Since 2015, I have investigated the mission giant Gospel for Asia. First privately and then publicly, former employees of GFA sounded alarms about financial and personnel management. A former donor alerted me to the situation and eventually numerous insiders in India and the U.S. came forward with information about the second largest mission organization in the U.S.
At present, former and current leaders of GFA are defendants in two lawsuits which allege that they conspired to defraud donors by using donations in ways contrary what donors intended. One case is stalled in federal court but the other — Murphy v. GFA — is moving forward.
At the heart of Murphy v. GFA is the allegation that GFA didn’t use donations as donors intended. The judge in the case, Timothy Brooks, ordered GFA to produce documentation which could address this basic allegation. Because GFA has not produced documentation responsive to Brooks’ requests, he signaled his intention to appoint a Special Master to oversee the discovery process.
Although the federal suit is potentially more serious, GFA has been investigated on these allegations before. In 2015, the Evangelical Council for Financial Accountability investigated GFA’s financial dealings and eventually evicted GFA from membership due to multiple violations of ECFA standards.
The ECFA Investigated GFA’s Financial Accountability
Prior to removing GFA, the ECFA prepared a report of their investigation which was provided to GFA board members. The report was written in the form of a letter dated September 2, 2015 to GFA founder and president K.P. Yohannan. Former board member Gayle Erwin provided it to me after his resignation from GFA’s board.
Periodically over the next few weeks, I am going to highlight aspects of the ECFA report which are relevant to issues raised in Murphy v. GFA. This is especially relevant to the decision of GFA attorneys to ask the 8th District Court of Appeals to force Judge Brooks to withdraw his sanctions and not appoint an attorney to oversee the discovery process.
Since the key issue in the case is about how GFA spent donor funds, I will start with what the ECFA found on this question. On page 4 of the letter, ECFA’s representative wrote:
6. GFA solicits funds for narrower purposes than the eventual expenditure of the funds.
During ECFA’s review on August 12, GFA staff provided a document to demonstrate the flow of funds from GFA to field partners. ECFA learned that donor-restricted donations are appropriately tracked by particular revenue classifications. However, we also discovered, and it was confirmed by GFA staff, that the disbursement of the gifts are tracked in much broader categories. For example, donations were received and tracked for 38 different specific items including kerosene lanterns, bio sand filters, chickens, manual sewing machines, blankets, bicycle rickshaws, and others, but related expenses were only tracked as “community development.” In other words, donations were raised for 38 specific items, with the donations pooled for expenditure purposes instead of expending them specifically for the purposes raised.
ECFA did not find any evidence that donors to the 38 different giving categories had awareness that their gifts were grouped and used in a broader category than the specific categories in which the gifts were raised. ECFA’s staff raised concerns regarding GFA’s compliance with ECFA Standard 4, 7.1, and 7.2 in raising funds for a particular purpose but then failing to document the actual use of those funds by the particular donor-restricted purpose.
Subsequent to this conversation, on August 16, GFA staff indicated that GFA field partners will begin tracking expenditures by specific item accounts to provide adequate transparency as to the use of designated funds.
The Murphys donated $34, 911 to GFA between 2009 and 2014. According to the information provided by GFA to the ECFA, expenditures were not tracked by specific item accounts until at least after August 2015. GFA led donors to believe their donations would go for one of 38 items, but GFA did not track the way those funds were spent to know if the funds were spent as intended. “Community Development” is a label which could obscure many activities and allow GFA’s field partners to spend money on things not contemplated by donors. This admission by GFA staff, some of whom are defendants in Murphy v. GFA, seems particularly relevant to the discovery process but has not been disclosed to the Court by GFA’s attorneys.
Thus, I am left wondering which account is true – the one in the ECFA report or the one offered by GFA attorneys in various Court pleadings. To the ECFA, GFA staff claimed field partners in India didn’t track expenditures by specific items accounts. In their filings, GFA attorneys have indicated that documents in exist in India. In the recent writ of mandamus to the 8th District Court of Appeals, GFA attorneys wrote:
There are millions of such documents spread over 12,000 locations in almost every part of India. SASA00718-SA00720. Plaintiffs have made no effort to inspect those documents. Petitioners also secured and produced over 60,000 pages of bank statements, ledgers, and summaries from the field. (p. 16)
Presumably, when this case gets to trial, the ECFA report will be entered into evidence. It might be that ECFA staff who were involved will be deposed. Eventually, the admissions made by GFA staff regarding the same questions at issue in this trial will come out.