An Auditor Raises Questions About Gospel for Asia's Promises, Spending and Unaccounted For Donations

I have been raising concerns for weeks about Gospel for Asia’s use of students to carry undeclared cash to India and unreported donations in India.  GFA remains silent and the Evangelical Council for Financial Accountability appears to be disinterested in the evidence submitted. Neither organization responded to my request for comment and information about this post.
On the other hand, I regularly receive emails from former GFA donors and supporters who have taken the information very seriously and have contacted GFA. Thus far, no donor who has contacted me has expressed satisfaction with GFA’s answers. Also, I was recently contacted by Jason Watkins, a former auditor with a Big 4 accounting firm who did a detailed analysis of GFA’s finances using information publicly available from around the world. I will post more of his material in coming days, but for today, I want to post an image depicting Watkins’ analysis of where GFA funds were spent in 2012. See below:
GFA Pie Chart 2012
 
I have posted information which addresses some of these issues, but this image brings 2012 together in one place.*
Jason had this to say about the chart:

The data from the FC-6 Forms for the 4 GFA NGO’s (Gospel For Asia-India, Believers Church, Love India, and Last Hope) were obtained and converted to US dollars. The amounts reported as received from foreign (non-Indian) countries were reconciled to the amounts reported as sent by Gospel For Asia, Inc. (US), Gospel For Asia-Canada, Gospel For Asia-UK, et al. This reconciliation shows that nearly half of the money sent from the west was not reported as received by GFA in India. That money is not accounted for. That is, of the $95 million that was spent by all entities, $45 million was not reported and $50 million was reported in India.
Further, of the foreign $50 million that was reported as received in India, an analysis of the ways that money was spent was performed. This analysis segregated and identified the specific expense categories (water wells, children, women, disaster relief, missionaries, administrative expenses, et al) to show how much was actually spent for the purposes indicated.
The amounts on the pie chart are a sum of the spending categories [called ‘utilised’ on the FC-6] reported in India on the 4 GFA NGO’s FC-6 forms, and then dividing each spending category by the sum of the spending of all GFA entities ($95 million).

The Indian government requires completion of the FC-6 form by registered charities. GFA has completed those forms but, as Watkins points out, the GFA affiliates around the world report sending more funds than the FC-6 forms show as received.
Watkins found reason to question several of GFA’s signature claims:

Gospel For Asia (GFA) solicits and collects over $90 million per year from trusting donors by using the following claims:

A detailed analysis of the actual spending by Gospel For Asia in 2012 reveals

  • 47% of the money ($45 million) is missing and unaccounted for. This was money donated by citizens of the US, Canada, UK, and other western countries. This money has not been recorded as received by the four Indian NGO’s (Gospel For Asia-India, Believers Church, Love India, and Last Hope) according to the FC-6 forms filed with the Indian Ministry of Home Affairs. If there are other NGOs directed by GFA, then GFA should reveal this.

  • 21% of the money ($20 million) was spent on administrative overhead in the west (12%) and administrative overhead in the field (9%).

  • Only 31% went towards charitable expenses, and only 12% actually reached the needy. These are the items that are highly promoted as uses for your donations (water wells, disaster relief, humanitarian outreach, women, children, and missionaries).

  • GFA spent $0 on adult literacy and poverty and yet this is a huge promotional item.

I have asked GFA several times for information regarding these matters. However, GFA told me that the organization would answer no more questions. Regarding the claims of 100% going to the field, I have indicated before that much of the money is on the field, but it is sitting in banks.
Perhaps this is case of bad reporting on the part of GFA. Maybe there is some other explanation. I have acknowledged in the past that I am not an auditor and have been open from the beginning of my research to any information provided by GFA. However, when an experienced auditor examines the publicly available documents and comes away with these findings, I think it is past time for GFA to address these matters.
I have additional analyses to report and plan to do so in the coming days.
 
 
*Sources: Forms FC-6 filed by Gospel For Asia-India, Believers Church, Love India, and Last Hope with Indian Ministry of Home Affairs; Audited Financial Statements of Gospel For Asia, Inc. (TX Corp); Gospel For Asia-Canada, Forms T-3010 filed by Gospel For Asia with Canada Revenue Agency (CRA); Unaudited Financial Statements of Gospel For Asia (Australia) Inc. filed with Australia Charities Regulation Commission (ACNC); Audited Financial Statements of Gospel For Asia (UK) Ltd. filed with the UK Charity Commission; and other online inquiries. Local currencies were converted to USD using exchange rates at oanda.com for the relevant reporting periods.

