Gospel for Asia and Compliance with ECFA’s Standards: The 2015 Letter, Part 8

In CEO and founder K.P. Yohannan’s recent “exclusive personal response” to the fraud lawsuit settlement involving Gospel for Asia, Yohannan traces GFA’s problems to a 2015 “confidential letter from a financial standards association we were part of, and of which we were a charter member.” That letter was from the Evangelical Council for Financial Accountability and outlined 17 potential violations of ECFA financial standards. In October 2015, ECFA evicted GFA from membership. To help donors understand the nature of the concerns ECFA had about GFA, I am posting the concerns one at a time with commentary. You can read all of the posts by clicking this link.

Read the entire ECFA letter on GFA’s compliance issues here.

From that letter, here is the eighth compliance issue:

8. Use of funds restricted for the field for other purposes.

On June 3, ECFA discussed GFA’s claim that 100 percent of field funds are sent and used in the field. GFA staff confirmed that this was accurate. On August 24, ECFA was informed that GFA India made a gift to GFA of $19,778,613 in 2013 to complete GFA’s new office. On August 27, GFA’s staff confirmed that the funds relating to this donation were originally received by GFA as gifts restricted for the field and GFA transferred to field partners to fulfill donor restrictions.

Two important issues are raised:
A. Reallocating gifts donated for field purposes and using them to pay for headquarters construction appears to be a violation of ECFA’s Standards 7.2. GFA staff stated in a recorded GFA staff meeting that you approached the field partner and explained that GFA could borrow the funds in the U.S., at less than desirable terms, for the headquarters construction. However, a gift from the field partner, in lieu of GFA borrowing the funds, would allow GFA to complete the new headquarters and thereby save interest. Therefore, GFA would be able to send more money to the field in future years.

ECFA believes that the potential savings resulting from the GFA India gift is an inadequate basis to reallocate gifts donated for field purposes.

B. Reallocating gifts donated for field purposes contradicts GFA’s claim that 100 percent of funds are sent to the field. In fact, a significant amount of donations restricted for the field made a circuitous trip back to GFA and were used for the headquarters construction, as though they had never gone to the field. This appears to be a violation of Standard 7.1.

In a GFA staff meeting, GFA indicated the field partner took out a loan to cover the use of the $19,778,613 gift and GFA staff confirmed on August 27 that India-generated income was used to repay the loan. Our review of the board minutes did not indicate the GFA board had approved, or even been notified, of the $19,778,613 reallocation of donor-restricted gifts.

The lawsuit settlement between Garland and Phyliss Murphy and GFA included this agreement:

The Parties also mutually stipulate that all donations designated for use in the field were ultimately sent to the field.

Some, including GFA in their promotional material, have portrayed this as an admission that they did no wrong with donated funds. However, this is not the case. GFA did use donor funds in an elaborate scheme to help fund their corporate headquarters in Wills Point, TX. The donations were solicited to help needy people in India and were originally sent to “the field” but then sent back from “the field” to GFA in Texas. The ECFA letter outlines the circuitous route of those funds.

Originally, GFA leaders told staff that an anonymous donors gave the $20-million to complete the construction of the Wills Point headquarters. Then, in a staff meeting (that I first revealed on this blog), Yohannan and David Carroll disclosed to the staff that a field partner under the authority of Believers’ Church gave the money to GFA in the U.S. In that staff meeting, the staff were not told that the funds were originally given by donors.

GFA was so worried about the truth coming out about this point in the ECFA letter that they threatened to sue my former blog host, Patheos, to remove the staff meeting audio.  GFA is a nonprofit organization which requires a certain transparency. They claim to maintain financial integrity but threatened to sue to attempt to cover up aspects of their financing concerning their headquarters.

Thus, one of the key reasons GFA lost their membership in ECFA was reallocating field funds back to headquarters. So the funds were sent to the fields, but they didn’t stay there. If the Murphy suit had gone to trial, there is no doubt in my mind that the Wills Point headquarters transaction would have been a central component of the plaintiffs case.

