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Former Elders Say ECFA Ignored Their Warning Six Years Ago About Harvest’s Lack of Financial Controls

By Julie Roys
Image processed by CodeCarvings Piczard ### FREE Community Edition ### on 2019-03-16 15:05:52Z | |

Last week, the Evangelical Council for Financial Accountability (ECFA) terminated Harvest Bible Chapel’s membership in its organization for “significant violations” of ECFA standards. Yet three former Harvest elders say they warned ECFA President Dan Busby of serious financial and governance issues at the church six years ago. But they say instead of investigating Harvest, Busby dismissed their concerns, and continued to allow Harvest to use the ECFA seal to tout its alleged financial integrity.

The ECFA said in a statement last Wednesday that it removed Harvest because the Chicago-area megachurch failed to comply with standards concerning governance, financial oversight, compliance with laws, and compensation-setting. The group added that Harvest had withheld “crucial” information during an on-site visit and said “restoration to full membership was not a viable option.”

Yet former elders— Scott Phelps, Barry Slabaugh, and Dan Marquardt—said they called Busby in December 2013 and told him that as elders, they were not allowed to know the salary of Harvest’s now-fired senior pastor, James MacDonald. Marquardt said he even told Busby that MacDonald had once remarked that he would “lose a thousand sheep” before he’d divulge his salary.

Pie chart Harvest gave elders in 2013 before they approved budget.

The former elders said they also informed Busby that the elder board was not allowed to see a line-item budget for the church. Instead, the three said the board was given a pie chart of Harvest’s $30-million budget, and then were expected to approve the budget based on it.

The phone call with Busby took place about three months after the ECFA first accredited Harvest. And just two weeks prior to that accreditation, Harvest publicly excommunicated Phelps and Slabaugh, and indirectly censured Marquardt. The three say the excommunication came after they confronted MacDonald for character issues and complained about some of the same financial and transparency issues they shared with Busby.

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The three said Busby seemed disinterested and unfazed by what they told him. They said Busby remarked that churches have different ways of determining compensation, and that the process of setting and approving compensation was outside the “purview” of what ECFA analyzes and approves.

I reached out to Busby and the ECFA by phone and email for comment, but they did not respond. However, posted on the ECFA website is a six-step process for compensation-setting that requires that an organization’s board “determine its role in affirming, ratifying, or otherwise approving the total compensation package” of the top leader.  

Phelps said he pushed back on Busby’s response during the phone call, citing a letter that the church had received from Capin Crouse, the company that audits Harvest annually. The letter noted that the IRS can “impose excise taxes and other penalties” on board members if its executives are “over-compensated.”

Phelps said he asked Busby: “How can we be legally liable and not be able to even know the information that we’re liable for? You’re okay with that?” Phelps said Busby just kept responding that how compensation is set is outside the “purview” of ECFA approval.

Phelps, Slabaugh, and Marquardt said they also expressed dismay to Busby that the ECFA had accredited Harvest soon after their excommunication. That excommunication sent shock waves through the Chicago Christian community, and Harvest later apologized for its harsh discipline of the men.

[pullquote]“That was the whole point—that in the midst of all this, of us listing the problems with the finances—(ECFA) gave their approval. How can an excommunication happen in the midst of an ECFA review without them knowing about it and them investigating it a bit?”[/pullquote]Marquardt said he urged Busby to read his resignation letter, which had been posted to The Elephant’s Debt, a blog critical of Harvest, shortly before the excommunication. In it, Marquardt wrote that Harvest is not “elder-led” as it claimed, but instead was led by MacDonald and four of his subordinates.

Marquardt noted that decisions by MacDonald and staff were often announced to the elder board, rather than brought to the board for approval. And when the board was asked to decide an issue like the budget, it acted as nothing more than a rubber stamp. “We approved a $30,000,000 budget with a pie chart in thirty seconds,” Marquardt wrote.

Marquardt said Busby indicated that he hadn’t read Marquardt’s letter. And all three former elders said Busby expressed little concern about the excommunication.

“That was the whole point—that in the midst of all this, of us listing the problems with the finances—(ECFA) gave their approval,” Phelps said. “How can an excommunication happen in the midst of an ECFA review without them knowing about it and them investigating it a bit?”

