Harvest Bible Chapel (HBC) suffered “a massive corporate governance failure,” which enabled former senior pastor, James MacDonald, to “extensively” misuse millions in church funds “for improper financial benefit.”
This was the conclusion of a financial review, which was revealed last night live at a sparsely attended meeting at Harvest’s Elgin campus, and simulcast to Harvest’s six other Chicago-area campuses.
“MacDonald’s strong and persuasive role as authoritative senior pastor, along with his close inner circle, insulation from proper accountability mechanisms, and key changes to the church’s operational structures, resulted in a highly problematic culture,” stated the report prepared by Wagenmaker & Oberly. This led to “systemic failure,” which enabled MacDonald to enrich himself with church money and treat ministries like his former broadcast ministry, Walk in the Word, as “essentially his own business.”
The review, which examined spending at Harvest from January 2016—February 2019, revealed that the church maintained two private checking accounts that gave MacDonald $3.1 million during the years studied.
One account was an “executive account,” which provided MacDonald with $1.2 million in deferred compensation, and also paid for some of MacDonald’s personal expenses. Elder Treasurer Tim Stoner, who presented the report to congregants, said this $1.2 million was in addition to MacDonald’s annual base salary of $650,000, and an additional $150,000 for “teacher license agreement,” bonuses, 403B contributions, and health benefits.
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MacDonald’s total annual compensation during the years studied ranged between $1.2 million and $1.4 million, Stoner said.
The second private account was a “WITW (Walk in the Word) reserve account.” According to Stoner, this account paid $1.9 million to MacDonald and his family members. Expenses included:
$286,000: Direct payments for James MacDonald and his family members for known personal expenses, including . . .
- $20,000: Accounting, tax, and pension services
- $5,000: Car repair bill
- $11,000: Internet tower at MacDonald’s house
- $22,000: College tuition
- $33,000: Two motorcycles
- $100,000: Counseling services
Just under $250,000: Gifts or donations, including . . .
- Vehicles to friends or ministry supporters, spending up to $27,000 at a time for a vehicle.
- $25,000: Donation to Museum of the Bible
- $18,000: “Benevolence” checks to one individual that was outside of church’s benevolence policy
$416,000: Travel expenses
$170,000: Hunting expenses
$140,000: Meals, entertainment, sporting events, concert tickets, & club dues
$94,000: Clothing and eyewear, mostly for James, though sometimes gifts for others (Some gift recipients have reimbursed Harvest.)
$71,000: Deer farm expenses (at Camp Harvest)
$36,000: Private investigator (The church is not sure of the purpose of this expense.)
Stoner said an additional expense not noted in the report because it occurred in 2014 was more than $250,000 in improvements for home security at the MacDonald’s home.
According to Stoner, some of the $1.9 million may have been legitimate church expenses. “But too often, there is insufficient documentation or no documentation at all to confirm the intent of the payment,” he said. “And it appears the decisions to spend these funds were too often made unilaterally without proper budget procedures, oversight, or approvals.”
According to the report, the private accounts were “controlled indirectly by MacDonald and directly by HBC’s former CFO, COO, and an executive assistant.”
The only former CFO who worked during the time period examined was Fred Adams, who now runs Church Building Ministry, a nonprofit that helps churches acquire new facilities using “creative alternative forms of property ownership.” Similarly, the only former COO who worked during that time was Scott Milholland, who now is vice president of business and operations at Grapevine Faith Christian School in Grapevine, Texas. MacDonald’s executive assistant from 2015—2019 was Sharon Kostal, who left Harvest earlier this year.
Stoner said that while the private expenditures are troubling, $1.9 million is less than 1.5 percent of total church revenues during the period. “The remaining 98 percent that went through the main accounts of the church did have proper oversight and controls and met the requirements of our accountants.”
[pullquote]”We allowed the ends to justify the means by which those results were achieved. And this was wrong.”[/pullquote]According to Stoner, Harvest has closed all private accounts. He added that the church has added a new finance committee, has tightened up its approving process, and has instituted a new procurement process.Harvest also will seek reimbursement from MacDonald for expenses that never should have been paid with church funds. Stoner said that some legitimate expenses were never reported on MacDonald’s W-2s. Those will be noted on amended W-2s so MacDonald will have to claim the expenses as taxable income.