Next: GFA’s financial statements presentation of restricted funds.

Gospel for Asia and Compliance with ECFA’s Standards: The 2015 Letter, Part 6

After about a month break, I am resuming this series.

In CEO and founder K.P. Yohannan’s recent “exclusive personal response” to the fraud lawsuit settlement involving Gospel for Asia, Yohannan traces GFA’s problems to a 2015 “confidential letter from a financial standards association we were part of, and of which we were a charter member.” That letter was from the Evangelical Council for Financial Accountability and outlined 17 potential violations of ECFA financial standards. In October 2015, ECFA evicted GFA from membership. To help donors understand the nature of the concerns ECFA had about GFA, I am posting the concerns one at a time with commentary. You can read all of the posts by clicking this link.

Read the entire ECFA letter on GFA’s compliance issues here.

From that letter, here is the sixth compliance issue:

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.

Our review of the board minutes did not indicate the GFA board had approved, or even been notified, that gifts solicited for very specific purposes were not being expended with the same specificity as the gifts were raised.

GFA led donors to believe their funds had been spent for specific items but there was no way to know if such intent had been followed since there was no documentation of that use. This policy had not been approved by the board. However, after this the board would have been alerted via the letter.

Francis Chan was on the GFA board by this time and had reassured people that he had sent in personal auditors to make sure funds were being spent as intended. Here is a May 15, 2015 email from his organization Crazy Love to me:

He has even gone to the lengths of sending two different auditors/accountants to research their financial practices. Both have come back with glowing reports.

His auditors/accountants missed a whole bunch of violations of ECFA standards. Chan continues to use this story. However, we know that GFA was kicked out of ECFA in October for numerous violations. GFA promised that they would reapply for ECFA membership which they have not done. GFA has not released audited financial statements. They have not disclosed to donors that their charity registration in India has been revoked.

Next: GFA’s financial statements do not appropriately report transactions with foreign partners.

Gospel for Asia: Does This Look Evangelical?

In his recent video defense of Believers’ Church in India, Gospel for Asia CEO and Believers’ Church Metropolitan K.P. Yohannan told Francis Chan that his church was “hard core evangelical.” Below watch Yohannan lead what looks like a kind of mass.

A relative of Yohannan’s sent this video to me and said it was a mass of the BC. I can’t understand what is happening so I can’t say for sure what this is. I will say that it doesn’t look like any evangelical church service I have ever attended.

As I have said several times when commenting about BC, I don’t care what they do. The reason I point this out is because it seems to be a matter of great importance to GFA to portray the organization — here and in Asia — as evangelical. Donors who care about this designation and about what this means should know that it may mean something very different there than here. I also think that GFA should simply represent their field partner accurately.

Gospel for Asia and Compliance with ECFA’s Standards: The 2015 Letter, Part 5

In CEO and founder K.P. Yohannan’s recent “exclusive personal response” to the fraud lawsuit settlement involving Gospel for Asia, Yohannan traces GFA’s problems to a “confidential letter from a financial standards association we were part of, and of which we were a charter member.” That letter was from the Evangelical Council for Financial Accountability and outlined 17 potential violations of ECFA financial standards. In October 2015, ECFA evicted GFA from membership. To help donors understand the nature of the concerns ECFA had about GFA, I am posting one of the concerns each day. You can read all of the posts by clicking this link.

Read the entire ECFA letter on GFA’s compliance issues here.

From that letter, here is the fifth compliance issue:

5. Lack of discretion and control over funds granted to foreign entities. During our review on June 3, ECFA staff raised questions regarding GFA’s oversight and control of funds sent to foreign field partners. GFA’s staff indicated that the foreign field partners are completely independent organizations and therefore GFA did not exercise any direct control over field partners. GFA staff also indicated that they did not have a foreign grant process in place to oversee the use of funds.