 “I felt there was very little credence, acknowledgement, and certainly no concern of all the issues we had brought to (Busby’s) attention,” Marquardt said.

 “There was just a lot of dismissing,” Slabaugh added. “To (Busby), it seemed to be a non-starter—any of our concerns.”

Phelps, Slabaugh, and Marquardt said Harvest used ECFA’s accreditation, on the heels of their excommunication, to discredit the three men and their concerns.  In its September 2013 Elder Update, Harvest wrote: “This third-party accreditation establishes with finality the immense integrity undergirding all financial matters at Harvest Bible Chapel.”

Similarly, ECFA’s statement announcing Harvest’s accreditation said: “By meeting the stringent criteria ECFA applies to all applicants, this communicates to supporters of the church and the public that Harvest Bible Chapel . . . meets the highest standards of financial ethics, stewardship and accountability.” The ECFA statement also included a quote by MacDonald, claiming that the church was “above reproach in all our financial dealings” and that people can give “knowing their gift will be leveraged for the highest and most Christ-honoring kingdom purposes.”

MacDonald Called Powerful Friends to Influence ECFA

These latest revelations raise questions about ECFA’s accreditation process. Harvest is the only member ECFA has suspended in the past two years. And the last organization ECFA terminated was Gospel for Asia, but only after journalists and bloggers began reporting about alleged financial abuses. (Gospel for Asia recently settled a class-action lawsuit by agreeing to give donors a $37 million refund.)

Also, as I reported earlier, I reached out to Busby in November with concerns about Harvest, mentioning specific items, like the existence of a “black budget.” But it wasn’t until March when I reported on MacDonald’s church-funded, lavish expenditures that the ECFA finally suspended Harvest. The ECFA actually ousted Harvest on the same day that I reported that MacDonald’s compensation was nearly $1 million in 2018, and that MacDonald had an annual discretionary fund of $800,000 to $1.2 million. 

The ECFA is a member-supported organization, and each of ECFA’s member organizations pay a fee for accreditation. The fee amount is based on the organization’s annual budget. According to ECFA’s fee schedule posted online, a church of Harvest’s size would pay more than $10,000 annually for ECFA’s stamp of approval.

Yet with Harvest there may have been other incentives, as well.

When Harvest decided to apply for membership in ECFA in 2013, MacDonald and former Harvest CFO Fred Adams reached out to several of their powerful friends within the evangelical community to influence the ECFA.

[pullquote]”Adams said Holbrook texted back within 45 minutes, saying he had already called Busby to commend the church and to tell Busby how financially strong the church was. At the time, Harvest was more than $56 million in debt. . . “[/pullquote]MacDonald and Adams openly talked about this process at a church members’ meeting on September 4, 2013—the Wednesday before Phelps, Slabaugh, and Marquardt’s excommunication. Phelps sent me a transcript of this meeting, which he said he had made from a video of the event. I sent the transcript to former elder, Dan George, who had attended the meeting, and confirmed the transcript’s authenticity.

At the meeting, Adams said he texted Mark Holbrook—who was president of the Evangelical Christian Credit Union (ECCU) at the time and former chairman of the ECFA board—and asked Holbrook if he’d write a letter of recommendation for Harvest to the ECFA. Adams said Holbrook texted back within 45 minutes, saying he had already called Busby to commend the church and to tell Busby how financially strong the church was.

At the time, Harvest was more than $56 million in debt and ECCU held the bulk of that debt. I reached out to Holbrook for comment, but he did not respond.

Similarly, MacDonald said at the meeting that he had called some “really good friends” of his, who were leaders of some of the 15 largest churches in the country and got them to send letters of recommendation to the ECFA, as well.

MacDonald also said that O.S. Hawkins, CEO of GuideStone Financial Resources of the Southern Baptist Convention, called the ECFA to recommend Harvest. MacDonald said Hawkins assured ECFA that Harvest was already ECFA compliant, but said Hawkins added that if they’re off “even like 5%” MacDonald would fix it.

I contacted Hawkins for comment, but he did not respond.

MacDonald said he also reached out to Wayne Pederson—former VP of Moody Radio and former president of Reach Beyond—because he noticed that Pederson was serving on the ECFA board. (Pederson currently is ECFA board treasurer.)

