K-LOVE’s Pledge Drive: Money Behind the Music

The Christian radio empire K-LOVE (find a station near you) is in the middle of their Spring Pledge Drive. To be blunt, the constant solicitations are annoying.

After hearing a claim recently that K-LOVE’s CEO Mike Novak’s salary is over half a million dollars, I decided to do some exploration of K-LOVE’s finances. K-LOVE is one of two radio enterprises run by Educational Media Foundation (Air One is the other). Because EMF is a non-profit, their finances are available via their 990 form. The organization is quite large and took in just over $152-million during 2014.

Concerning the salary claim, it is true that CEO Mike Novak got a hefty sum of $531,256 in 2014. Numerous employees, including one of the DJs got over $200k in compensation. K-LOVE pushes an “easy” giving level of $40/month on the air and their website. It takes 1107 people making that monthly pledge just to pay Novak’s salary. By comparison, the executive director of Doctors Without Borders, Sophie Delaunay, got just over $160k for running an organization that took in twice what K-LOVE received in donations.

K-LOVE also spent $267,463 on “pledge drive coaching.” The return on investment was phenomenal in 2014 in that they raised over $32-million attributed to the effort.
KLOVE Coaching
As annoying as the gimmickry is, it is apparently quite successful.

Are Board Members Paid?
In reviewing K-LOVE’s claims about their finances, I found one claim to be technically true but misleading. On their website, K-LOVE says:
KLOVE Finances
K-LOVE claims that the Board of Directors at large serve without compensation. While it is true that the 2014 990 form doesn’t report any income paid to non-staff board members, CEO Mike Novak is one of the board of directors and is well compensated. However, readers wouldn’t know that by reading the website. The website description makes it seems as though none of the board members get paid. When one looks at the list of board members on K-LOVE’s website, at large members are not identified.

K-love leadership
The 2014 990 identifies CEO Novak as a salaried board member:
KLOVE Board 990
Does K-LOVE Need Your Money?
K-LOVE’s net revenue over expenses for 2014 was over $64-million. At $40/month, that means 133,761 donors could have given their money elsewhere and K-LOVE would have covered operational expenses. While it clearly takes lots of money to run a high quality media operation, it may come as a surprise to donors who sacrificially give $40/month that K-LOVE is doing quite well financially.

I am not saying that K-LOVE is doing anything wrong (although I think they could make it more clear that staff board members are handsomely paid). My intent is simply to provide potential donors with information that is not provided by K-LOVE. It may be that your local church or food pantry needs that money more than this mega-station.

Top Ten Posts in 2015

The ten top posts during 2015 are as follows with the most popular first:
1. Open Letter to Gateway Church Pastor Robert Morris from a Former Member of Mars Hill Church – This was posted on November 2, 2014 but remained popular throughout 2015. Driscoll recently joined Jimmy Evans as a director to form The Trinity Church in Phoenix.
2. Former Chief Financial Officer at Turning Point Claims David Jeremiah Used Questionable Methods to Secure a Spot on Best Seller Lists – This story about David Jeremiah’s questionable tactics from a former insider was a scoop but not one which stuck to Jeremiah like  a similar scandal did to Mark Driscoll.
3. Hillsong’s Brian Houston Interviewed Mark and Grace Driscoll After All (VIDEO) (AUDIO) – First, he said he would interview Driscoll, then he said he wouldn’t, then Brian Houston aired an interview with Mark and Grace Driscoll. It was great theatre but didn’t draw good reviews from former Mars Hill leavers.
4. A major study of child abuse and homosexuality revisited – This post from 2009 is one of the most popular articles in the history of the blog. In it, I demonstrate a key mistake in a journal article often used to link homosexuality and child abuse.
5. Southern Baptists Say Enough to Perry Noble and NewSpring Church – I am surprised that this post got so much attention.
6. Gospel for Asia Faces Allegations of Misconduct; GFA Board Investigation Found No Wrongdoing – The GFA story received the most attention from me this year.
7. Pastor of Willow Creek Presbyterian Says Church Reaction to Hiring Tullian Tchividjian is “Overwhelmingly Positive” – I briefly covered Tullian Tchividjian’s comeback as a development minister at a PCA church in FL.
8. A Few Thoughts on The Village Church Controversy – Village Church’s leadership apologized for their response to a young woman who sought a divorce from her husband who had admitted having child porn.
9. Hillsong Founder Brian Houston Issues Statement On Mark Driscoll at the Hillsong 2015 Conference – Mark Driscoll’s return to the spotlight garnered much reader attention.
10. Gospel for Asia’s K.P. Yohannan and the Ring Kissing Ritual – While the financial scandals were of interest to readers, this article ranked higher than the money problems.
To fully capture activity on the blog, one should consider the Gospel for Asia scandals (Patheos considered my coverage as a part of one of their top ten Evangelical stories of 2015).
It has been a good year and I thank my readers and those who support the blog with their comments and regular visits.

Gospel for Asia, and the $9 Million Interest Play

In note H of GFA’s 2013 audited financial statement,  GFA describes a $9 million transfer to India to take advantage of what is described as “favorable interest rates” (see the last paragraph in the image below).
GFA Related Party Transactions 2013
The Indian FC-6 forms requires NGOs to report the amount of foreign contributions received and the amount of interest made on those contributions. It appears that GFA in India made about 6% on contributions in 2011-2012.  According to the Bank of India, the benchmark interest rate peaked at 8.5% during the period.


source: tradingeconomics.com

While 6-8.5% sounds high compared to U.S. rates, the unfortunate thing about the move is the fact that Indian rupee continued to weaken. On August 15, 2011, one rupee was worth .02177 cents. By December, the rupee had declined to .01816. By August of 2012, the decline continued to .01796. The financial statement doesn’t say when the money was returned but even if it was January 2012 (.01889), GFA lost just over 13% due to currency devaluation.

Kevin Hagan Says Good-Bye to Feed the Children; Travis Arnold is Interim CEO

In a May 27 tweet, Kevin Hagan posted a link to an article announcing his departure from Feed the Children. According to Hagan, who takes over at the American Diabetes Association tomorrow, he has helped restore some of the positive reputation lost by the massive charity over the past several years.


According to a tweet from Hagan, Travis Arnold, current COO of FTC will take over as Interim CEO. Arnold is also the president of FTC’s wholly owned subsidiary FTC Transportation, a for profit company.
FTC has been embroiled in controversy for much of the last six years. After multiple scandals involving FTC founder Larry Jones, he was relieved of his post in 2009. Even after he was fired, scandal over use of funds continued (e.g., here and here).
In his May 29 article, Hagan takes credit for restoring FTC to a more respected place, along with numerous other accomplishments.
The organizations donations, although still substantial, have been on a decline according to the organization’s 2013 990 form. Revenues are down from a high of just over $615 million in FY 2011 to over $396 million in FY 2013.
Especially given the organization’s recent history, it seems questionable to have the same person running both the non-profit FTC and the for profit trucking subsidiary. FTC’s conflict of interest policy is not available to the public according to the federal 990 form for fiscal year ending 2014.