Given legal requirements on tax-exempt entities to have appropriate discretion and control over the use of funds sent to foreign entities, ECFA staff indicated that GFA’s lack of a grant process appears to violate ECFA Standard 4’s requirement to follow applicable laws.

Subsequent to these conversations, on August 21, GFA staff indicated a new foreign grant process was developed with the assistance of its new audit firm and will be in effect as of September 1, 2015.

Our review of the board minutes did not indicate the GFA board had approved, or even been notified, of GFA’s minimal oversight of funds provided to field partners.

For reasons I cannot explain, GFA has publicly claimed no control over what happens with donations in Asia. K.P. Yohannon has repeatedly claimed that he is not on any boards in Asia. As recently as last month, he told Francis Chan, he has no more control over Believers’ Church than the other Bishops.

This claim was thrown into doubt during the fraud lawsuit due to discovery of an email from Chief Operating Officer David Carroll to K.P. Yohannan. In it, Carroll said to Yohannan:

We can say all we want that we don’t have anything to do with the Believers Church or the field and that you are only the spiritual head of the church and that finances are handled by others but you, but as a practical matter, that will not hold up.

The Believers’ Church constitution makes it clear that Yohannan is the final and supreme authority in temporal and spiritual matters. Perhaps GFA didn’t want to own up to the level of control Yohannan possesses.

In any case, the claim that Believers Church and GFA-India (now known as Ayana Charitable Trust) had no input from Yohannan seems implausible. At this time, both charities in India are barred from accepting foreign funds since their registration as charities was revoked in 2017.  GFA-USA is sending funds to NGOs which act as shell organizations for the purpose of funneling money to Believers’ Church.

Donors should know that funds given to GFA don’t go directly to GFA in India.  Some funds go to other nations in Asia but most goes to entities in India that have no operational presence in the country. They exist to receive funds and give them to Believers’ Church or some other BC controlled entity. I have asked various authorities if this is allowed but have not received an answer as yet.

Next post: 6. GFA solicits funds for narrower purposes than the eventual expenditure of the funds.

 

Gospel for Asia and Compliance with ECFA’s Standards: The 2015 Letter, Part 4

In CEO and founder K.P. Yohannan’s recent “exclusive personal response” to the fraud lawsuit settlement involving Gospel for Asia, Yohannan traces GFA’s problems to a “confidential letter from a financial standards association we were part of, and of which we were a charter member.” That letter was from the Evangelical Council for Financial Accountability and outlined 17 potential violations of ECFA financial standards. In October 2015, ECFA evicted GFA from membership. To help donors understand the nature of the concerns ECFA had about GFA, I am posting one of the concerns each day. You can read all of the posts by clicking this link.

Read the entire ECFA letter on GFA’s compliance issues here.

From that letter, here is the fourth compliance issue:

4. The level of urgency communicated in GFA donor appeals contrasted with reserves held by foreign field partners and delays in sending funds to the field. In light of the significant cash balances held by field partners and the delay in sending funds to the field, ECFA staff raised concerns about the appropriateness of communicating urgency in many donor appeals. This includes appeals indicating “When we share with you about the urgency to reach the untold, lost millions—and the opportunities to win them to Jesus—it is not done to produce feelings of guilt or manipulate.” One appeal we reviewed indicated “One blanket, like the one Hetaksh received, will literally make the difference between life and death for them and especially for their small children and elderly relatives.”

The delay between when a donor gives a gift and when the funds are actually made available for designated purposes on the field is inconsistent with the level of urgency in many appeals and the timeliness of using donor-restricted funds as required by ECFA Standards 7.1 and 7.2. On August 12, GFA staff indicated that despite the delay in making foreign contributions available to carry out programmatic work, at least some designated funds were disbursed on a timely basis through the use of field-generated income.

Our review of the board minutes did not indicate the GFA board had approved, or even been notified, of GFA’s practice of soliciting funds based on urgency with a corresponding delay in disbursing funds to the field.