According to MacDonald, Pederson said that before MacDonald’s call, he wasn’t sure if he was going to attend the ECFA board meeting at the end of the month. But as a result of the call, Pederson said he would fly to Washington specifically to endorse Harvest Bible Chapel for full ECFA accreditation.

I reached out to Pederson for comment, but he did not respond.

MacDonald concluded that by the end of the month, “I believe we’ll have that seal of approval.”

He was correct.



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45 Responses

    1. Agreed, ECFA seal now means nothing, which is a shame, since it once did. Either ECFA fix it’s processes, or it should cease to exist, rather than collect money from organizations for a meaningless seal and mislead givers. If Harvest can fool ECFA, so can others, and probably are.

      Any improvements for ECFA should start with the following:
      1. Only consider certifying organizations that file an IRS 990 (churches can, but are not required).
      2. Only consider certifying organizations that have a current audit (accounting industry surely has guidelines for that).
      3. Talk directly with auditors about audit findings, NOT read a summary from the organization.
      4. NOT accept letters of recommendation, unless specifically requested by ECFA.
      5. In the case of churches, talk directly with elders and/or congregation members, NOT only hear input from leadership.
      6. Actually read governing documents of the organization, and ask questions of more than just leadership to determine true governance of the organization.
      7. Perhaps most importantly, change leadership of ECFA itself. Member organizations will have to take the lead or change will not happen.

      – Greg

      1. 7 points are you kidding Greg? LOL That would be actual work and we can’t have that can we?
        ECFA is to busy for that, they have people to see, places to go and wickedness on every side to encourage and invite to steal , kill and destroy………

      2. ECFA should improve its process or be sure that donors understand the limitations of it’s accreditation. ECFA requires letters of recommendation to apply for membership. ECFA relies primarily on the audit, as the members most often would not be required to have an annual audit otherwise (due to religious exemptions). So membership does add the audit to a ministry’s financial credibility.
        The auditors cannot discuss audit findings with anyone but the client according to professional rules. Even if the client approves such communication, the auditor is limited by professional rules on what they can disclose. If the concern was not reportable in the audit or management comment letter, then the auditor probably cannot saying anything due to legal liability and professional rules.

        1. Not quite sure I agree with your statements regarding the audit information. I have been looking around several ministry sites, and find that some fill out and publish 990 forms even if not required to file them with IRS.
          This example: lists the 990 AND financial statement with auditor report. Several ministries do this, and some do not, some even state they are not required to fill out 990, but do so in the interest of transparency. These are worthy of our support, whether ECFA seal or not.

          The salaries of leaders of some ministries are rather eye popping, many in the $200K to $300k range (and more).

          Speaking of salary, the current 990 for ECFA lists Dan Busby making nearly $300K.

          – Greg

    1. The pie chart is pathetic. Our church gives the congregation more than that at the annual meeting when we vote on the budget, the board gets a much more detailed version before they approve a recommendation to the congregation on budget.

  1. Time for Dan Busby to proceed down “the Walk of Shame”; resign or be fired. He allowed this corruption and deceit to continue for six more years while the congregation believed that all was OK. Any criminal lawsuits brought against JMac should also be brought against Busby and the ECFA.

  2. The mega-evangelical money machine is a fear of man infested, musty mild smell of abuse, bride bilking, black budget hiding, corporate multi site ecclesiology protecting, disqualified preacher championing, almost good with all greed, naive loaded donor adoring, my brand promoting, two tongued Christianity.

  3. In my opinion… ECFA is a useless, problematic, vanity non-profit. It exists to “serve” a contrived, bogus need in the church… and it collects a lot of money to do so.

    As far as I know, the New Testament doesn’t ever mention the spiritual gift of “paid endorser” of ministries.

    But the ECFA has convinced many Christians and churches that they need a toothless watchdog to look out for them, not divulging the fact that the watchdog loves belly rubs from robbers, and yummy treats from thieves.

  4. ECFA is a racket. What we’re seeing from this organization & how it operates is worse than Chicago machine politics.

    Shut it down.

  5. Went to the ECFA website just now. Links to “Our team, Board of directors, and Board of reference all said, “the requested page was not found” Coincidence or deliberate?

