Weighty issues were on the minds of politicians and the public in late 2012: The national election. The economy. Gun violence. Political and military unrest around the globe.

That may help explain the seeming lack of attention in December to a report keenly anticipated by the religious community—a report containing recommendations on legislative and regulatory oversight of churches and religious organizations. The 91-page document, “Enhancing Accountability for the Religious and Broader Nonprofit Sector,” was issued by the Evangelical Council for Financial Accountability (ECFA) at the request of Sen. Charles Grassley, Republican of Iowa, who at the time of his request in January 2011 was chairman of the Senate Finance Committee. ECFA is a national membership and accreditation organization that sets standards for financial transparency and compliance.

The report from the Commission on Accountability and Policy for Religious Organizations is available at www.ecfa.org/PDF/Commission-Report-December-2012.pdf. 

ECFA formed a 15- member commission of religious leaders to study 10 topical areas on tax and regulatory policies, with a particular eye to how they affect religiously affiliated nonprofits, including theological schools. 

Advised by 80 experts, the commission issued the report on nine of the areas, with the 10th—political expression by religious groups, such as endorsing candidates for office— to be addressed in a second report scheduled for release later this year.

In an interview with In Trust, ECFA president Dan Busby agreed that while the attention garnered by the first report was at a low level, the response it did receive was overwhelmingly positive. He said Sen. Grassley has not indicated how he might act on the 43 recommendations in the report. Busby also said he anticipates much greater interest in any recommendations that might address current prohibitions on political involvement by churches and related institutions.

The initial report did have critics, including some in the nonprofit community and even, to a degree, from Sen. Grassley himself. The senator received the report with appreciation but added in a statement that it “gives less attention to resolving some of the thornier questions, such as how to build accountability from entities that exploit vagueness in current laws and regulations for individual benefit rather than the greater good.”

A few nonprofit voices were more disparaging. Rick Cohen, editor of Nonprofit Quarterly, wrote: “While well meant, the ECFA report is a step backward in effective oversight of the more than one million charitable and religious entities that receive and steward charitable contributions.” Cohen called the report “a well-crafted and ultimately disappointing argument for self-regulation— or even something less.”

ECFA does not dispute the emphasis on self-regulation as the most appropriate answer to many of the issues studied; the hope is to avoid “excessive legislation or regulation that would be harmful or burdensome” to nonprofits. The report does not lean heavily on constitutional protections for religious entities but instead encourages practices that encourage accountability:

  • More effective administration of existing law.

  • Improved guidance and education about the law.

  • Proactive and verifiable demonstration of commitment to financial integrity.

  • A higher level of donor engagement in the giving process.

Sen. Grassley’s staff has indicated interest in hearing more from the religious community about legislation that would protect nonprofits from the required disclosure of information that could jeopardize the nonprofit’s “safety, property, or employees”—for example, spousal abuse shelter whose location could be identified through data required on some governmental reports. They pointed out that many vulnerable entities are sponsored by religious organizations.

The commission activity was spurred by Sen. Grassley’s attempts in early 2007 to address the “lavish lifestyles” enjoyed by many televangelists and, by implication, by others in the faith-based community. After lack of adequate response from the media ministries, he expanded his concerns to cover the 10 issues that the ECFA commission has been addressing.

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