Phoenix Preacher Raises Red Flags Over Gospel for Asia

Last week, the Phoenix Preacher blog ran a post titled Red Flags over Gospel for Asia. The post describes a GFA donor’s attempt to get answers to questions which have come up in recent weeks. It is good to see donors asking questions but not so good to see the responses. The blog author raised some of the issues I have covered with this assessment.

GFA has felt that Throckmorton has been unfair to them and takes them out of context and so they have chosen to stop communicating with him in any efforts to clarify the concerns he raises. In my phone conversation with the GFA rep, he did give me explanations to some of the concerns raised by Throckmorton. However, some of the explanations seemed to me more like trying to put a positive spin on things rather than giving good solid evidence and rationale. Meanwhile, Throckmorton continues to raise more concerns as he uncovers more and more suspicious looking information. Here is a link to all his GFA articles: https://www.wthrockmorton.com/category/gospel-for-asia/

I plead not guilty to this charge. Up to and including the last email from David Carroll, I included the information Carroll sent on behalf of GFA. Here is what he said in his final email:

No, Gospel for Asia has not violated the law.

When you first contacted us, I mentioned that we would not be able to respond to every question you put before us. Now, with the increased volume and frequency of your questions, it has become clear that this back and forth has become a distraction from our mission work. For this reason, this will be my final response. We understand that you will continue to explore issues around Gospel for Asia and continue to be fed accusations from former employees, and we accept that.

We continue to remain accountable to all applicable laws and regulations, to the Evangelical Council for Financial Accountability and to independent auditors.

In his email, Carroll doesn’t accuse me of being unfair or taking him out of context. He said I asked too many questions and for that reason, he was not going to reply. This reason should be of grave concern to donors.

As we now know, GFA did violate the law when they sent groups of students to India each with $4500 in cash in envelopes without declaring the cash to U.S. customs.

The Phoenix Preacher post shows that the questions have only multiplied.

 

Gospel for Asia Reveals Financial Information on Evangelical Council for Financial Accountability Page

In a major departure from past practice, Gospel for Asia changed their ECFA page to include their U.S. financial information. Citing security concerns, GFA has declined to reveal this information on the web, but instead required interested parties to request it by mail. Up until now, the ECFA has allowed charter member GFA to be exempt from usual practice.
ECFA page old
Now the page looks like this:
ECFA page new
 
In a prior post, I noted that GFA sent $58 million to India but the FC-6 forms there show only a little over $6 million received from the U.S. Perhaps, GFA is moving toward more transparency. If so, the organization still has a long way to go to explain this discrepancy, as well as the money exporting to India, and discrepancies in the Bridge of Hope program reporting. Clearly, the organization is raising massive amounts of cash but has yet to explain why so much is sitting in Indian banks.
Given this change, perhaps the ECFA has been in talks with GFA and is privately working to bring GFA into compliance with ECFA guidelines. If this is true, don’t expect ECFA to alert the donating public. If the ECFA and GFA don’t see things the same way, my guess is that GFA will quietly give up their membership with no explanation.

How Much Does it Really Cost to Sponsor a Child with Gospel for Asia?

Yesterday, I pointed out that the expenditure of foreign funds by GFA in the fiscal year ending on March 31, 2014 for the support of children enrolled in the Bridge of Hope program seemed quite low, estimated at around $105 per year. Today, I want to point out that GFA’s request for child sponsorship in India is about one-third of what it is here in the U.S. and that the actual costs are even lower than that.
On the U.S. website, GFA requests $35/month to sponsor a child:

It only takes $35 a month to give a child everything they need—school supplies, a daily meal, medical checkups and more—to attend a Bridge of Hope Center. 100% of your sponsorship is sent to the field to support your child.

