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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55 Responses
Strange handle
Amen. My wife and I attended HBC for a while and left in part after seeing MacDonald’s consrvative preaching conflicted with his high lifestyle. And this was before we learned about his gambling in Vegas with Jenkins. I am a MBI grad and disgusted that Jerry J remained on the board after bragging about being a high roller. This level of hypocrisy would be unacceptable in most corporations, But why do so many believers continue to follow these hypocrites?
Kevin as a pastor I say well written and thought out. I agree with all you said. To be a pastor is to shepherd with the other Shepherds(elders) the local Body of Christ. To minister the Word of God.
As a pastor this is beyond heart-breaking. It causes people to suspect that all pastors are like James MacDonald. I’m amazed and disappointed that many high profile pastors and others have not come out and spoken against this kind of behavior. How many knew what was going on and said nothing. Did Joe Stowell know about James’ behavior and greed? So very sad!
Yes to Kevin’s 6 points, and any church with a $1 million plus budget that truly wants to be transparent should publish the salary and benefit package of the lead pastor. MacDonald’s salary as head of WITW was public when it had to file 990s as a nonprofit, then unknown when WITW was absorbed in the church.
Thank you
@ M H you do realize that keeping financial fraud of a tax exempt organization is illegal, don’t you? If this had occurred at a secular institution there would have been an investigation, rightfully so, by now. Interesting that so many cults consider themselves a “family” when it comes to keeping the dirty secrets. Keeping the “Harvest Family” secrets for so long is what allowed all of this to transpire.
HBC and all of its subsidiaries and franchises (because that’s what this really is–a business franchise pretending to be a church) should have their 501(c)3 designation revoked ASAP. James MacDonald and the other “family” members who committed financial fraud and then covered it up for so long should be charged and prosecuted. Their bank accounts and assets should be seized and liquidated to pay back the people they’ve defrauded through donations at Harvest’s local franchises as well as the Walk In the Word national radio ministry. That includes many leaders who’ve written statements or publicly spoken out after the fact about what they knew was happening at Harvest while they were there. Saying I’m sorry, citing fear of losing your job, or citing MacDonald’s abusive treatment of you is no excuse for having allowed this man to defraud people (in the name of Christ) for YEARS. These people also need to be held accountable according to their positions and to the degree of what they knew and enabled to occur. I’m sorry isn’t enough. Those in the know were enriched by MacDonald’s fraud. Your salaries were paid due to MacDonald’s deceiving the public. You looked the other way while he stole money he wasn’t entitled to as long as you got paid also. That is disgusting.
It’s time for authorities to step in here. There also needs to be a criminal investigation into the allegations that MacDonald tried to order a hit on someone.
Where did I say anything about financial fraud being ok? I simply talked about allowing a church to have a “members only” meeting without its contents ending up all over the internet. I don’t go to HBC, but I do consider my “small but mighty for the Lord” church to be family (I guess that makes me a cult member?). We have had a few “members only” meetings my years as a member – including some that involved handling some very tough and disappointing matters. I liked that we were able to come together and talk behind closed doors as a family without fear it would be posted online. Even when handling a couple of situations that would eventually and unavoidably go public (i.e. unmarried ministry leaders conceiving a child together), it was good for us to come together first as a family to pray and talk about how we would move forward as the news would spread.
When I have seen other churches go through their own moral failures, I do think they should be able to have similar meetings in confidence.
That is all. Any implications about my being ok with financial fraud or anything illegal are absolutely incorrect. I think HBC needs to do whatever it takes to start over and get proper restitution from the MacDonalds and any of their enablers. I also think whatever is left of their membership should be able to meet privately to discuss how to do so.
Right on Carla!
Transparency?? What about the compensation and thievery of the other big shots at HBC – Luke? Landon?, Rick Donald?, Jeff Donaldson? What did they take?, severance?, misappropriated funds? Clothing? Motorcyles? Eyewear?
I agree whole heartedly with Carla’s comment.
Maybe should have figured something was amiss when James poured directly from a can of lighter fluid into a lit burn barrel on the platform of his church during a service. Very fortunate the can did not explode burning James and injuring those sitting near the front. Irresponsible impulsive careless unaccountable behavior in public is often a signal of deeper troubling actions in private? – Captain Obvious
WHY, WHY, WHY was this tyrannical behavior by James, his over the top salary, mishandling of church funds ,etc. allowed and tolerated to go on and on and on for such an extended period of time, with people in authority no less who were able to do something about it and did nothing? I know some will disagree but just because “people were being saved and the Sprit was moving” does not trump wrong doing by the pastor to go on unchecked. James would never have gotten away with any of it if those in authority would have acted when the signs of his abuse first began to show. And now HBC, just try and ask “King James” to return all the money he stole and see what answer you get. I’m not only confused but disgusted as well.