GFA Recycles Urgency

Even after being called out for this in 2015, GFA used this same urgent appeal in 2017. In a 2017 Patheos article, an anonymous GFA staff person recycled this appeal as follows:

To Hetaksh’s surprise, God answered his prayer for financial breakthrough in a very practical way—and just before winter started, too: He and his family received a thick, warm blanket!

This blanket came as a gift through Pastor Mrithun’s church during a blanket distribution to the poor—a distribution sponsored by our dear Gospel for Asia friends around the world. The blanket was big enough to keep the whole family warm at night, night after night, throughout the entire cold season.

This visible sign of God’s love and care greatly encouraged Hetaksh. No doubt the Lord will continue to care for this precious family and make them a powerful witness to others.

Urged to Give

Every winter, our partners in Asia feel the urgency of those around them, and we do, too. They pray for means and opportunity to distribute thousands of blankets and articles of winter clothing among those who lack adequate shelter and clothing to survive the freezing cold temperatures. They know that one blanket, like the one Hetaksh received, can make the difference between life and death for a family, especially for small children and the elderly.

It’s crazy to realize what a blanket can do. They are so small, but they work. For those who don’t have extra blankets for every family member, like we may, one blanket can mean a whole lot.

This recycled story (who knows if it is true) of Hetaksh  is presented as if it is current and represents an urgent need. In fact, GFA has had millions sitting in accounts and could have provided thousands of blankets. Instead, some of that money eventually went to other projects and some went to complete the Wills Point headquarters.

It is hard to believe that GFA was called out for this very appeal in 2015 and then reused it in 2017. So few people know about the ECFA report that apparently the GFA marketers believe it won’t matter.

Gospel for Asia and Compliance with the Evangelical Council for Financial Accountability’s Standards: The 2015 Letter, Part 3

In CEO and founder K.P. Yohannan’s recent “exclusive personal response” to the fraud lawsuit settlement involving Gospel for Asia, Yohannan traces GFA’s problems to a “confidential letter from a financial standards association we were part of, and of which we were a charter member.” That letter was from the Evangelical Council for Financial Accountability and outlined 17 potential violations of ECFA financial standards. In October 2015, ECFA evicted GFA from membership. To help donors understand the nature of the concerns ECFA had about GFA, I am posting one of the concerns each day. You can read all of the posts by clicking this link.

Read the entire ECFA letter on GFA’s violations here.

From that letter, here is the third compliance issue:

3. Delay in sending funds to the field. It was not until the meeting on August 12 that we learned that $47,898,342, or approximately 82%, of gifts received by GFA in 2014 designated for India were not sent to the field until the last two days of the calendar year.

To be clear, nearly $50 million of gifts were raised from January to December, with only modest amounts sent to the field until the end of the year. ECFA staff expressed concern over failing to send gifts to the field on a timely basis, raising compliance issues under ECFA Standards 4, 7.1, and 7.2, particularly given the urgent nature of many GFA gift solicitations. Subsequent to this discovery, GFA staff indicated that field partners requested the delay of sending the funds to the field due to challenges in transmitting funds into India. ECFA could not confirm if the delay in transferring the funds was justified.

Based on ECFA’s review of GFA’s internal financial statements as of June 30, 2015, GFA had a cash balance of $28,338,841 in funds designated for foreign field partners, or more than the total of all funds received for the field in the first half of 2015. In other words, the practice of sending funds to the field on a significantly delayed basis was not only followed for 2014 but also during the first half of 2015.

GFA staff informed ECFA on August 12 that part of the cash balances held by GFA on June 30 were transferred to field partners during the month of July. On August 21, GFA staff indicated there is now a plan to send funds to field partners on the 15th of each month.

When ECFA staff asked if the board was apprised of the delays in transferring funds to the field, GFA staff indicated the board was informed of this fact because the board received periodic financial statements. However, the internal financial statements erroneously reflected field funds as a liability and as an expense immediately upon receiving the funds. Thus, it would have been very difficult for the board to learn of the delays in sending funds to the field because the interim financial statements indicated the funds had been sent to the field when they had not. Therefore, ECFA found no indication that the board had approved, or even been clearly informed of the questionable practice of delaying sending funds to the field.

