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

By Julie Roys
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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.

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

  1. If they are a church would they be ok with their “congregation “ not being a member of a local church body? Do they ask their “congregation “ to tithe to Focus? Do they serve communion? Baptize? So many questions, but I think we all know they are not a church.

  2. It causes me to flinch when I hear Jay Sekulow pitching his non-profits who apparently have paid him and his family
    millions.

  3. No, they aren’t churches. Yes, they should disclose executive salaries.

    Churches should also disclose salaries to their donors.

    Christian non-profits of all kinds should be MORE transparent than their secular counterparts, not less. It shouldn’t take government to compel ministries to report exactly what they do with the money they collect.

  4. If animation, Muppet’s, cafe along with a casual atmosphere is now church I believe the New Testament leadership including the Apostles will rise up and condemn this generation for being so carnal. When the Gospel is properly proclaimed people should come under conviction of sin, repent and pray. Having a play room, cafeteria, a place to socialize hardly sets the atmosphere for anything serious to take place let alone calling it church. Gone are the days of quietness and heart preparation as a way to prepare to hear God’s word. No, these are not churches, they’ve become obsessed with what they can do and provide, a cozy atmosphere where anyone can come in and never fear being intimated or upset by the proclamation of divine truth

  5. Any organisation that receives much of its income from donations, especially when people are told “give generously, this is an initiave of God’s kingdom”, should make its financial statements available to members & donors.

    Anyone who takes a huge salary from such an org – while donors are told that by contributing, they are partners in the gospel – is not acting like a partner in the gospel.

    That said, it would make more sense if par-church and non-para-church were treated the same, as I think they are in my country.

  6. My salary is posted in the newspaper every year…a church can’t be that transparent? I left my last church of 22 years when the staffing budget went up 1.7 million in 5 years and “elders” wouldn’t show me the line item staffing budget.

  7. The American version of “church” is a virtual clone of the industrial commercial enterprise. While it’s product is different it does “business” like Wall Street except for one big advantage. The American “church” is exempt from filing quarterly financial reports which are open to public scrutiny. The devil is in those darned old details, that Cash Flow Statement, that line item budget, who gets paid what, etc. Quite clearly, at least to me, Transparency is not seen as a friend. Calling these huge organizations like BGEA and Focus on the Family “churches” leaves a debris field. In their plan to shed the 990 and become “churches” they create a very suspicious debris field that has an odor to it—— it’s called “just trust us.” Problem is that “churches” are giving us more and more reason to question their motives, their finances, their salaries! Sad!! Rather than being a counter- culture that speaks to the evil of the day the Christian community has bowed to the ways of Babylon.

  8. Susan Vonder Heide

    There are two dangers with regard to salaries of people working for churches and other Christian organizations. One danger is to nitpick and make life miserable for a pastor or executive for making a little more than somebody thinks he should be making. The other danger is to pretend that it doesn’t matter if somebody receives a ridiculously bloated salary paid for by people who thought that they were contributing to Kingdom ministry.

  9. None of these are churches. BGEA & FOTF are right-wing lobbying outfits that throw a Bible verse out once in a while. We know Zacharias is supposed to be a minister but I don’t think he has a church?

    Someone mentioned Sekulow. I don’t think he is claiming to be a church. I think the figure is $60M that he’s funneled to his family from his nonprofit.

    These people are politicians, lobbyists, business people, & con artists using Christianity as a front to fleece money out of people for their own lavish lifestyles. I also wonder how much corporate support these “churches” get. No way they’re making all of their money from individual donors.

  10. This issue goes beyond the para-church organizations discussed. While the vast majority of pastors and church staff in the U.S. are probably underpaid and struggle to get by, there is a serious issue with bloated compensation to megachurch pastors and para-church CEOs. How can the CEO of a relief organization justify that salary? What happened to servant leadership taught and modeled by Jesus? Think about church leaders in China or Iran who are not compensated like this but are simply motivated to serve. The business model practiced in the Western church is broken and it’s time for believers to stand up and demand accountability. The boards of these organizations/churches are also accountable and many times there’s a tight network of friends covering for one another. I’ve heard boards and leaders make comments like “We can’t publish salaries because people wouldn’t understand.” That alone is hiding behavior, portends a lack of trust, and smacks of classism towards the “regular people” who are giving money to fund the juggernauts. Thanks to Julie and others for pursing this work and keep the pressure on!

  11. I’ve always been confused about this subject of what to pay ministry workers. Who sets the bar on what is fair for salaries for various ministry positions? Is there a standard? If so, what is it? Can someone enlighten me a bit?

    1. Here’s the keyword: disclosure.

      There can be no discussion among or decision by donors to an organization without disclosure—both of compensation and of all other spending.

      Instead, we see secret-keeping under the guise of the Gospel and using “government interference” as an excuse.