However, on the GFA/Believers’ Church Indian website, the cost is INR 800/month or about $12.50 in U.S. dollars per month. That’s quite a discount. The sponsorship page promises:

Your sponsorship of Rs. 800 per month provides [child’s name]:

  • An Education
  • A nutritious meal each day
  • A yearly medical checkup
  • Basic school & hygiene needs

I have also seen GFA budget documents which tell a more surprising story.* The actual cost during fiscal year ending 2014 to support one child in a GFA Bridge of Hope center in India was just under INR 500 or around $8.20 per month per child. This paid for the administration of the program, food purchases, and all child services. In fact, the actual items given to each child (school supplies, clothes, hygiene supplies and gifts) only cost INR 140 per child or $2.20 per month.
At that rate, Americans who send $35/month to GFA for a child sponsorship could actually support 4 children. Or GFA could keep the excess in a bank and draw interest on the balance as they appear to be doing. As I noted yesterday, GFA spent over $6 million in foreign contributions on Bridge of Hope expenses in FYE 2014 but had in the neighborhood of $25 million designated for “the welfare of children” sitting in a bank drawing interest at the same time.
GFA has to report that interest (the banks do as well) and all four GFA controlled organizations accumulated $4.2 million on the money in savings accounts by the end of FY 2014.
GFA says “100% of your sponsorship is sent to the field to support your child.” Perhaps this statement should be reworded. The money is sent to the field but a lot of it apparently ends up in a bank on the field.
It is past time for GFA to end the silence and address this matter as well as others which have come out in recent weeks.
 
*I have the documents but don’t have permission to publish them.

ECFA Statement: Faith Christian Church Still Under Investigation

The Washington Post’s Susan Svrluga posted a statement from the Evangelical Council for Financial Accountability about their ongoing examination of Faith Christian Church.

ECFA evaluates and accredits ministry organizations, including churches, only with regard to their compliance with our Seven Standards of Responsible Stewardship. Occasionally we are presented with complaints or accusations about a member organization and while we do not automatically dismiss such concerns, the scope of our investigative authority and purview is, according to our bylaws, necessarily limited to issues directly related to these seven standards. With regard to Faith Christian Church, we are working to ascertain if, in fact, any complaint expressed from former church members falls within the scope of our seven standards.

As I reported recently, ECFA executive vice president John C. Van Drunen has interviewed at least one former member of Faith Christian Church and expressed an intention to interview those who signed a letter of concern to the ECFA.  Given what I have heard from former members, it seems inconceivable that the ECFA would find Faith Christian Church in compliance.
For instance, the first standard of responsible stewardship ends with this statement:

Summary. A member’s commitment to the evangelical Christian faith is the cornerstone of ECFA membership. The word “evangelical” connotes more than mere subscription to a doctrinal statement. It includes commitment to an ethical and moral lifestyle that seeks to conform to a biblical norm. It is the lifestyle envisioned in  ECFA’s own statement of faith: “We believe in the present ministry of the Holy Spirit, by whose indwelling the Christian is enabled to live agodly life” (emphasis added).

Both Christians and secular society often do not distinguish between financial and non-financial issues. A moral scandal would be just as devastating as a financial scandal to the credibility of the organization.

Faith Christian Church has been accused of encouraging the abuse of infants. Multiple remorseful parents and witnesses have come forward with public statements to this effect. If the ECFA is not investigating this aspect of the situation, then they are not adhering to the spirit of this guideline.  There is no universe where the child rearing practices described by former members should be tolerated in an ECFA member church.

In the eyes of many Mars Hill Church former members, the ECFA’s reputation was tarnished by their lack of transparency surrounding financial and leadership issues at the former mega-church. How the ECFA handles this situation will be  a major test of their credibility.

More Facts About Buying Animals from World Vision's Gift Catalog

WVGoatGiveNowTwo weeks ago, I wrote about World Vision’s gift catalog and their solicitation to purchase animals for needy families. Some readers were surprised to learn that a donation to buy a goat (or some other animal) does not of necessity lead to the purchase of a goat. Instead, World Vision’s spokeswoman, Amy Parodi,* told me that the money goes into a fund which helps support agricultural or other community based assistance for needy families. That support may or may not include the purchase of some animals.  To some readers, that was new information; others had always assumed something akin to Parodi’s explanation was true.
Since then, I have read more about animal donations and asked World Vision a few more questions. World Vision answered quickly and clarified some points. As it turns out, the organization doesn’t keep track of how many animals are purchased. More about that shortly.
In 2006, Jon Dennis in the US edition of the Guardian investigated claims that donors were buying goats for needy families. He wrote:

So is your money is going on a real goat? “No,” Oxfam spokeswoman Katie Abbotts told Guardian Unlimited’s Newsdesk podcast. “The public are buying into the idea that they’re buying a calf … We need to have the choice to buy the livestock most appropriate to a community, depending on their circumstances and local environment. So it might not be appropriate to buy a goat in some instances, but we’ve never made that a secret.”

