Years ago, one of the things that the financial crisis at Oral Roberts University pointed out was the apparent internal direction of funding. The Oral Roberts Ministry was founded first, and during the evangelistic ministry of the founder Oral Roberts, the ministry organization was used to help fund the university. In essence, the ministry spawned the university, and for many years used it’s national television program and direct mail outreach to raise significant funding for the university.
But apparently, about a decade ago it changed, and the tail began wagging the dog. I don’t have this confirmed as true, but a reliable source tells me that as many as 10 years ago the university began funding the ministry. To be honest, it’s tough to tell. The ministry finances and the university finances have probably been so mixed up for so long – that it’s tough to know what’s what.
For most people, that doesn’t matter, but for those involved in either organization, if true, it could mean that the ministry television program and direct mail outreach began shrinking to the point that the student tuition and fees, alumni giving, and university donors could have been helping to carry the ministry led by Richard and Lindsay Roberts.
Perhaps more accurate, Richard might have gone on the air to raise money for ORU projects. Then, those donations would go to ORU, but it could have been out of those donations that OREA (Oral Roberts Evangelistic Association) was possibly subsidized.
This is confusing stuff, and I actually doubt there was enough money from tuition and fees to have any surplus to help OREA from those funds. Of course, it could be totally legal depending on the pitch. However, if ORU was subsidizing OREA and at the same time borrowing money each year (because it had the assets to pledge), then is much of the current debt on the University due to OREA? You simply can’t tell from the 990’s that are public information. Either way, if it’s true, some would call that embarrassing and possibly shameful.
Complicated. But why is it significant? Because it happens out there more than you might think. There are a number of media ministries that are funded by the church where the leader pastors. In some cases, the church is everything: (church, ministry leader, ministry organization are all the same organization.) As long as the church board approves, everything’s fine.
But some pastors spin off a ministry. That’s why you’ll see a church pastor who is also head of his own separate ministry. That’s done for a number of reasons – usually so the pastor can own the copyrights to his sermons, books, and teaching materials, and so any profits of those materials can go to him or her without the filter of the church. Good or bad? I’m not an expert on church governance, but I do believe that a pastor or ministry leader has the right to his or her original materials, be they sermons, teaching, writing – whatever.
There are tax implications, so I always recommend a pastor or ministry leader get good legal and tax advice for these things.
But if the pastor sets up his organization to reap the profits of his intellectual property, then he or she also needs to accept some of the expense of the endeavor and the risk of failure. I’ve seen plenty of pastors set up separate “ministries” to get an added income, but the expense of the venture is carried by the church. For example, how many pastors are reaping the financial benefits of the sales of teaching CD’s or DVD’s but don’t bear any of the expense of the audio or video equipment or crew that recorded, edited, or distributed the products?
Again, it’s usually legal if the church board approves and it’s a royalty issue. But these things are often more reason for distrust on the part of the congregation, when they see the pastor or ministry leader financially benefitting in addition to his pastoral salary without sharing in the risk of the venture.
So what’s my point? Be careful in the way you set up a church or ministry spin-off. As I said, the intellectual property of a pastor or ministry leader should be theirs, but using a spin-off “ministry” that the church funds may be viewed as financially dishonest at best, and a rip-off at worst. As the Bible says, we should avoid even the appearance of evil, and the truth is, is pretty easy to spot those appearances today. But don’t get me wrong – I have no problem at all with these spin off organizations – as long as they’re done with integrity.
No matter how you look at it, I think these governance issues may be key in Senator Grassley’s investigation, and I would not be surprised to see a major change in IRS regulations soon, especially if we get a Democratic President who wants to punish the religious right for their past influence in politics. I think Grassley may also revisit the personal profit issue and make it much harder for individuals to personally benefit from tax free funds.
And if that happens, the church and nonprofit world will have a handful of TV evangelists to thank.