One of the reasons former GFA board member Gayle Erwin resigned related to his realization that he was being kept in the dark about how funds were spent. In this case, funds were being held from the field. Even though GFA representatives urgently solicited donations, the funds were not sent until near the end of the year.

There was no problem in submitting funds to India. However, the field partner Believers Church (K.P. Yohannan is the head of that church as well as CEO of GFA) may not have liked the scrutiny of the Indian government. Spacing out donations might have been part of their plan to manage foreign contributions. However, it is still unclear to me why GFA held back so much money.

In any case, GFA raised millions and held it for several years all the while begging for funds. The next post will deal with that problem directly.

Next post: 4. The level of urgency communicated in GFA donor appeals contrasted with reserves held by foreign field partners and delays in sending funds to the field.

Gospel for Asia and Compliance with the Evangelical Council for Financial Accountability’s Standards: The 2015 Letter

In K.P. Yohannan’s recent “exclusive personal response” to the fraud lawsuit settlement involving Gospel for Asia, Yohannan traces GFA’s problems to a “confidential letter from a financial standards association we were part of, and of which we were a charter member.” He said that the letter was put on social media to damage GFA. He added that a former staff member sent negative letters to donors.

Some of that is true and some is misleading. The letter Yohannan referred to came from the Evangelical Council for Financial Accountability and was given to me by Gayle Erwin, a former GFA board member who served on the board for 30 years. Erwin had resigned from GFA’s board because of multiple problems he saw at GFA. He wanted to correct GFA’s public statements and believed the donor public would only know the truth if they had information. Erwin’s motive was to inform donors and set the record straight. If informing donors damages GFA, then GFA should consider the implications of that.

Yohannan also said a former staff member sent negative letters. In fact, a group of former staff members approached GFA’s board many months in advance of any public revelations. Long before I published my first blog post about GFA, former staff members approached GFA’s board with 5 concerns which they hoped could be resolved without public disclosure. In this newest statement, Yohannan presented the situation with former staff as though he was surprised by it. He should not have been. The situation had been brewing for months before anything came to light. You can read the concerns and history of the situation at GFADiaspora.com.

K.P. Yohannan said that the allegations were false. However, the board member he assigned to look into the matter — Gayle Erwinfound evidence for all but one of the five concerns.  He later changed his view about the last concern and said he agreed with the former GFA staff on that point as well. Erwin also alleged in 2015 that Yohannan altered Erwin’s report to the GFA board to minimize the severity of Erwin’s findings. Those interested in comparing Yohannan’s statements now to former GFA board member Erwin’s documents and statements from 2015 can see them here. I also intend to post excerpts from Erwin’s report over the next several weeks.

For now, I want to respond to this part of Yohannan’s response:

Every year we evaluated our ministry and underwent an independent audit. In 2015, our governing board received a confidential letter from a financial standards association we were part of, and of which we were a charter member, pointing out that our accounting practices needed to better conform to the requirements set by that association. Despite the unique challenges our organization faces by supporting ministry in certain parts of the world, we immediately set out to comply with their request and hired a new auditing firm.

This paragraph appears to blame GFA’s former auditor Bland Garvey for the lack of adherence to ECFA’s financial standards. In fact, the ECFA didn’t specifically request that GFA change firms. The ECFA listed 17 items of concern; in two of them the ECFA listed problems with accounting practices. In one of them, GFA said they had already changed firms without a request from the ECFA. In fact, most of the matters related to financial practices within the control of GFA’s leadership.