When reflecting on how such gross financial impropriety was allowed at Harvest, Stoner said, “One of the reasons this environment was permitted to continue was because of our success as a church. We were growing in numbers and in giving . . . And God did amazing things in people’s lives. It was exhilarating to see God at work. But we realize now that we often preferred to focus on the good things happening. And as a result, minimized some of the problems that in hindsight deserved our attention. We allowed the ends to justify the means by which those results were achieved. And this was wrong.”
Elders did not take any public questions at the meetings, but instead encouraged people to approach them privately, which several did. One source who attended the meeting at the Aurora campus told me that several people left “in a bit of a huff and disgusted facial expressions” when elders refused to take public questions there. I approached Elder Al Miranda after the meeting in Rolling Meadows to ask for clarification on some items in the report, but he said the elders would not answer any questions from the media.
Harvest’s Failure Reveals Larger Issue in Evangelicalism
During the entire period studied, Harvest submitted to regular audits by Capin Crouse and was a member in good standing with the Evangelical Council for Financial Accountability (ECFA). Despite numerous attempts over the past six years to alert the ECFA to wrongdoing at Harvest, ECFA did not suspend Harvest’s accreditation until March of this year.
ECFA claims to hold its members accountable to good governance, transparency, financial oversight, and propriety in compensation-setting. Yet according to the financial review, not only did Harvest have abysmal governance and transparency. Harvest’s procedures for setting MacDonald’s compensation also “lacked the requisite independence, evidence of appropriate due diligence, transparency . . . and any accompanying minutes or report reflecting such required information.”
The review also noted that the church relied on a “Compensation Evaluation Study” provided by the Winters & King law firm, which used “circular methodologies” internal to the law firm’s business practices and developed from the firm’s own clients. Winters & King is a major player in the evangelical world and aggressively advertises its services in setting pastor’s salaries. Some of its high-profile clients include Craig Groeshel, Joyce Myer, TD Jakes, and Joel Osteen.
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Was the Winters and King website originally in a different language? It’s like someone put the text through Google translate. No professional company should have a website with that many grammatical errors.
DISTURBING to say the least! This is not how a church should run it’s finances. I hope the men involved will come to true repentance.
What about the law going after James, Fred Adams and Scott Milholland? Seems like they all moved on…
A corporation would have better justice than Harvest a church (?) is.
“Like a dog that returns to his vomit, is a fool who repeats his folly.” Proverbs 26:11
What prompted the investigation into James and Harvest? Or, is this the first church they have looked into
Kathleen asks, “What prompted the investigation into James and Harvest”?
Answer:
https://theelephantsdebt.com/
Start reading a few pages of the above website.
After that, then go here:
https://wonderingeagle.files.wordpress.com/2019/03/dbutters-hbc-story.pdf
and then go here:
https://wonderingeagle.wordpress.com/2019/03/19/analysis-of-the-dean-butters-statement-what-are-the-lessons-learned/
Nobody wants James MacDonald to be kicked out of a particular church. Rather, the issue is:
Why in the world is he being invited to share in and participate in the role of a Teacher / Leader?
According to 1 Timothy 3 and Titus 1, James lacks the qualifications of an Elder.
https://www.thegospelcoalition.org/blogs/justin-taylor/what-are-the-requirements-to-be-an-elder/
A $650,000 base salary???? Insanity!
JMac misappropriated funds. That means he stole the money aided by others. What is their punishment? Will they be charged and prosecuted in a court of law? I hate to say it but unless it actually happens, I don’t think so. How can men who name the name of Christ do such a thing? As the saying goes, “Just because a mouse gets into the cookie jar, that doesn’t make him a cookie”.
Another money making $CAM( SCAM). I still remember the PTL Scandal with Jim & Tammy Faye Bakker!
