Are Focus on the Family, BGEA, & RZIM Churches? And Should They Be Exempt From Reporting Salaries of Executives?

By Julie Roys

It’s listed in Wikipedia as an evangelical parachurch organization that promotes “social conservative views on public policy.” But according to its 2016 IRS application and subsequent correspondence, Focus on the Family “was established and has been historically operated as a church.” Its nearly 600 employees are both its “ministers” and its “congregation.” Its board of directors are “elders.” And the church worships in Focus’ “chapelteria”—a cafeteria that doubles as a worship space. 

For those familiar with the 43-year-old ministry, these arguments that Focus on the Family is a church may seem like a stretch. But the arguments worked. And in 2017, the IRS changed Focus on the Family’s classification from a nonprofit to a church. 

Last week, the Washington Post reported on this “new strategy” among major evangelical organizations to become classified as churches and exempt from filing form 990s, which require them to report the salaries of their highest paid employees. Two other large organizations that have recently become churches or “an association of churches” include the Billy Graham Evangelical Association (BGEA) and Ravi Zacharias International Ministries (RZIM).

Both the BGEA and RZIM have ceased publishing 990s and executive salaries since officially becoming an association of churches. Focus on the Family apparently no longer files a 990 with the government. (The last 990 posted by ProPublica for Focus on the Family was for 2015.) However, Focus has posted a 990 for 2017 on its website. And Paul Batura, vice president of communications for Focus on the Family, told me that “in the interest of transparency,” Focus will continue to make financial information public.

The evangelical organizations deny that they sought to be classified as a church or as an “association of churches” to hide salaries and other detailed financial information. The BGEA said it sought the new status to avoid the administrative costs associated with filing 990s and said the change had nothing to do with the ongoing controversy over the large salary of BGEA CEO Franklin Graham.

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Franklin Graham

In 2014, Graham made more than $880,000 as CEO of both the BGEA and Samaritan’s Purse. According to the Charlotte Observer, Graham’s 2013 salary for Samaritan’s Purse alone ($622,000) made him the highest paid CEO of any international relief agency in the U.S. at the time. (In 2018, Graham’s compensation for Samaritan’s Purse had risen to $696,193.)

When the BGEA received its new IRS classification in 2016, it promised to continue publishing Franklin Graham’s salary, but has not done so. I reached out to the BGEA more than two weeks ago, asking about this discrepancy and requesting Graham’s current salary. Media Relations Manager Mark Barber responded on January 3, letting me know that he had received my inquiry, but did not provide any of the requested information.  

I similarly reached out to Ruth Malhotra, public relations manager with RZIM. She did not give a reason for RZIM seeking to be classified by the IRS as an association of churches, but simply noted that other ministries, like the BGEA, had done likewise. I asked Malhotra for the salaries of RZIM Chairman & CEO Ravi Zacharias; his wife, Margaret Zacharias, who was listed as RZIM vice-chairman; and his daughter, Sarah Davis, who’s the new CEO of RZIM. In 2015, when the organization still filed 990s, the ministry paid Zacharias and his wife more than a half-million dollars, and his daughter more than $215,000.

Ravi & Margaret Zacharias

Malhotra responded that RZIM employs an outside consulting firm to help set the salaries of its employees and provided financial statements for 2016-2018. Malhotra did not, however, divulge the current salaries for Zacharias or any of his family members.

Focus on the Family said in its 2016 IRS application that it sought to become a church to avoid the Affordable Care Act’s mandate on insurance coverage for contraception and other regulations. More recently, however, Focus told the Washington Post that it made the change “to protect the confidentiality of its donors.” (The IRS requires nonprofits to report the names and addresses of donors giving $5,000 or more on a Schedule B form. However, organizations other than private foundations and Section 527 political organizations are allowed to redact those names and addresses when publishing their financial documents.) 

The last reported compensation for Focus on the Family CEO Jim Daley was in 2017. At that time, he was making $306,000.  Focus’ other nine executives were each making between $162,799-$233,839.

Is Claiming Church Status Ethical?

