclosed, etc.

Lynn said...

If I'm understanding correctly, the housing allowance is lopped off and not counted as income. This makes your income much lower and could qualify you for other things-like the Earned Income Credit. Is this correct?

William said...

The housing allowance is the only tax break clergy get. The amount of the allowance has to be justified according to IRS rules. Rick Warren litigated this some years ago and won. It is not illegal to receive most, even all, of your pay in the form of the housing allowance.

Clergy pay the full 15.3% SS & Medicare tax. A portion of that is deductible and lowers one's income tax. The reduction in income tax is not significant relative to the 15.3% tax.

The average SBC pastor gets killed on SS tax every year. Income tax is not nearly as costly.

John H said...

Lynn,

Last time I did my taxes, when I was filing as a minister, I had to add housing allowance back in for the figuring of the Earned Income Credit. It's not taxed, but if you file correctly, it is figured in for the EIC.

I can't remember if the cost of med insurance was too, because I pay it, though I recognize that my salary is higher to cover that expense.


As to determining what you take, if you're only taking $3000 for non-housing, you're claiming that's what any non-housing expense is for you. Food, cars, entertainment, clothing, everything. Housing allowance is supposed to cover strictly the costs of your housing: rent, utilities, repairs. About the only way you can claim the vast majority of your salary that way is if you're bi-vocational and have another job. I did this when I was a bi-vo pastor, and took all of my $10,000 as a housing allowance, because 1.)it was legit and 2.)I had another job that paid the rest of the bills.

That someone can concoct a 6-digit housing allowance is somewhat puzzling, and a 75% or more of salary one is beyond proper for a full-time person.

Coming from someone who benefits from that tax rule, the loophole needs some tightening, because it's obviously being abused.

FBC Jax Watchdog said...

Wow, anon, thanks for disclosing those formerly undisclosed things.

I'll help you with the disclosure.

Not that it matters all that much, anon, but mega church is defined by churches that have 2000 in attendance in a given week. It matters not the "membership", we all know that.

So no, officially, I am not a member of and do not attend a "mega church".

I agree with you on the salaries at CC. Seems pretty low. Would like to know what they WERE before the financial difficulties.

Transparency does not mean "posting complete budgets on the Internet", but I sure would like to see that. I think that would be good. The BGCT, a Texas state convention, has posted their complete, detailed line by line budget on the Internet. Why not a church?

Yes, FBC Jax has been debt free. Question: is there a mechanism by which the church members would know if they were NOT debt free any longer? And being debt free doesn't mean money is being spent wisely. The only point with CC is that sadly transparency will ONLY come after the court demands it as they intervene and look out for the rights of creditors.

It is not my "interpretation" of the land gift as you say. The Brunsons accepted a $300,000 land gift just weeks after arriving, and then in the middle of one of his sermons he showed a professionally done "testimony" of the business of the man who donated the $300,000 land gift. Right as he was describing Jesus suffering in the garden of Gesthemane, he said, "watch this"...and played it. I've said that it looks to me like "quid pro quo"....looks like it to me.

John H said...

One of the issues of the land gift is just this, folks: the interpretation.

Anon says "it was just a gift."

Dog says "seems like quid pro quo."

This is exactly why it shouldn't have happened. At this point, it compromises the integrity and credibility of both the pastor and the businessman involved (or, well, already has.)

This is why you have to be very careful about everything you accept in a church as a pastor, down to the package of deer meat (I'm in a bit of a redneck world, and I love it.) Openness, transparency, and admitting you got the gift go along way. So does some good self-deprecating humor, like observing that you're not sure if the deacons are out to poison you by giving you food....

Anyway, I digress. Ministers need to be honest about it, and be cautious about allowing it to influence them and their actions. Especially the sermon. If we're going to claim to be presenting God's truth, it better have no taint of our own ego or pay-to-play in it. Leave those things for college football.

FBC Jax Watchdog said...

correction: meant to say "the sons of the man" who gave the $300,000 land gift.

And John H, yes, I agree. Disclosure. That was what I called for on the blog back in 2008. Explanation of it, and explaining why it was not being hypocritical to accept the gift, and to "live in an executive home" when his own book tells pastors that it may not be wise to do that. Instead, all the congregation got was a defiant "last time I checked, the governmetn says I can live anywhere I want"...and "let me tell you something, I am paying for that house..." with no mention of the land gift.

The day will come that 501(c)3 religious organizations will have to provide a minimum level of financial information to all donors as a condition to enjoying their 501(c)3 tax benefits. Situations like CC will perhaps help make that a reality.

Long Time FBC Jax Member said...