Julie,
Thanks for specific detail in providing the names of the CFO, COO and Executive Assistants. It seems that the new Elders are still up to their old ways in protecting the culprits in a guise of love. Still worse, is the ideal that a small sin is both permissible and comparable to the bigger picture. How is it OK “ that that while the private expenditures are troubling, $1.9 million is less than 1.5 percent of total church revenues during the period” What is the acceptable threshold? 2%, 5%, 10%. The $1.9M stolen could have paid down the debt and/or used for ministries.
How can they say that God is at work when His Name is tarnished and ridiculed among the nations? “One of the reasons this environment was permitted to continue was because of our success as a church. We were growing in numbers and in giving . . . And God did amazing things in people’s lives. It was exhilarating to see God at work” . Is it God or Satan at work?
In the aftermath of what has now happen; can they say today “we are growing in numbers and in giving . . . And God is doing amazing things in people’s lives. It is exhilarating to see God at work” HBC should invite you to speak and share your powerful Restore message. If HBC is truly sincere about cleansing and seeking the truth; they must get the IRS and Attorney General involved to recover these tithes from those who have robbed God.
HBC is nothing but a bunch of fools down to every last member that allowed this to happen. Why would any sane person give another dime?
How can you say that? In large churches, as a member myself, we hear nothing about how the tithes and offerings are spent
The sad thing is that report only covers the last 3 years. And very little about how badly many people were treated by Harvest MAFIA….but James McDonald and his Henchmen have been operating like a Mafia crew for 30 years ….Fred Adam’s, Rick Donald, Steve Huston Scot Millholand, Jeff Donaldson, trei tatum , Luke and Landon McDonald, and who knows how many others are All culpable in making merchandise of the body of Christ…maybe we can’t bring these charlatans to justice…but we can protect other believers from these Wolves by exposing them wherever they operate.
What about all the $ allegedly stolen by JMac during the build-out of the Elgin Campus??
“But if your vision is poor, your whole body will be full of darkness. If then the light within you is darkness, how great is that darkness! No one can serve two masters. Either you will hate the one and love the other, or you will be devoted to the one and despise the other. You cannot serve both God and money.” Matt. 6:23
This is a prime example of what happens when people claim you can serve both. In the end you end up serving Satan via his servant: Mammon. Big money corrupts period. Serving Jesus requires no middle man, no big buildings, none of all of these trappings which distract people from their own personal relationship with a risen savior. No celebrities needed besides the Mighty One: Jesus. Mammon was served and people were converted to a false gospel of money and power and success. Jesus is for losers! Come join Him away from the freak show at the big circus. This is not the only “Church” doing this. The same thing is going on in many other places with scandal yet to be uncovered. But it will be…
How grieved I am at the.continued decline of God’s church. So many wolves are deceiving so many people.
Julie have you ever reached out to the other pastors who are.friends of James like Greg Laurie and Jack Graham on their thoughts on this matter? There has been no character witness for James since this came out that would defend him. Only dead silence. Can we trust anyone in the church anymore? It seems once they get a glimpse of the money flowing in, they can’t help but use it for their greedy selves and those willing to further their purpose. What amazes me is how anyone can stay there
I am thankful that the new HBC Elders finally took action.
In the video the HBC representative said:
“while the private expenditures are troubling, $1.9 million is less than 1.5 percent of total church revenues during the period.”
Question: does anyone know that HBC debt was as high as 67 MILLION at one point recently? 67 MILLION dollars of HBC debt ! I realize that the HBC debt load is now about 42 MILLION dollars of debt. But the significance of $1.9 million ( “less than 1.5 percent of total church revenues during the period” ) is that HBC was accruing DEBT while all of this lavish, luxury, “living like a rich king” MacDonald lifestyle was going on.
This lavish, luxury lifestyle of James MacDonald was accomplished by MacDonald by using the same Tithes and Offerings that 99.9 % of the congregation had no idea were going to pay for an expensive African safari trip, etc…etc…..