Sam you are 100% right the leadership should have stopped Jmac…. but those in leadership who could have stopped him were part of his crew……on the payroll, getting the perks, they’re just as responsible for this debacle as Jmac himself……Rick Donald, Jeff Donaldson, Trei Tatum, Steve Huston, Luke McDonald, Landon McDonald, Greg Bradshaw, Scott Stonebreaker, Craig stiener And let’s not forget
Fred (greasy thumb) Adams….and a bunch of other Gutless cowards who took their paychecks and looked the other way….Harvest (new leadership) thinks that they can do a 3 year audit, pin it all on Jmac and just “Move on”…only problem is its been going on for THIRTY YEARS!!! and Jamac DIDNT ACT ALONE….Harvest dosen’t want to clean house ….they do everything in bits and pieces waiting to see if the poop will stick ,and when it doesn’t they try a new lame attempt at transparency…their answer is “we will bring in a different MILLIONARE PASTOR to preach a milk toast sermon, who is alot nicer than McDonald….(Dave stone)….. waste thousands of dollars flying him in and the chumps in the pews will keep forking over the cash”….Very bad plan…get to the root. anyone who was in leadership while Jmac was in charge is complicit…they either new something stunk and turned a blind eye or the were in cahoots with Jmac. Either way the have dirty hands.
Kathleen, please think about what you have just said. You hear nothing about how your tithes and offerings are being spent… Does this not raise a red flag for you? Do you keep giving anyway? God instructs us to be wise stewards. If a “large church” does not publish it’s use of funds and one keeps giving without requiring any accountability for those funds would this not make the donor in that situation foolish before God?
If the confidence of the church family can rightfully adhere to Biblically precepts, then ok, but clearly this church did not. Not only is the name of the one we should be focused on, Jesus Christ, drug through the mud, laws have been broken. The church family here didn’t do due diligence, so I’d have to disagree with your assessment of keeping it “in house.” The family in house didn’t uphold scripture. I always watch what the people at fault do now. Will they repent and repay? We all know the answer to that. Watch the actions of the recipients of the windfall of money do after they’ve been busted. These guys lived way over their means at the detriment to the church members who thought their tithes were actually going to, oh I don’t know, missionaries, those in need, etc., you know, crazy things like that. So these “leaders” soaked the church to live and do these lavish things and now show no remorse, trying to somehow justify their completely wrong actions. Really, really sickening. Yes, forgive even though none of them has said, “we are sorry, we are wrong, we want to pay pack what we stole, will you forgive us?” Anybody heard that? Do you think you will hear that? Do you think one penny will be paid back? Crickets. And I suspect Big Mac will play the victim card and convince himself that he is owed money. Hey Harvest, time to stand up for the truth. Whether you like it or not, there are consequences for sin. Stop following these false leaders, take a stand, and do what’s right. Open your Bibles, live out what you read, and know there’s a price to be paid for living an authentic christian life.
1ELECT1D I…… your totally right….maybe believers should read the scriptures about tithing in the old testament in context…the tithe was for the levitical Priests who didn’t get a portion of the land, it was to be brought to the store house, 10 % of your crops your mint and Cumin and so on…..and there’s is a lot more you can look up in the old testament about these matters…..but these wolves have twisted these scriptures to guilt uninformed believers into believing that the tithe is for new testament believers and it’s not. We are to give generously AS NEEDED to people in the church and outside the church as needs arise…imagine how many needs could be met if the individual believer took the time to look out for his neighbors in need and instead of giving 10 % of thier income to Wolves like James McDonald and his Henchmen ,decided to take responsibility for thier neighbors and help them personally….yes I tithed for years and gave 10s of thousands of dollars to the “church machine “. It was easy,all I had to do is sign a check, it made me feel like I was doing something good…but in reality I was just being lazy I didnt want to lookout for my neighbors , to much time involved in that…besides that’s what I was paying the “church” to do right? I’m ashamed of myself now for thinking that way, and I’ve repented …its MY responsibility to help my neighbors and thats what I’m going to do….nothing wrong if you want to give to a “church organization ” if you want to, but not at the expense of your neighbors.in a nutshell, I ( or we) need to do what I blissfully trusted those in leadership at Harvest to do..unfortunately for a long time many of the leadership became rich and the neighbors in need suffered…lessons learned.
amen brother
This is such a sad situation. James was one of the greatest speaking pastors that I have ever come across. I listened to him daily then began attending the aurora campus. Besides a rather weak and disingenuous campus pastor in Elgin, the more research that I did into the goings on of the church, the more uncomfortable I became attending. It was a huge money machine and James not only abused the financial elements of the church but the human elements as well. Once this all became public, I left. The current elder board has done a magnificent job in addressing these issues and being transparent. The previous board acted like a rubber stamp mafioso for James. He has not only deeply scarred the church but has left many mangled human believers in his path. He has be asked himself and has yet to offer a specific and heartfelt apology in my opinion. He continues to deflect and do what addicts do:
Alibi
Deny
Justify
I was married to a narcissist for 25 years. He is the same only in a bloated, gluttonous, male form.
He constantly deletes comments from his Facebook page that even mildly go against his narrative. The man is a fraud and a charlatan. He is no longer fit for ministry but he has shown up in largely Hispanic church on the Southwest side of Chicago. Let the worshipper beware.