Anon November 20, 2010, 5:31 said:

" BTW Longtime FBC JAX Memeber, if you truly are that, why don't you tell them about FBCJ being debt free since 1943? Why don't you tell everyone that FBCJ does not go into debt? Why not tell everyone that the only way FBCJ could ever have to file bankruptcy is if the church went into debt and did not pay the bills like the Crystal Cathedral? "

-------------------------------------------------------------------------
Just for the record, I have been a faithful FBCJ member for
over 20 years. During that time, the only Pastor to ever threaten the congregation with going into debt was Mac Brunson. I agree with WD that there should be mandatory disclosure to the ENTIRE congregation if debt is incurred . Not just some back room deal with Mac and a few close Trustees. But hey, on the bright side, if FBCJ ever does find itself in a bankruptcy situation, they can get help from Judge A.C. Soud. Deacon. Trustee. Currently presiding over Jacksonville's foreclosure "rocket docket."

Anonymous said...

Watchdog: To answer your question regarding a church being debt free. A financial firm that lends funds to a church will place an encumbrance on the property owned by the church and file same with the courthouse. When the debt is paid the encumbrance is removed whereby it can be borrowed again if need be. Its like a mortgage lein or an automobile lein and can be reviewed at any time by any citizen. It may in some cases be reviewed on line.

Anonymous said...

Churches today are becoming more and more like the world...entertainment centers. Some even offer soft drinks, popcorn, ice cream, and candy bars. Its hip to be on the so called "cutting edge". Personally, I had rather stay home and watch an old movie as I enjoy real acting and not someone playing a part that doesn't do justice to the real meaning of Christianity.

Anonymous said...

How are you "sure" FBC is operated with financial "shnanigans?" "Thou shalt not bear false witness." Let's see who is all about integrity.

Long Time FBC Jax Member said...

Anon November 20, 2010, 10:08 said...

How are you "sure" FBC is operated with financial "shnanigans?" "Thou shalt not bear false witness." Let's see who is all about integrity.

-------------------------------------------------------------

We'll see who is about integrity when the entire FBCJ budget is published, including all pastor salaries / allowances / honoraria, verified by an outside accounting firm, and published for the ENTIRE congregation to view.
Come on, Mac ! You can do better than this !!

Anonymous said...

"How are you "sure" FBC is operated with financial "shnanigans?" "Thou shalt not bear false witness." Let's see who is all about integrity."
@@@@@@@@@@@@@@@@@@@@@@@@@@@@@

Anon 10:08 . . .if only you knew how many of (we)
former members have had the decency to hold our tongue on "shnanigans" on several issues that have gone on in this church, you would praise us for having integrity for not sharing the dirty laundry. Thus far I have not read anything I find "bearing false witness."

Anon 12:26 . . .great answer!

WishIhadknown said...

"The average SBC pastor gets killed on SS tax every year. Income tax is not nearly as costly."

So do the rest of us! It's just withheld on all we make. There are no schedule C ductions for us. We basically pay the same 15.3%, it just doesn't show on our pay checks.

WishIhadknown said...

And another tidbit you are leaving out is not only is the housing allowance not subject to income tax but deductible housing expenses like real estate taxes and mortgage interest are deductible as itemized expenses.

WishIhadknown said...

Anon says "it was just a gift."

I’ll tell you like my Daddy told me, “Son, there’s no such thing as a free lunch.”

Anonymous said...

Housing allowances for ministers have special tax advantages that is not available to teachers, nurses, janitors - yup, those folks cleaning up after us from the commode to the class - and everyone else.

If we want to advantage certain classes of people and shield them from tax liability, why don't we collectively choose the occupations that help most people, that we need as a society for our well being.

I dare say the occupation of minister would be at the bottom of my list. We can all get by without another minister but we need nurses, etc, more.

Teachers would at the top.

Anonymous said...

You are correct that the housing allowance is a double tax break. It is the law and it is perfectly legal to take advantage of it. Blame the messy tax system we have.

Some years ago, congress was about to pull this tax break away from clergy but backed off because the same break is available to some other occupations, mainly military.

If congress wipes out all deductions and breaks, I'll be happy to go along. But I don't feel the least bit guilty for following the laws that we have.

William

Anonymous said...

How are you "sure" FBC is operated with financial "shnanigans?" "Thou shalt not bear false witness." Let's see who is all about integrity.

November 20, 2010 10:08 AM

Show up Monday morning and ask, as a member, for a detailed budget. See what happens. If you are not sure what a detailed budget is, get educated before you ask.

If you are asked why you want to see one, simply say as a member you want to see it.

Every church worth it's name should provide a detailed budget at least once a year to the entire membership. We are supposed to be known for our belief in the Holy Priesthood.

People have no clue how mega's spend their money. They would be shocked if they knew.

But they love it when the pew warmers say things like this:

"How are you "sure" FBC is operated with financial "shnanigans?" "Thou shalt not bear false witness."

You cannot prove something you have no facts about. That is why they don't share the detailed budget. So, easier to accuse folks of false witness than have total transparency. And as you can see, it works for many. The people start viewing asking for a detailed budget as a sin. Pretty clever, eh?