    2. @Butch – I think one very effective way to help determine salary is to look at teacher’s salaries in the same locale. These are normally published. One can compare the degrees and schooling between the pastors and teachers. Also can look up length of service, etc. A couple of caveats. Most teachers’ salaries are for 10 month and a pastor is 12 month (and always on call). A pastor, for tax purposes is also a “self-employed, employee” meaning they have to pay full Social Security (FICA) tax out of their own pocket. However, pastors are able to set aside a “parsonage” allowance which does help to offset the FICA expense. If the church chooses to pay some of the FICA tax, it must be reported as income for the pastor which is also taxed.

      Obviously, not all church are able to pay the salary scale of public school teachers to a pastor. So public school salary at least helps to put some things in perspective rather than taking a shot in the dark. There are also resources that help to recommend salaries for pastors given the size church they serve, the area, schooling, length of service, etc. The churches I have been in always publish pastor’s salary and is approved by the congregation.

      However – these organizations are not churches from a Biblical perspective. They are religious non-profits and they need to be honest about that. I’m disappointed in finding this out.

  12. Yes, Susan, well put. I am a semi-retired minister. In my last 8 years of pastoring, my compensation was about $54,000. This was for EVERYTHING, except the parsonage. So, taxes, retirement, health insurance, car, the whole shootin’ match came out of 54 grand. We never went hungry, but we didn’t get rich! BTW, I had 5 years of college and four years of seminary. The church was informed every year of my salary package. Having said all that, I quite agree, it is dangerous {and WRONG!} to pretend that it doesn’t matter if somebody receives a ridiculously bloated salary. Let’s face it– the salaries above are ridiculously bloated. They make all of our “evangelical” claims about “eternal values”, “right priorities”, “sacrifice” and “seeking first the kingdom of God” sound like a bunch of rhetoric.

  13. Thank you, Julie, for reporting on this. It is such an important topic and, I believe, an embarrassment of evangelical organizations.

  14. Focus on the Family is not a church, and BGEA and RZIM are not associations of churches. These claims are lies, deliberate deceptions that required cold collaboration and planning on the part of corrupt souls. These organizations must self-revoke the false statuses they have claimed, and Jim Daley, Franklin Graham and Ravi Zacharias must express their contrition and repentance by resigning effective immediately. No honest Christian should sit at the same table with them until they do.

  15. As a pastor I have seen the damage that this does beyond the organizations. I know that many watch how things like this are done and then they imitate. Often on a smaller scale but they imitate the evil because evil has been called good.

    They see people enriching themselves and they think – why can’t I do that?

    Smugly within the evangelical circle we used to condemn those who would say Lord, Lord and now I fear that many within our own circle will be told – depart from me for I never knew you.

    I hate what you expose – I love that you expose it. It makes me uncomfortable but I am grateful for people with the gift of discernment.

  16. Your requests of BGEA for salary disclosures sure remind me of many discussions between Prof. Throckmorton and Gospel for Asia. There were all of these promises that were never kept. Just simple lies told to get people to go away. This is a sure sign that these organizations and others like Samaritans Purse have devolved into simple scams for Mammon. I once was the idiot giving to GfA and Voice of the Martyrs. So from that perspective, I would say that it is pure foolishness to donate to any big ministry and especially the ones that have pulled this trick. GFA has also changed its status into a “Church” as well. Only fools give to anything that does not walk in the light. Hiding where the money is going is simply walking in the darkness. Very soon there is coming a significant judgment from God against this evil. It is already on the horizon…

  17. Hi, Julie. I must echo Paul Lundquist. Neither Focus on the Family nor Ravi Zacharias International Ministries, nor the BGEA are churches. I trust that God-honoring, Christ-loving men and women sit on their boards. How can they stand by this duplicitous claim to be a church? For that matter, how can their Christ-quoting leaders stand by a lie?

    1. David, what is your logical basis for assuming that “God-honoring, Christ-loving men and women sit on their boards?” Wide eyed idealism in the inherit goodness of men, like Judas, who promote Jesus for a time but do the exact opposite? These boards approved these measures. Did Jesus lie about judging by actions and fruit and not platitudes and claims to ” wanting to preach the Gospel?”

  18. Thanks for reporting that. We need that. There is lack of transparency. Also i would be curious to know if in your opinion the ministries of Kenneth Copeland, Creflo Dollar, Joyce Meyer, Osteen…are more compliant and transparent.

  19. Julie, I have been following your blog since the James MacDonald debacle. While most of your information is needed in bringing out truth, I feel lately that it’s causing a lot of discourse among believers and I would like to see more positive articles. Most seem to focus on the negative. We need unity within our body of believers, lifting up those who are truly doing the Lords work. Just an observation.

  20. We need unity around right actions, right thought. And the sinful actions of these groups needs to be exposed for what it is “CHURCH INC.” There’s no discourse where there is light!

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