Dennis interviewed an OXFAM representative who said information about the actual use of the funds was “in big letters” in their catalog. However, Dennis said the information wasn’t on the organization’s “shopping pages” but did appear elsewhere in OXFAM’s materials.
In 2011, the charity group GiveWell recommended against animal purchases, calling them “donor illusions.”  On the other hand, in 2008, the progressive New York Times columnist Nicholas Kristof favored the approach.
In 2010, filmmaker Christopher Richardson went to Africa to find his goat and recorded the experience in the documentary “Where’s My Goat?” Watch:
[youtube]http://youtu.be/OSYPowFlm7c[/youtube]
Although Richardson interviews those who don’t support the goat buying program, he seems upbeat about the program.
One thing is sure; I am not alone in my curiosity.
Back to my follow up questions for World Vision. I asked Parodi how much money was raised by the Gift Catalog and how many animals were purchased. I wanted to get some idea of how close the marketing was to the reality. Parodi gave me the jaw dropping numbers:

The catalog raised $33.7 million last year, $12 million of which was designated to animals. We don’t track how many individual animals are purchased each year. We used to track those numbers, but as the program has grown, the administrative burden became more than was worthwhile from a financial stewardship perspective.
As you can imagine, the reality of our programming in the field is much more complex and nuanced than simply giving a family an animal in isolation from other programs and services.

Actually, I probably can’t imagine it. My inability to understand the marketing versus what they actually do is why I asked.
My other questions (based on Parodi’s answers to the questions I reported in the first post) required a little additional research from Parodi and here is what she learned:

ME: Back to the goats/livestock program, it seems to me that you probably get more donations than needs for livestock. Is the excess what goes into the related agricultural projects expenses?
PARODI: To clarify, in the field, we don’t have “animal” programs. Rather, we have food security programs and livelihood programs.  In many of these programs, livestock are a tool we use to help families produce enough to eat and generate income for themselves. Programs that use livestock are eligible to receive funds from gift catalog animal donations.
Once those livestock-specific programs are fully funded, then any remaining funding is allocated to a group of economic development, agriculture and food security programs.  These programs qualify for animal money because they address the same development need that animals address – specifically, hunger and a lack of economic opportunity.
Once those programs are funded, if we have remaining animal money, we then hold the revenue for use by qualifying programs in the following fiscal year. This is a relatively rare occurrence though.  For example, last fiscal year, we had more $14 million in projects that met the criteria receive funding from animal revenue.  But we raised a little over $12 million in animal revenue.
ME: How much is sitting in a fund waiting to be spent on livestock and related agricultural projects?
PARODI: Nothing is sitting in a fund for any length of time.  In fact, really, money is given to the field to fund their programs before we’ve actually raised it. Before each fiscal year, our field staff submit proposals for the programs they want to run. Each fundraising office, including the U.S. office, reviews those programs, commits to fund a portion of those programs, and sends the money so that the field staff can begin (or continue) their work. Once the fiscal year begins, the fundraising offices raise resources to cover the funds they’ve already sent to the field.
I think most people understand that it makes no sense to just drop a goat – and only a goat – into a family’s lap. World Vision’s integrated programming helps families overcome hunger and poverty – and uses goats and other animals as a tool to accomplish that.  But there are times when animals aren’t the right tool. The items in the gift catalog give donors a glimpse into some of the tools that we use to make those programs happen, but the programs themselves include much more than just the items in the catalog.
All organizations that offer gift catalogs have to address the tension of helping their donors understand the needs and the best solutions without overcomplicating the conversation. We all need to honor the promises we make our donors – and we need to be careful not to promise something that we can’t deliver. You’ll find that most catalogs articulate similar language about how donations will be used.