    1. Just tried as well. None of the links to the board of directors, team or board of reference work. They’ve definitely brought it down. Shocking how corrupt all these men are. Sorry I ever attended HBC. Will never give anywhere again.

      1. Perhaps this is just an angry moment, but if you are a follower of Christ, we are instructed to invest in His kingdom work. There are many faithful churches and ministries who are seeking to build His Kingdom and not their own. Certainly important to do due diligence with ministries, churches and religious organizations. The investments into God’s Kingdom are the only investments that have eternal value. I don’t believe your giving to Harvest in the past was wasted. There are many stories of individuals who came to faith and grew in the Lord, in spite of the sins of the leadership. However, from what I read, probably wise to make your kingdom investment in other ministries and churches where there is transparency. HBC needs new leadership which is trustworthy. Though a painful and tragic situation, it really appears that God is cleansing HBC leadership and we should thank Him for that. He will not be mocked. May God encourage you.

        1. Don, it sounds like your heart is in the right place ….unfortunately we as believers are not called to build HIS Kingdom, we’re called to MAKE DICSIPLES, God is going to BRING His Kingdom when Christ returns…our Job Here is to Feed His sheep and build up the Body of Christ by teaching His word and having Fellowship with other Believers baptizing them and teaching them to obey His commands….That doesn’t cost millions of dollars. We are not called to entertain goats or to “Do CHURCH”for the unsaved…which does cost millions of dollars and bares very little lasting fruit… I believe we as believers must reexamine what The Church really looks like and how does it function….instead of money most Believers should invest themselves into The Kingdom and Count the COST of Discipleship….me included.

          1. Hi Dan , I really appreciate where you have come from and where you are going, better is the end of a matter than the beginning thereof!
            In adding a little to your comments I have recently found out after 35 years that God our Father ABSOLUTELY DOES NOT NEED OUR MONEY PERIOD, could you imagine the $bucks$ not needed if we were all meeting and ministering to one another in our homes like HE SAID TO DO! Could you imagine loving one another and meeting one another’s needs as well as each and everyone having an opportunity to add, encourage and exhort…… now that is TRUE BIBLICAL CHURCH. And think about how no one is fleeced of $42 million or more Yikes!
            No big names , no false images, no fancy anything, no titles , no worldly crap, just a love of the truth and loving Him by keeping His commandments.
            THE REST IS ALL THE ENEMY’S PLAN OF DECEPTION TO STEAL YOUR FAITH, KILL YOUR JOY and DESTROY EVERYONE’S SOUL FOREVER THROUGH DISOBEDIENCE TO GOD’S WORD…….. for example He said to come out of the system and be separate because one can not serve GOD and the mammon system , but hey He did say that very few will find eternal life and very few seem to believe it… Hey that makes it true doesn’t it?

          2. Dan, I appreciate that you feel my heart is in the right place, what is even more important to me is that I am biblically aligned to the best of my ability. I’m not sure what you mean by stating that as believers “we are not called to build His kingdom…” and then later in the response stated that “most Believers should invest themselves into the The Kingdom….” I would recommend Alva J. McClain’s book – The Greatness of the Kingdom which is considered to be foundational and classic work on the Kingdom of God. Jesus Himself of course indicated that we are to “seek first, God’s Kingdom and all the rest would be added” (Matt. 6:33). Anyway, that is an aside.

            Tragically, because of the sinfulness of souls, we can take great privilege that has been granted to serve God and turn it into entitlement. I recently read through the OT story of God’s judgment on the sons of Eli – Hophni and Phineas because they had turned their privilege of serving God in the priesthood, into an entitlement situation and God took their lives. God didn’t do away with the priesthood at that point, but the call was to return to the understanding of the privilege of serving God as priests before Him. Yet there was still the tendency of the human heart to go astray. Makes me pause and wonder if that isn’t what has happened at Harvest with James MacDonald. God has removed him from a position because took a privileged position and turned into entitlement.