In the video the HBC representative said:
“while the private expenditures are troubling, $1.9 million is less than 1.5 percent of total church revenues during the period.”
also during this same time period, Harvest Bible Chapel did indeed solicit and request increase in Tithes and Offerings for various projects, programs, etc…etc…. The representative makes it seem like, “it is ONLY 1.5 % of overall budget”…..blah…blah…blah……
But points need to be restated:
a.) Harvest Bible Chapel was taking on significant DEBT Loads during this time.
b.) The overwhelming 99.9 % of the congregation had NO idea that James was living like a filthy rich Dictator.
c.) “needs” and “programs” were advanced to the Congregation during this same time period as, “this is Important, and we need your money”….
d.) The details of the report are very troubling:
example: “our analysis indicates that $416, 139 was spent on travel expenses for MacDonald and many others. Of this amount, only $94,046 was added to MacDonald’s W-2 as compensation”…..
What happed to the remaining $300,000 plus money under the category of “Travel expenses”.?
Can you imagine if a Non-Christian at a secular company could Not account or justify why $300,000 was not properly documented for reporting, auditing, and taxation purposes?
e.) The Video states that the Financial Review Audit only goes back 3 years.
Just imagine if the Audit extended back 5 years? Or 8 years? Can you imagine what the Audit would discover?
f.) during these 3 years, the authors of the Elephant Debt and Julie Roys were criticized by others and had their reputations smeared because James MacDonald was intentionally bearing False Witness and spreading Lies.
And yet, the Financial Review Audit reveals the truth that James MacDonald is a ravenous wolf who lacks the Biblical qualifications of an Elder.
So why would the General Treasurer of the Assemblies of God denomination overlook this and invite MacDonald to begin teaching at his New Life Covenant Church Chicago?
Why?
“ The overwhelming 99.9 % of the congregation had NO idea that James was living like a filthy rich Dictator.”
REALLY?? A 2 minute Google search would display the size of this bozo’s house. Anyone that attending this church and giving money when it was clear (to anyone with half a brain) that he was living in $1 million house has no one to blame but himself.
How is it not clear to you when you see your senior pastor riding on a motorcycle and acting like a 25-year-old child that maybe there might be something wrong? A 60-year-old man behaving like a 25-year-old-that isn’t your first clue? My senior pastor lives a very quiet life and is not obnoxiously loud and authoritative. Do you want that type of behavior in your senior pastor? You all sat in the pew Sunday after Sunday and heard stories about all the celebrities that he met with. You saw all the pictures flashed up on the screen behind him as he bragged about where he went for the weekend. You heard those stories time and time again from him. And you wallowed in the glory of going to a “popular” church. Now you are so shocked to learn off all these misdeeds? Puh-leeze. Examine your own hearts and consider the depth of your own spiritual life. Don’t you want to be a part of a church that focuses solely on God’s word and not on some celebrity pastor?
Tom:
Pipe down for a second.
Yes: I and many others knew that James was “wealthy.” But I and others were told repeatedly that his wealth was due in part to his family connections in Canada and were “pre-Harvest”. And then later we were told again that his “pre-Harvest wealth” may also be due to God blessing the sale of his books of which there are many.
No: I never saw MacDonald personally riding his expensive Motorcycle? Did you?
I never did, ….nor did my friends and family members.
No: I and my family never wallowed in the glory of going to a “popular” church.
Rather, at the time we all “thought” that it was a Bible-based church. We didn’t wallow that it was a popular church because we knew there were many “popular churches” in the suburbia of Chicago.
Your post above is off-putting, but I will take your advice and “Examine my own heart and consider the depth of my own spiritual life” ( quote from Tom )
The above is good counsel, and I take that as good advice from you.
FYI only….I left Harvest years ago. I found out about the Elephant’s Debt website only after I had already left.
I still stand by my comment that the vast majority of Harvest members never knew their very own tithes and offerings were directly funding the lavish, luxury lifestyle of James MacDonald and family.
I’ve had it! I want my 5 years of tithe that I faithfully gave to Harvest, supposedly to do “God’s work”! I want it back – with INTEREST!!! I am going to give it to my current real church!!!! Somebody out there must know someone in the government and law enforcement to STOP HIM!!!! I know that ultimately this whole thing is in our Lord’s hands and in His time…but it just hurts right now!!!