To focus attention on matters of interest to the public which have been obscured by GFA’s response to the lawsuit, I am going to post segments of the ECFA compliance letter on the blog over the next month. Interested readers can read the entire letter by clicking this link. However, starting today, I will take each section in a post and highlight elements of what ECFA found. The reasons ECFA evicted charter member GFA weren’t limited to problems with the accounting firm. I will take them in order from the letter to K.P. Yohannan dated September 2, 2015:

The following is a summary of the most significant GFA compliance issues we reviewed:

1. Use of field-generated funds to satisfy designated foreign contributions. During our meeting on July 1, ECFA first learned that GFA and its field partners have engaged in a multi-year practice whereby field partners at least partially satisfied the designations on foreign contributions (primarily from U.S. donors, restricted for field use in India) by using locally generated field income (contributions from donors in India, profits from an India based rubber plantation, hospitals, etc.).

GFA staff indicated that the purpose of this practice was to retain foreign contributions in Indian Foreign Contribution (FC) accounts to earn a higher interest rate while expending locally generated funds that would not earn the higher interest rate. At this point, it is important to note that GFA disclaims that it exercises any control over field partners (see #10 below).

GFA staff also indicated that amounts in FC accounts would be used eventually for their original designation, as well, with the ultimate result that the purpose of the foreign contributions would be more than fulfilled.

To be clear, GFA solicited funds from donors, primarily gifts with donor restrictions, and transferred the funds to field partners in India, depositing them in FC accounts. While certain amounts were expended from the FC accounts in fulfillment of donor designations, significant amounts were retained in FC accounts over a period of years (see #2 below).

ECFA staff observed to GFA that it is not a normative practice to hold donor-restricted gifts and fulfill donor restrictions using other funds. Especially with respect to funds sent to international partners, it is extremely difficult for GFA to demonstrate that it has exercised appropriate control of the funds. Further, ECFA observed that this practice may not comply with ECFA Standard 7.2 because of the lack of clarity regarding the satisfaction of donor restrictions on gifts solicited by and given to GFA.

Our review of the board minutes did not indicate the GFA board had approved, or even been notified of, the practice of using field generated funds to satisfy restrictions on foreign contributions.

Subsequent to ECFA learning of this practice on July 1, GFA represented to ECFA that GFA’s field partners have ceased the practice of satisfying the designation on foreign contributions with field-generated funds.

GFA acknowledged using money from Indian for-profit ventures and Indian donors to fund activities which donors from the US thought they were funding. US funds were being placed in interest bearing accounts. One problem with this is that field partners might not use those foreign funds for the purposes designated. Some funds were held for many years while donors thought their donations had been spent to help evangelists or children. GFA couldn’t satisfy the ECFA that those funds had been used to satisfy donor intent. This was replicated in the fraud trial which led to the federal judge sanctioning GFA because they were unable to produce evidence about how the funds matched up with donor designations.

Next post: Excessive cash balances held in partner field accounts.

Believers Eastern Church and K.P. Yohannan Use Indian Law to Attack Critic

While using a defamation lawsuit to attack critics didn’t work well for Harvest Bible Chapel, it may have a different result in India for K.P. Yohannan and Believers Eastern Church.

According to this The Hindu article, The Believers Eastern Church is behind a charge of defamation which led to the arrest of a longtime critic of the church and Yohannan.  Anush Solomon Joy, aka Solomon Samaritan was arrested and then posted bail after being accused of defamation and attempted blackmail. Over the years, Anush has contacted me as well as GFA former employees with various concerns about GFA. He has published a rather fantastical booklet alleging satellite and microwave attacks.

My impression has always been that the gentleman isn’t making serious or credible attacks  and that he shouldn’t be considered a threat to Yohannan. That the church is taking on someone who has no following and isn’t taken seriously is surprising and disturbing.  Microwaves aside, perhaps Mr. Anush has stumbled on to something and should be given a second look.

Gospel for Asia is Encouraging People to Donate Settlement Funds Back to GFA

As a part of the settlement in fraud case Murphy v. Gospel for Asia, GFA agreed to set aside $37-million in a Settlement Fund to provide relief for donors as well as cover court costs and attorneys’ fees. GFA also agreed to have plaintiff Murphy join GFA’s board. Murphy and GFA will also work together to designate a replacement for K.P. Yohannan’s wife who will go off of the GFA board. GFA agreed not to appoint any other relative of Yohannan to the board.

