June 2009

ARTICLE TOOLS

Find similar articles Print this article E-mail this page Bookmark this article

As affinity fraud continues to victimize Christian churches and organizations, signs are emerging that more believers are demanding accountability and oversight.

But these efforts may be too late for victims who invested funds with suburban Phoenix resident Edward Purvis, indicted in January for allegedly running a multimillion-dollar Ponzi scheme that promised riches while funding Christian causes. Or for Southwest Baptist University's nursing college, which is investigating a $500,000 embezzlement case that surfaced in March.

Such headlines may be one reason the Evangelical Council for Financial Accountability (ECFA) welcomed 40 new members during the first four months of 2009, twice the rate of last year's growth. The record 102 new members in 2008 boosted ECFA's rolls to nearly 1,400 organizations. "Being up over our best year in 20 years is a good sign," said president Dan Busby.

Growing membership isn't the only sign of interest in better fiscal controls. John Van Drunen, ECFA's director of compliance, said many smaller organizations are outsourcing financial management or hiring accounting firms in an effort to reduce embezzlement and fraud.

Nor is concern limited to micro-sized ministries. The Lausanne Committee for World Evangelization plans to review ecclesiastical crime at its 2010 congress in Cape Town, South Africa.

In late April, Van Drunen addressed two dozen members of the Lausanne Resource Mobilization Working Group, which promotes generosity and improved use of resources in the worldwide church.

"We want to create awareness and reduce the significance of the amount of leakage going to ecclesiastical crime," said group member Ron Ensminger, a partner in the Strategic Resource Group of Easton, Maryland. "It could be anywhere between $27 million and $27 billion. We know there's significant leakage that's harmful to the kingdom."

The $27 billion figure comes from Todd Johnson, director of the Center for Global Christianity at Gordon-Conwell Theological Seminary in South Hamilton, Massachusetts. This estimate is $11 billion higher than it was in 2001.

"This is present in every corner of the world," said Johnson, who has been following a Scandinavian investment fraud that cost believers there millions of euros. "Christians are not alert enough. A good part of it is poor financial practice."

A report last year by the Association of Certified Fraud Examiners showed that 39 religious, charitable, or social-service organizations were victimized in 2006 and 2007, with a median loss of $106,000. Problems with internal controls were responsible for three of every four cases, the report said.

Christians have become prime targets, Van Drunen said. "When somebody represents themselves as being involved in kingdom work, there's an automatic sense of trust."

San Diego pastor Barry Minkow, who runs the Fraud Discovery Institute, claims to have uncovered 23 scams in the past four years. Most have been cases of affinity fraud, where promoters ingratiate themselves with members of churches, ethnic groups, or professions.

In an alleged $8 billion fraud carried out by the Stanford International Bank (SIB), officials reportedly used prayer and Scripture verses to hype the bank's above-market-rate CDs.

SIB founder R. Allen Stanford and chief financial officer James Davis were roommates at the Baptist-affiliated Baylor University. Baylor faculty members encourage students to think holistically through issues of faith and values when it comes to decision-making in the marketplace, said Baylor's business ethics professor Mitchell Neubert. "But there are always going to be a few who miss the message."

Copyright © 2009 Christianity Today. Click for reprint information.

Christianity Today has more stories on money & business, including:

The Fraudbuster | The faithful are being defrauded of billions. But this Ponzi-busting ex-con knows how to stop it. (December 17, 2004)

Fools' Gold | Christians lured into buying 'rare' coins. (July 1, 2004)

Fraud: Financial Warfare scam targets black churches. | Feds crack down on Financial Warfare Club (December 9, 2002)

				Try 3 Issues of Christianity Today RISK-FREE! Name Street Address City/State/Zip E-mail Address No credit card required. Please allow 4-6 weeks for delivery. Offer valid in U.S. only. Click here for International orders. If you decide you want to keep Christianity Today coming, honor your invoice for just $19.95 and receive nine more issues, a full year in all. If not, simply write "cancel" across the invoice and return it. The trial issue is yours to keep, regardless. Buy 1 gift subscription, get 1 FREE!

Subscribe to the FREE CT Newsletters Get CT headlines direct to your mailbox! CTDirect (daily) CTWeekly    RSS Feed   RSS Help