Parodi says “most people understand that it makes no sense to just drop a goat — and only a goat — into a family’s lap.” I am not as confident as Parodi. In absence of a well-designed survey, I am not confident about “what most people know.” I can point out that a donor who donated based on a gift buying trip through World Vision’s website wouldn’t know any of what I now know.
wvwebsitegoatsSee for yourself. First click here (World Vision’s front page), then locate the Gift Catalog (link), then click “animals” (link), and choose any of the animals (e.g., rabbits), then go to your cart (link – should be something in there if you checked an animal). I went through the checkout process and found none of the information provided above on any of those pages.
You will however see this video about Jack and Isaiah:
 
[youtube]http://youtu.be/VODK55tS2XA[/youtube]
 
In the video, Jack buys a goat on his mother’s behalf and Isaiah gets a goat dropped into his family’s lap. Perhaps the video is not meant to be taken seriously, or maybe it intends to create a friendly myth, like the tooth fairy or Santa Claus. Someday Jack’s dad is going to read this blog and have to tell Jack the truth.
In my view, a better approach would be to provide this information to potential donors more directly so they can know the extent of the complexity of the situation. One of the naysayers in Richardson’s Where’s My Goat? documentary (about 2:36 into the video) said that the gift catalog is about “Western feel good, and not about serious development.” I understand her point and think there is a risk that the creative fiction could lull us into an ignorant satisfaction. I’m not sure it is good for us to think we have done our part via a gift donation at Christmas.
 
 
*Thanks to Amy Parodi for her kind and professional help in providing information and World Vision’s response for this post.
 
 

Pop Quiz: When You Buy a Goat from World Vision, Who Gets the Goat? UPDATED

Pop quiz, gentle readers.
When you donate money to buy a goat from the World Vision catalog, who gets that goat?
Answer in the comments section; base your answer on the screen capture of this online page from the World Vision website.
If you provide any more information about this appeal, please provide your source.
wvwebsitegoats
 
More to come this afternoon…
UPDATE:
I asked World Vision for an answer to this question. Amy Parodi, spokeswoman for the organization, told me:

When people purchase a goat from the World Vision gift catalog, their donation goes into a pool of money designated to purchase livestock and related agricultural projects, including goats.  Those animals are then distributed to families participating in World Vision animal husbandry programs in a variety of countries around the world.
We use the slightly broader categories because it’s nearly impossible to encourage the exact number of donations to match the exact need for specific animals in our programs, but it’s still critical that we honor our donors’ intentions with their gifts.
The “related agricultural projects” I mentioned above are efforts that help families care for the animals they’ve been given.  Providing watering sources, farming assistance, famine relief and other essentials help families truly benefit from their livestock.
If people want to give to a general fund, the World Vision catalog has an item called “Where Most Needed.”  These donations are placed into programs – in any country and within any sector of World Vision’s work – that are partially funded and need more resources to be fully operational.

I appreciate this answer. The one on the website is less clear than this.

We promise to honor your generosity and use your donation in the most effective way possible. The needs shown in this catalog reflect World Vision projects at the time of writing and the suggested donation amounts are based on periodic surveys of the countries we serve. Each item is representative of the gift category in which it appears and donations will be used to provide assistance where it is needed most within that category or to address a similar need.

The multiplying effect from grants and donated goods may change throughout the year on identical or similar offers due to variations in the start and end dates of donor grants and our programs.

Givewell.org calls an approach like this a donor illusion. Although I might not go that far, I can understand how some could be disillusioned when they thought they were buying an animal for a family. Many people I have spoken with believe that is what the promotion promises and that the fine print should be a bigger part of the promotion.
I am not saying the money goes into questionable places. I believe it is necessary to support the efforts with education and training. I do wonder how many animals are requested versus how many are purchased. And I wonder how much the Christmas push to purchase an animal raises as compared to how much is spent to purchase animals.  However, I do know that some people get animals and that much of the money does go into assisting needy people.
So if you thought you were buying an animal for a needy child/family, now you know some of the rest of the story.
Additional information:
You can also give nativity animals according to the print catalog. While I understand the explanation given by Ms. Parodi, I wonder if it is pushing it to ask, “What better way to celebrate the birth of Christ than to share those same animals so that families can prosper?”
NativityanimalsWV