            I see in the New Testament that God has instituted pastors (undershepherds – 1 Pet. 5) who are to tend His flock. Instruction is given on how to do that. Unfortunately as we read through even the early history of the church, there were those who wanted to use religion as a means of monetary gain. We even get our word “simony” from Simon Magus in the NT who wanted to make money off of Christianity. Paul did tent-making at times to support himself, but he also received funds from followers of Jesus so that he could devote himself to full time engagement in ministry. I think the best understanding of 1 Timothy 5:17-18 is that the pastor / elder who invests time in preparation for preaching and teaching is to receive honor and financial support. It does not mean that they should make a lot more than others. Certainly verse 18 has the idea of financial needs being provided. It does take money to finance missions. My parents served as missionaries in another country and we were basically at poverty level — but God met our every need. No regrets. It was because of faithful people who invested in them so that they could invest in reaching and teaching people who didn’t know Jesus. So there will be people in heaven from another country because people faithfully gave to support missions.

            So bottom line, is that God has called certain individuals to invest their lives in “full time” work. It is an honorable calling and there are dangers to be recognized. And so as I invest financially (as well as energy & time) in the expansion of the church of Jesus Christ through the mission through my local church which also includes global missions. This is my investment into things that have eternal value.


      2. Though I can’t fully understand how violated you must feel, I encourage you to find another church. My guess is that there were some Jesus-loving, strong believers at HBC. Though I have never been to a church void of hypocrites, church is about our service and worship of God and not about us. I hope you can work through the disappointment and find a different church.

        1. I am grieving today as I make the decision to leave HBC. There ARE so many strong believers at this church, including myself, who truly had no idea what was happening in the background. I’m praying that the Lord lead me to a new bible-believing church. I live in the Glen Ellyn area and am reaching out to all of you for any recommendations. Thank you.

          1. Hope you find something decent. But remember, Jesus is what matters, not some church fellowship. You are the Church, and whenever you get together with other believers to pray together or read the Bible or just to hang out, that’s probably a more pure version of the church than buildings and programs.

  6. Worth remembering the ECFA was only created to fend off the threat of government oversight after several major scandals involving the misuse of donations by various major charitable organizations. As long as they do the bare minimum and supply the veneer of respectability and accountability to keep the government off the evangelical churches’ backs, they are doing the job they were created to do.

    1. At this point, I’ll take the government. All churches should have to file 990s, no matter what. Enough hiding

  7. I believe the ECFA may be liable for the rubber stamp they provided. It is their phony seal that led to a lot of people contributing to this phony church.

    ECFA needs to call their attorneys in my opinion.

  8. The well-to-do churches could save themselves their EFCA fees if they simply filed Form 990, like every larger-than-very-small non-religious non-profit is legally obligated to do. EFCA is covering for this egregious lack of disclosure.

  9. Harvest used the ECFA seal as sign that all was well during the time when the Elders were excommunicated. Imagine how many folks gave donations to church based on the ECFA seal of approval. Now we know that Elders communicated Harvest’s financial mismanagement to ECFA President Dan Busby and he did absolutely NOTHING!!!

  10. Danny,Danny, Danny, Danny it seemeth that thou shall suffereth much hurteth, I greatly feareth for youeth , but actually you will probably get away Scott free, the world loves it’s own , the problem for you is that the world is enmity with God…….. back to OUCH!

  11. The Board of Directors page at ECFA is back up.

    Danny de Armas, BOARD CHAIR
    David Wills, VICE CHAIR
    Warren Peek, SECRETARY
    Wayne Pederson, TREASURER
    Paul Anderson
    Michael Batts
    Cindee Coffee
    Derek Grier
    Bruce Johnson
    Kurt Nelson
    Amy Nikkel

    A March 16th Wayback snapshot shows the following board members:

    Michael Batts CHAIR
    Danny de Armas, VICE CHAIR
    Warren Peek, SECRETARY
    Erika Cole, TREASURER
    Derek Grier
    Bruce Johnson
    Kurt Nelson
    Amy Nikkel
    Wayne Pederson
    Craig Warner
    Jerry White
    David Wills

  12. These guys are so deceptive. Thank goodness for Wayback. EFCA, accept the consequences of what you have done. Stop trying to cover it up. Your game worked for awhile, but it’s over now.

    I am with Jessica. The government needs to police the church so that they cannot take advantage of congregants so easily. Sad that so many so-called christians are wolves looking for fleece the flock. The church needs healthy oversight.