“ One of the reasons this environment was permitted to continue was because of our success as a church. We were growing in numbers and in giving.”
This is the single biggest problem with churches like Harvest, Willow, etc. Note the “our” success. Not God’s blessing, “our” success. These “celebrity” churches like Willow, Harvest, et al give true Bible-believing churches a bad name. Shame on the people who attend these types of “popular” churches because they like the fame of having the next NFL player on stage telling his story or the next Christian artist brag about their success. If you people only attended a true Christian. Hutch which doesn’t seek man’s approval or fame your faith would grow. Good to see God rooting out the filth from these glory-hound churches.
“Let no corrupting talk come out of your mouths, but only such as is good for building up, as fits the occasion, that it may give grace to those who hear.” – Ephesians 4:29
It’s fine for you to have an opinion but please be respectful in the way that you express it.
My comment was directed at Mickey who posted this on 11/22 at 6:01 PM:
HBC is nothing but a bunch of fools down to every last member that allowed this to happen. Why would any sane person give another dime?
Heed the warning: leave that church
Easy.If you have no curiosity about how your money is spent and/or how accountable the financial records are at your church, you are a fool.
Then the vast majority were fools.
Diotrephes wanted the preeminence, the Corinthian factions wanted significance and power, and the book of James warned about some who wanted to teach for the wrong reasons, filled with bitter jealousy and selfish ambition- going so far as to call them demonic (3:15).
And so it is no surprise that there are some that are set on ‘using’ the church for their own agendas hidden behind layers of spiritual veneers.
We must start with the pulpit—for when it’s the pastor ‘using’ the church congregation, it’s especially worthy of alarm and action.
We are seeing pastors, ‘using’ their local church as a focus group to test out their messages and ideas, which are then monetized by developing an internet presence, and leveraging multiple income streams for their personal enrichment. They use their church and its resources to build personal credibility and systems or methodologies of ‘doing’ church, which they then market through conferences, books, consulting opportunities, radio programs and internet sales of products and resources. Typically these pastors gain a global presence to some degree, and develop a ‘brand’; they are attractive to some rich ‘influencers’ who fund and back the growing empire, believing it is all of God. The multiple income streams that result are astonishing, complex, and tempting, and typically unknown to the congregation who are simply pleased their pastor is ‘popular’ not realizing how rich he is becoming.
It does not end well- usually. At some point the effort and manipulations required to keep a personality driven church afloat, which exists for the benefit of the pastor and his handpicked mates, overwhelms reality. Leaks spring up and the attempts to plug the holes get more desperate and obviously wicked. The degradation of character, the obvious compromised behaviours and abusive, arrogant, entitled tendencies grow and become impossible to contain anymore. While many loyal congregants will go down with the shipwreck believing their pastor is a martyr or a saint to the end, a great many set out on the lifeboats to get as far away from the submerging hull as possible, with many deeply injured, and near drowning in their pain and the betrayal of their faith.
What can be done? Well among many things, such as being sure your pastor is a Christian to begin with, and not an egomaniac or a narcissist, consider that:
1) Pastors need to keep local church focused and lay aside the siren song of greater influence or greater impact. Be content with the local. Send them back to ‘fishing’ if they can’t keep their head in your local church, with their mandate to preach/teach and pray.
2) Pastors need to stop with Twitter- it is not really for the local congregation and leads to delusions of grandeur—as if his congregation needs his fleeting thoughts, his impulsive spiritual asides, and his constant presence in their lives? More likely it will turn to building his larger audience, to increase his impact beyond your congregation and it will all sound spiritual! The ego is placated.
3) Pastors need to stop with the multiple income streams—your church pays him to study and write and preach and so it is the congregation who owns his sermons, his books, and his methodologies. If he needs a greater income, discuss and evaluate as a church, but stop him monetizing his vocation and your congregation’s ministries.
4) Pastor–never, ever abuse expense accounts—if your church is gracious to let you take out someone for lunch now and then make very sure you say “the church congregation is paying for lunch” and don’t order steak, and be very, very grateful yourself- don’t take it for granted.
