In the 1970s and 80s, Bill Gothard’s Institute in Basic Life Principles’ week-long seminars filled arenas. Millions of evangelicals attended the programs, and many Christian leaders today say the events were life-changing, resulting in a first time commitment to Christ, or decisions to enter the ministry.
The seminars allowed Gothard to build an international following. In addition to the seminars, the organization created homeschool curriculums, training centers, a prison ministry, and other educational programs. But in recent years, the non-denominational ministry has seen a decline from its once-influential and well-connected source of resources and community for like-minded Christians.
At the core of this shift are numerous allegations of sexual harassment dating back decades, implicating Institute in Basic Life Principles (IBLP) founder and former president Bill Gothard. Gothard resigned in 2014 and a related lawsuit was dismissed over the statute of limitations. However, since his resignation, little has been scrutinized about his organization’s financial activities.
MinistryWatch made several attempts to reach the IBLP for an interview to discuss its financials, but the organization did not respond.
A Closer Look
The first thing one notices during an examination of the IBLP financial statements is that 2019 revenue of about $4.5 million is a third less its 2015 revenue of about $7.4 million. In 2001, the organization took in more than $41 million.
Give a gift of $25 or more to The Roys Report this month, and you will receive a copy of “Ecclesiastes and the Search for Meaning in an Upside-Down World” by Russell L. Meek. to donate, click here.
The other key data point is this: The ministry has lost tens of millions of dollars over the past decade. It lost money (expenses exceeded revenue) every year from 2011 to 2017. Total losses for those years exceeded $27 million.
Most ministries rely on donor contributions to survive, but the IBLP’s most recent Form 990 filings indicate that its contributions only take up a small portion of its revenue: 9.2% in 2018, 7% in 2017, 11.5% in 2016 and 6.7% in 2015. In none of those years did donation income exceed $1 million.
So how did the organization survive with so little donor income? IBLP generates significant income from the sale of programs and services. However, this output has fluctuated significantly in the most recent years for which its Form 990s are available. Of its total annual revenue, program services accounted for 13.8% in 2018, 83.6% in 2017, 73.2% in 2016 and 23.6% in 2015. Per its latest Form 990, the IBLP’s revenue consists of seminar fees, sales of literature and tapes, home education tuition, and training center fees.
In another abnormality, the “other revenue” lines on its Form 990s far exceeded all other funding sources in 2015 and 2018, accounting for 69.6% and 66% of its total revenue, respectively. In its 2015 Form 990, $5.1 million of its $7.4 million in revenue came from an “other revenue” line labeled “miscellaneous.” In 2018, most of the organization’s $8.5 million in revenue came from $5.1 million in a “miscellaneous” line item labeled “gain on sale of net assets.”
Historically, the IBLP once thrived on contributions. In 2001, more than half of its $41.1 million in total revenue came from direct public support, while about a third came from program services. That year, the IBLP noted that about 50 seminars were conducted, over 250,000 pieces of literature, tapes, and videos were sold, and 6,000 families received home education materials, support or education.
The following year tells a different story—its direct public support plunged from $26.1 million to $1.2 million, and its program service revenue dipped from $14.9 million to $12 million. Still, these figures reflect the ministry at its peak.
Since then, the IBLP has seen dwindling financials in both categories, shifting away from contributions and towards relying on other revenue. Based on its publicly available Form 990s since 2001, this trend started to take shape post-2005.
Unspecified Salary and Wage Expenses
The organization’s spending patterns raise even more questions. Most notably, its “other salaries and wages” category accounts for a significant amount of its expenses, despite no associated pension plan accruals and contributions or other employee benefits and payroll taxes being recorded in its recent Form 990s. In 2018, “other salaries and wages” accounted for $2.2 million of its total $6.4 million in functional expenses, yet its three highest-compensated staff members only earned $203,205 altogether.
This pattern also appears in its 2017 Form 990, when it spent $2 million on “other salaries and wages,” a sizable chunk of its $6.2 million in functional expenses, despite top staff only earning $208,375. In 2016, it spent $3.1 million on this category, out of $10.5 million in functional expenses, though its leadership only earned $222,528. And, out of its $8.6 million in functional expenses in 2015, it spent $2.5 million on “other salaries and wages” while leadership compensation totaled $217,826.
An anomaly occurred in 2014, which incidentally marked a significant shakeup for the IBLP. When victims came forward alleging sexual harassment and abuse, Gothard was placed under administrative leave and then resigned shortly thereafter.
The Form 990 for that year shows IBLP spent $2 million on compensation to “disqualified persons,” and Gothard’s name wasn’t included in the list of key employees who collectively earned $217,193. (For reference, the IRS defines a disqualified person as “any person who was in a position to exercise substantial influence over the affairs of the applicable tax-exempt organization at any time during the lookback period.”)
Unlike previous years, the “other salaries and wages” category that dominated its later spending patterns totaled $0, and it reported $125,573 in “other employee benefits” and $186,784 in “payroll taxes.”
Comparatively, Gothard earned $25,322 in 2013, far less than the other two key employees at that time. Despite the top three staff members (including Gothard) earning $157,102, the “other salaries and wages” expense accounted for $1.7 million of its $8.9 million in functional expenses for that year. Similar patterns occurred in 2012 and 2011 and 2010, despite no payroll taxes, pension plan contributions or other employee benefits being listed for those years.
Current Financials Unknown
The IBLP’s current financial status is unclear, as its post-2018 Form 990s are not publicly available. The organization’s balance sheet appears in good condition, totaling $60.8 million in assets and $1.2 million in liabilities in 2018.
Albeit not a Form 990, the IBLP has previously provided a 2019 financial statement for MinistryWatch’s database. Its 2019 data reveals similar revenue and expense patterns as covered above. Of the $4.5 million it earned that year, “total other revenue” accounted for $3.8 million, while $2.1 million came from program services and only $680,106 from contributions. “Management and general” expenses accounted for $3.1 million out of its $7.1 million in total expenses, while program services claimed $4 million.
It has since closed its distance learning education arm, Telos Institute International, but other programs remain operational, including its Advanced Training Institute home education program, International ALERT Academy youth training program, Family Conferences events, and Embassy Media library of seminars and materials.
This story was originally published at Ministry Watch.
Shannon Cuthrell is a journalist with a background covering business, technology and economic development. She has written for Business North Carolina magazine, WRAL TechWire, Charlotte Inno and EE Power, among other publications.
Related podcast: Julie Roys interviews a leading expert on “Understanding the Duggar Cult”