  13. This is eye opening. How can we do a better job identifying and eliminating this kind of behavior as leaders of churches and/or faith based charities? I am rethinking my own role as a board member and speaking up where I see chaos and disorder, or misrepresentation. Are there other signs?

    1. Carol, it shows humility and character on your part that you are asking these questions.

      Many problems could be discovered if board members would take time to connect with ordinary members in their organization and ask, “What’s going on?”

      In nearly three decades of working with four non-profit Christian organizations overseas I only met a board member once. And I have been in leadership in all these orgs. How can a board member properly oversee an organization when all they hear is what top leaders tell you about themselves?

      You ask, what are signs of problems? GFA diaspora website has plenty to learn from Disclaimer- I am not nor ever have been associated with that org. I just have enough life experience to know when I read that website that what people post there rings true.

      100+ people at GFA knew things were wrong but had to leave and start a blog to get their voices heard. Did board members ever interview them or take their concerns seriously before or after they left? Do current GFA board members take them seriously now? Or do they deflect like I have read Frances Chan is still doing for GFA?

      In GFA and other orgs when too many people leave that ought to sound alarm bells. 2000++ people left Harvest. Huge red flag. Leaving quietly is a sign something is wrong, very wrong.

      Board members can and should communicate with members of their org every so often asking for feedback. Questions could be asked such as:
      “Do you feel your org/church is above reproach financially? If not what specifically have you seen that says otherwise?”
      “Are your leaders humble servants or do they lord it over people? Share specific incidents.”
      “Has anything happened where you tried to share concerns with supervisor/elder/main leader and you were completely rebuffed? Explain.”

      If a survey like that turns up complaints from 2 people out of 100 it’s probably “just those people”. However if 10-20 people share similar complaints there’s obviously a problem. Why are Christian leaders afraid to employ common sense like this to find real issues?

      Board members of charities/agencies working overseas especially need to periodically visit and see what’s going on. Mission agencies have annual conferences- board members should go and talk with workers asking them specific questions about finance and leadership patterns. Agencies working with children abroad espeically need to visit, taking with them those trained to spot child abuse (because believe you me orphanages and children’s homes overseas are rife with this- I speak from experience).

      Hope these observations help. Thank you for being a leader who cares enough to ask.

  14. Any ministry that still uses ECFA should be questioned heavily before we give them any more money. The first two questions should be, “why are you still giving money to these crooks? Are you a crook too?”

  15. Perhaps there is a naivete & busyness among many of those on these boards, and they assume anything presented to them is honest. I think many board members believe they are there to help set vision for organizations, not really as any sort of accountability. They may be honest, humble people who actually can’t fathom other leaders taking advantage/being deceptive for their own selfish purposes. Those who are true servants and give much of their time to serve on these boards in addition to their own ministries may be completely blind.
    Let us pray that the Holy Spirit would open the eyes of leaders who may be so blinded by corporate culture they don’t even recognize they’ve gone astray. He is able!
    Thank you Julie, for asking these questions and sticking with it, even when horrible things are thrown at you. I pray for your protection and that of your family. Keep working to bring out the truth. You serve a vital function in the Body of Christ.

  16. I’d like to thank Julie, too. At first I had some doubts. Is all this exposing necessary or helpful. Now I see that it is. So, Julie, if you’re doing it as unto the Lord, it will be blessed. Amen and amen

  17. This is like the fire department arriving after there’s nothing but a few wisps of smoke coming up from the ruins and shooting a little water on it, then slapping each other’s backs.

  18. It all makes sense now….Harvest owed money to the EC Credit Union. If they weren’t seen as solvent the money wouldn’t come in. Former chairman of ECFA wants his money paid back so calls in chips with ECFA…they bounce between boards…the poor flock keeps being the peas shuffled in the shell game. How this must grieve the heart of God.

    “At the meeting, Adams said he texted Mark Holbrook—who was president of the Evangelical Christian Credit Union (ECCU) at the time and former chairman of the ECFA board—and asked Holbrook if he’d write a letter of recommendation for Harvest to the ECFA. Adams said Holbrook texted back within 45 minutes, saying he had already called Busby to commend the church and to tell Busby how financially strong the church was.
    At the time, Harvest was more than $56 million in debt and ECCU held the bulk of that debt. I reached out to Holbrook for comment, but he did not respond.”

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