5) Pastor– If the church is paying you, the conferences you speak at, the money you are paid or ‘honorariums” you receive belong to the local church and the Lord’s treasury- especially if the church is not requiring you to use your holidays for the times you speak elsewhere.
6) Stop with the Pastor CEO corporate model. Shepherd elders are the protective, wise, accountability needed and a preaching elder needs to stay in his lane- study and preach and teach.
The lure of influence beyond a local congregation, the lure of more money and multiple income streams, are very real temptations it seems for some pastors. They may well find they don’t even realize they are ‘using’ the church, having become so entitled and pampered thinking they deserve such perks or privileges that have come their way—and then striving for even more. They will need strong accountability, and faithful men around them to keep their heads lower than our Kings, to identify the spiritual veneers and peel them away to the bone, and to keep the pastor from becoming a demon. (James 3)
Kevin—If the past (or current) elders and leaders collectively had a fraction of the wisdom and discernment you do, Harvest Bible Chapel would bring glory to God and its people would bear much fruit. Sadly, despite what they tell you, the leaders of Harvest are afraid the more Harvest is exposed for its wicked works, the more dominoes will fall. That is, the remaining HBC pastors who are beloved and popular with the church will be scrutinized for their lack of courage…and because they were more concerned with Harvest’s image than the living God. These leaders are culpable for how Harvest has dragged Christ’s name through the mud in all of this. Leaders at Harvest, if you’re not ready to accept your responsibility to the body of Christ, find another job; but please, work in the secular world. You’ve already done enough damage.
This guy lives everything out that he is saying.
I have witnessed everything he is explaining firsthand and I don’t attend his church.
Also he has an amazing book on Amazon for the local church called Pastoring with Elders
Hey Tom, just so ya know….Real Born again Christians don’t attend church, THEY ARE THE CHURCH! do you show up Sunday morning to attend yourself ??? No…. Mature Christians dont look down their noses at other BROTHERS AND SISTERS in Christ who are hurting. and say ” you know what your problem is you need to be like me”…. It looks and sounds arrogant and it bears no fruit….check out Romans chapters 14 and 15 it might help.
I have a bit of a side observation: It was my understanding that this report was read at a members-only meeting on Thursday. So WHY is this on a public website?!? Churches are families and often have “family members only” meetings to discuss topics – including tough ones. They should be allowed to have in-house conversations without fear they will be publicly posted. Could you imagine your family having a “family meeting” in your living room to discuss an awful and embarrassing family failure….and later finding the details all over a public website?
Julie, I understand what you are trying to do, but in this case, I think you may have gone too far. Members-only meetings should be respected as such. If they aren’t, then they won’t happen when they really need to. You have PLENTY of other material on MacDonald to run with.
Now, if this meeting was open to the general public, or if it were read at a Sunday service when visitors are likely to attend, then ok….but I recall otherwise. Let’s respect members only meetings accordingly.
MH, Because the same bad leadership DNA from Chicago heavily influenced pastors from their church plants (regardless of their clever name changes, strong claims to be autonomous or being part of the Great Commission Collective). And we are dealing with the same issues in these churches, learning from what Julie has exposed. It has opened our eyes about a lack of transparency with budget, frequent pressure to give, executive leadership committees, etc. This dictator pastor / corporate church model was not isolated to Chicago.
MH many of us attended Harvest for over ten years sacrificially giving. When we went to Elders begging them to do something we were told their hands were tied so we had to leave a church family that we dearly loved. We ended up moving out of state. As did many others. I feel we have a right to know what happened to the money we gave. And Tim is right, we are one body and this effects us all. It’s the secrecy that allowed this to happen. Everything should be brought into the light.
Could you supply references to the report you are siting? I would like to read the report in its entirely.
M H…Harvest put it on their website for ALL TO SEE.
M H was the book of Corinthians only for the people in Corinth, was the book of Ephesians only for the people in ephesus…I could go on Thesilonians, Colossians and so on….No! One Body ,One CHURCH, One people, One Family….when one part of the body suffers the Whole body suffers.