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.
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.