The mission organization also agreed to comply with Evangelical Council for Financial Accountability guidelines and seek readmission to membership. GFA was kicked out of the ECFA in 2015 and has never requalified for admission.

Read the Settlement Agreement

In the mean time, GFA is seeking to get some of the settlement money back via donors. The email below comes from a current staff member who asks supporters to seek the funds and redonate them to GFA. Although this is meant to sound spontaneous and individualized, I have gotten word that the same appeal has gone out from several staff members. I can’t corroborate all of the claims in the email except those which are a part of the settlement. Here is the appeal:

Dear friends,

I come to you this morning, not in any official capacity or representing anyone else, but expressing my own thoughts as someone who loves and supports Gospel for Asia. I am writing to you about a matter of tremendous importance, for which I request your prayers.

I am sending this communication to all those on my regular prayer email list plus a few others that I thought would benefit to hear this.

As you may know, GFA has been embroiled in a class action lawsuit for the last three years alleging that the ministry has misdirected funds that people donated to the mission field. If you donated to the field any time in the last 10 years, then you are part of the class and you should have recently received a notice from the court informing you about the settlement of this lawsuit and your part in it.

So what does this settlement mean to you and to me? First, some background.

For over three years now, GFA has been in a legal battle to survive this lawsuit, and yet it has not even come to trial. In addition to the immense burden on GFA of carrying on its defense, paying for legal representation, and supporting the onerous demands of the court and plaintiffs for information, the lawsuit has repeatedly been used as fodder for a far-reaching negative public relations campaign which has greatly damaged the reputation and ministry of GFA.

As a consequence, despite having the evidence to demonstrate that “all funds designated to the field were sent to the field and used for ministry purposes” GFA has agreed to settle the lawsuit out of court. As GFA says in its official statement here, “The agreement to settle was, in part, precipitated by a concern that the ministry could continue to bear the weight of defending itself.”

The settlement means that, in return for the lawsuit being dropped and never renewed, GFA must pay 37 million dollars. There is a bit more to it than that of course, but essentially it comes down to money—1/3rd of which (about 12 million dollars) goes to the trial lawyer. You can read One donor’s analysis of the GFA Class Action Settlement for a summary of what the settlement means, or read the 45 pages of legalese in the settlement itself here. GFA also has an official FAQ.

You might well be asking, “If GFA is an organization which primarily exists to connect the American church to the work of believers in Asia, how does it have 37 million to pay this settlement?” The answer: GFA doesn’t have it. GFA’s field partners in Asia have decided to use their locally-raised funds to cover about two-thirds of the settlement cost, and GFA has twelve months to raise the remaining 11 million, none of which will come from donations to the work on the field. If GFA doesn’t come up with the 11 million before the end of that twelve months, it forfeits it’s security collateral—GFA’s International Headquarters campus in Wills Point, TX.

So what does the settlement mean to you and me? The 25 million dollars that remains of the settlement (after the trial lawyer’s cut) is where you and I come in. This money is designated for what is called “Settlement Relief” of the class members. Each of us in the class may claim up to 100% of the amount we donated to work on the field through GFA. Or we can claim nothing, and none of that money will come to us. Any money that is unclaimed after the claim deadline will be divided up by the court between five ministries: Samaritan’s Purse; Friends of Israel; Global Training Network; Heaven’s Family; and Christ for All Peoples. Regardless of whether anyone makes a claim against the settlement fund, GFA will still have to pay the full amount of the settlement.

This brings me to my decision about my response: Because I strongly disagree with this lawsuit and what it represents, because of the great burden it has placed on GFA without any determination of wrongdoing, and because I want to do what I can to help God’s work continue in Asia, ______ and I have submitted our claim in this settlement for 100% of what we are eligible to claim. I plan to take all the money I can from my claim, minus an amount I will need to set aside for taxes, and donate it back to GFA to their general fund to help cover the 11 million dollars it has to raise for the settlement.