Matt

Anonymous said...

It is not uncommon or illegal for housing allowance to be a high percentage of total compensation. You just have to be able to prove the expenses are eligible.

Isn't it sad that people are more concerned about what Robert Schuller and his family are paid than the kind of "self help, power of positive thinking watered down gospel" that he has preached for over 40 years now?

Because we're not concerned about the Gospel, we're just looking for as many examples as we can find to attack Mac Brunson.

This simply boils down to two egos: Brunson vs. WD.

Anonymous said...

Anon 7:58. Watchdog puts facts out and you cannot seem to read them without bringing in ego. Everyone has ego so what? We each like some personalities and dislike others, so what? Life is and always will be about personality whether you or I or anyone cares one bit.

Anonymous said...

When abusive transparency is exposed the forgiven sinners rejoice but the others seem to justify the deeds

Anonymous said...

All the reasons for the Fair Tax!

Anonymous said...

"Isn't it sad that people are more concerned about what Robert Schuller and his family are paid than the kind of "self help, power of positive thinking watered down gospel" that he has preached for over 40 years now?"

The "salaries" are part of the
"self help", 'we are special people and deserve it', theology. Why can't you recognize it at FBCJax?

Anonymous said...

"Because we're not concerned about the Gospel, we're just looking for as many examples as we can find to attack Mac Brunson."

Why doesn't Brunson model the Gospel with his lifestyle? Instead, he uses OC legalism to beat folks over head to get more money out of them. Why is that?

Follow Christ not some human with a title.

New BBC Open Forum said...

... if only you knew how many of (we) former members have had the decency to hold our tongue on "shnanigans" on several issues that have gone on in this church, you would praise us for having integrity for not sharing the dirty laundry.

This. This is what I don't understand and will never understand. I understand the aspect of self-preservation, whether perceived or real, but never the ability to conscientiously look at one's reflection in the mirror every morning while hiding evidence of wrongdoing.

If just one-tenth of the things I've heard about some in the administration of Bellevue alone is true, there are people on (or formerly on) staff who should be sitting in prison right now. I imagine the same is true of FBC Jax and Matt's former church and other churches, not just megachurches.

Stories of the legal system making things quietly go away, "off the record" and behind closed doors. People claim to have kept or obtained incriminating "files" but can't seem to put their finger on them now. Seriously? Something that sensitive and you "misplace" it?

Others say they just don't want to think about it anymore because it's all "too painful" to deal with and they want to move on with their lives.

So, it's "under the blood," under the table, and under the rug which is exactly what the goons and charlatans are counting on.

Now, I have no way of knowing how much of what I've heard is true. I would never repeat any of it as fact. Some I wouldn't repeat at all. But the point is, the people claiming to have firsthand knowledge and "proof" are the same people who've zipped their lips, at least publicly, and slunk off into the sunset, leaving everyone else to "deal with it." I've complete faith that God will eventually "deal with it," but I don't believe God expects us to just sit on our hands and do nothing. The same people who are advising the sheeple to have "accountability partners" don't want to be accountable to anyone themselves.

One former staff pastor, a man who by most accounts has integrity and speaks the truth, is reported to have been going around for the past few years claiming, "I have enough information in my possession to bring down that church tomorrow." It's not my desire to see the church "brought down," but it would be nice to see the corruption cleaned out. Yet we've seen no evidence that this is happening. The people with information either stay and continue to be part of the problem, or they leave and gossip.

So I say once and for all, put up or shut up. "Integrity" isn't defined "holding your tongue" or looking the other direction when you witness wrongdoing. Consider that perhaps God chose to give you a "word of knowledge" about those "shenanigans" so you could be an instrument for change.

Bob said...

New BBC open forum said:

Now, I have no way of knowing how much of what I've heard is true.

__________________________________

Truer words have never been spoken on this blog.

Anonymous said...

"... if only you knew how many of (we) former members have had the decency to hold our tongue on "shnanigans" on several issues that have gone on in this church, you would praise us for having integrity for not sharing the dirty laundry."

You are PROUD of enabling sin?

New BBC Open Forum said...

Thank you, anon 4:03 for summing up in one succinct sentence what I took much more space to say!

Anonymous said...

"I think it was more like I have never seen a tither go bankrupt or something along those lines. It’s amazing what you can overlook when you’re not looking."

It goes further than that. The tithe is kind of like a lucky rabbit's foot for the Christian. Look at this quote from the next thread.

"I am going to FBC this AM and I hope Mac preaches on Tithing. I have a smile on my face and my Bible in my hand and my Tithe in my pocket. I will be blessed by it!
I bet my Frig doesn't break down this week. I bet I don't get a flat tire. I bet I don't get a cold.
How about you?"