ECFA Suspends Harvest Bible Chapel’s Accreditation

"Under James MacDonald, Chicago-area megachurch may have been in “serious violation” of 4 out of 7 stewardship standards, says Evangelical Council for Financial Accountability." - Christianity Today

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Bert Perry's picture

My investigation of Harvest (a mild one to be sure) began in 2014 when my then-church used a bit from the book Authentic, and I had some very serious concerns about MacDonald's teaching that became concerns about his character when I learned about his expelling elders who asked to see the line item budget (prepared by subordinates of MacDonald), MacDonald's huge house, his under the table payment of a pastor at a branch church in Romania (double payments against the will of members), Elephant Room 2, endorsement of prosperity theology, and other issues. 

However, this goes worse than I'd thought, as my hunch was they were simply brazenly overpaying MacDonald in the same way as Joel Osteen lives large in a gigantic home.  What this is claiming is that the real scope of MacDonald's income, and problems with church finances, were hidden in accounting gimmicks, known to any number of people at Harvest.  Word to the wise; if you're hiding how much you're paying your pastor, or what you're doing, you're probably doing it wrong.

Aspiring to be a stick in the mud.

Joeb's picture

Question I have is are there any tax fraud issues at hand here. Someone has to pay my legacy costs.  I’m not real familiar with  how Pastors do their federal taxes but if the income hidden is high enough McDonald may have more than just a few problems and embarrassment.  He may get hit by Uncle Sam.  

Even if it’s civil fraud there is s 70% penalty on the tax owed. So if it’s 30 Gs add another 70 %.   Yikes.  Any assets  Mc Donald owns outright would be ripe for the pickins. 

mmartin's picture

Harvest's church governance is/was atrocious and they need a new auditor.  I'd like to see their audited financials including the footnotes, the management letter, and governance letter.

The pastor and/or church staff using church funds to pay for personal expenses happens more than we know.

Bert Perry's picture

Martin, not that I'm not curious about what the financials show, but I for one am glad I'm not the one who gets to audit the books.  Seems to me that when the guy who married into the Van Kampen family bailed on the organization when he saw a summary of financials--not even the original books--that this is one place that you hire some fairly "gee whiz" CPAs to take a look at what happened, not ordinary Joes like me.  

One interesting point of view is that the husband of one of my wife's former coworkers went on an African safari like that of MacDonald's, and he was anything but rich.  So something that could well put him or others on staff in jail was pretty much in the category of "petty cash" when you consider his likely income.  We'll see whether this is the big issue, or whether it's the tip of the iceberg, of course.

Aspiring to be a stick in the mud.

Joeb's picture

It’s called a PD if a owner/operator runs his personal expenses through a business.  It is taxable income.

 Now there are gray areas that one can push the envelope in one being travel related expenses and the other being company vehicles.  Politically the IRS does not crack down on travel expenses because if Companies or institutions cut back there is no business for restaurants and hotels and no wages and tips for the employees.  It goes to the core economy in some areas of the country.  My thought of McDonald gets hit up it will be civil.  

The IRS does not like going after the Amish in Pa or any religious organizations. Unless the Amish  were ridiculously unreporting it just was not worth it.  How do value someone’s labor who works a 100 plus hours a week.  It’s like the Greeks who own the dinners.  They may make a lot of money but when you divide it by the hours the owners spend at the Dinner it is a lot less than you think and their quality of life stinks. These people literally live at their businesses and the Amish pay all their medical expenses with cash.  

Jay's picture

Question I have is are there any tax fraud issues at hand here.

I am not an CPA or lawyer but based on my decade plus in NPOs and NPO budgeting, I would expect that there are from what I have read.  There's simply too much double dealing and financial gimmickry going on to believe (hope?) that everything was on the legal straight and narrow.

HBC looks to have been, quite simply, a gigantic personality cult.  I grieve for the damage it will do as it comes apart, particularly to the unsuspecting members and unbelieving community at large.

"Our task today is to tell people — who no longer know what sin is...no longer see themselves as sinners, and no longer have room for these categories — that Christ died for sins of which they do not think they’re guilty." - David Wells

Bert Perry's picture

Joe, appreciate your take here.  My thought in response is that given that a bunch of elders have left, that the ECFA delisted Harvest, and (again) that an experienced mutual fund manager bailed when he saw a summary of financials, that there is most likely something more there beyond preferential dividends going on. 

This is especially the case when I consider that a lot of these men were not particularly bothered by MacDonald's huge homes, expulsion of elders who wanted to see the line item budget in 2013, luxurious lifestyle, huge debt by the church, and the like.  They weren't going to bail until it became something bigger that might hurt them personally as well.  

Aspiring to be a stick in the mud.