If you are also part of the “class,” will you ask God whether He would have you to do the same? And whether or not you are part of the class, will you please join me in praying that God will work a mighty deliverance for His people and for the work of the gospel?

To make your claim, all  you have to do is go to this link and fill out the online form. You don’t even have to know how much you are eligible to claim, the settlement administrator already knows that. You will need your “Class Member ID” which is in the settlement notification that you received by email or by postcard.

Regardless of what you decide to do, I hope this information has been useful to you. If you have questions, feel free to email or call me and I will answer to the best of my ability. And if you have found this email helpful, please forward along to anyone else you know who has donated to GFA and you believe might benefit from the information.

And finally, please pray that God will be glorified in this situation, and His will be done. I know that God is mighty and is in control. Many of the Psalms have taken on fresh life and relevance for me over the last couple years.

Those who hate me without reason
outnumber the hairs of my head;
many are my enemies without cause,
those who seek to destroy me.
I am forced to restore
what I did not steal.

(Psalm 69:4)

Trust in him at all times, O people;
pour out your heart before him;
God is a refuge for us.          Selah

(Psalm  62:8)

If this was written by a staff person, I would guess they work in public relations. I suspect more that this was written for staff by someone hired by GFA.

Clever strategy but I doubt that this is what the court intended. I should add that the settlement isn’t final as yet. It won’t be until June 13 when the Final Settlement Hearing is held. I don’t know if this kind of action by GFA could put the settlement in jeopardy.

It is obvious that GFA’s leaders are unconcerned about any of the issues raised by the ECFA in 2015 or Murphy v. GFA. Despite being chastised multiple times by a federal judge and having to settle this case with a monetary settlement and by giving up a board seat to Dr. Murphy, they have taken no responsibility and show no humility or contrition.

Right now, there are food pantries in every town in America which need funds to keep going. If you donated funds to GFA, consider recovering those funds to help people who need essentials.

If you want to give to something more exotic, consider the Schistosomiasis Control Initiative. The SCI helps protects children from parasitic worms which helps to decrease rates of malaria and HIV transmission. Benefits include improvements in neurological function and overall health. Survival chances increase dramatically when simple and cheap treatments are implemented.

Whatever you do, ask questions. GFA spins and promotes well but they don’t answer questions. For instance, numerous times I have asked, as have others, how they are getting funds into India since they lost their registration as a charity. The only answers given to others have all been false or misleading.

Gospel for Asia Class Action Suit Claims Process is Now Open

I just saw the following notice which is relevant to donors to Gospel for Asia. The claims process for the $37 million settlement in Murphy v. GFA is now open.

Pursuant to the proposed class action settlement with Gospel for Asia (and the individual defendants), the claims process is now open. Class members should have received individual notice by mail and/or email from the Settlement Administrator, Heffler Claims Group.

Filing a claim is simple – either:
1. Complete and return the Official Claim Form included with the Notice; or
2. File your claim online at www.gfaclassaction.us

Both ask you to agree or disagree with the list of donations (provided to the Settlement Administrator from GFA) on the website. To review the list, click on the “Donations List” tab on the website and insert your Class Member ID (found on your claim form). If you cannot find your Class Member ID, you may contact the Settlement Administrator using the appropriate prompts on the website.

Importantly, the claim deadline is July 11, 2019.

Should you have any questions, you may contact the Settlement Administrator at (844) 367-8894.

Funds may be recovered via this action and donated to another organization. If you need a reminder of the problems at GFA, please see this post (and this one) and re-read the report of the Evangelical Council for Financial Accountability. Remember that the ECFA removed GFA from membership in October 2015 due to multiple violations of financial standards. GFA promised to seek reinstatement. However, it is now 2019 and GFA still has not done so.