Regardless of the reasons for changing IRS status, questions remain concerning the ethics of parachurch ministries claiming to be churches. By definition, parachurch groups are designed to come alongside churches, not be a church. Yet RZIM and the BGEA have said they are not claiming to be a church, but rather “an association of churches.” (The IRS classification for churches also includes “conventions or associations of churches.”)

Initially, the IRS defined an association of churches as a “cooperative undertaking by churches of the same denomination.” But the definition has since been broadened to include “a cooperative undertaking by churches of the same or differing denominations.”

However, Focus on the Family specifically stated in its IRS application that Focus on the Family has “historically operated as a church.” Also, in a follow-up letter to the IRS, Focus’ lawyer Stuart Mendelsohn wrote that “the principal purpose or function of Focus on the Family is as a church.” He further argued that Focus “satisfies all or most” of the IRS required church characteristics.

(Interestingly, Mendelsohn serves as legal counsel to the ECFA‘s Commission on Accountability and Policy for Religious Organizations. Given that one of the ECFA’s 7 Standards is transparency, it might seem odd that an ECFA-affiliated lawyer would be helping a ministry become exempt from reporting its financial details to the IRS. Yet as I have reported extensively, the ECFA is paid by the ministries it accredits and often is nothing more than a rubber stamp for these ministries.)

When I pressed Butera about Focus on the Family claiming to be a church, he replied: “Since our inception in 1977, Focus on the Family’s ministry has included key elements of the IRS church classification, including daily devotion and Bible reading time, as well as regular chapel services.”

You can read Focus’ full arguments to the IRS in its application and complete correspondence with the IRS here. However, Dr. Wade Mullen of Capital Seminary and Graduate School recently highlighted the various arguments that Focus on the Family presented to the IRS in a series of tweets. They are an excellent synopsis, so I’ve copied them below:

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35 thoughts on “Are Focus on the Family, BGEA, & RZIM Churches? And Should They Be Exempt From Reporting Salaries of Executives?”

  1. I appreciate you bringing a spotlight into the darkness, Julie. No doubt what you are doing and promoting is something that is TRUE, is HONORABLE, is JUST, is PURE, is LOVELY, is COMMENDABLE, is EXCELLENT, and is WORTHY OF PRAISE to the Most High as you do it in His name. I have only just come to know about you as a result of RZIM developments, and you are a blessing to Christians who are willing to humbly accept that they are being misled and who have a heart to correct their ways and be shown difficult truths. I pray that your ministry in this way will be effective in bringing repentance to the Church as a whole and separating the wheat from the chaff.

    Since it is becoming harder and harder to support ministries due to their existence to earn money rather than share the Truth, could you recommend a list of organizations that are clearly operating in the shadows, or a list of those you find to be trustworthy and honest in their missions and operations? From RZIM and Moody to Samaritan’s Purse and WAYFM, I am finding it harder and harder to support causes knowing I am being a good steward of my funds.

    1. Elle,
      I don’t have a list. If I had the resources, I would love to maintain a website that evaluated and ranked ministries. In the meantime, my goal is to educate and empower donors as much as possible. When you find a ministry you think is doing good work, search online and see if the ministry publishes a 990. If it doesn’t, contact the ministry and ask for a financial statement, executive salaries, and names of board members. If they refuse to give you that information, I recommend refusing to give them your money. And if the board members and executives are all members of the same family, or have conflicts of interest, I would do likewise.

      In full disclosure, I should say that The Roys Report has not published a 990 because we’re still in the process of gaining nonprofit status. However, I did publish a financial statement for last year in which I disclose where donations were allocated and how much I took in salary/stipend. We’ll be publishing a board page soon, disclosing all our board members and giving contact information. In the meantime, if someone contacts me, I will email you names and short bios of our board members.

  2. Wycliffe Bible Translators puts their IRS 990, which they are not required to file with the government, on their website. I really respect them for that.
    I say, do not give $$ to a church that hides the pastors’ salaries and other important information from the congregation. Only support ministries which are willing to share their 990 information on their website. And who list their current Board Members there as well.
    Churches will hide information as long as they can get away with it and still receive contributions. Vote with your wallet.

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