feature feature feature feature president’s …there are many reasons why ecfa’s web traffic is...

Second Quarter 2007

THE

President’sPen

by Ken Behr

continued on page 2 ➤

One Lifeat a Time

I recently had the opportunity toattend a Christian conference onorphan care and adoption.This extraordinary gathering of

like-minded organizations, churchesand individuals addressed the prob-lem of the more than 143 millionorphans worldwide, many of whomare the result of the AIDS crisis.

A verse from Scripture wasquoted repeatedly at this symposium.It was “Pure and undefiled religion inthe sight of our God and Father isthis: to visit orphans and widows intheir distress, and to keep oneselfunstained by the world” (James 1:27).

Religion itself is often malignedin public. And I have to confess, I’mnot a big proponent of religion. Thatseems like quite a harsh comment,coming from someone in service inour community, working with ECFA.But that’s because I recognize thatEvangelical Christianity is more arelationship with God, our Father,through Jesus Christ. Still, whatbetter way to get to the heart of pureand undefiled religion than bychanging the life of a child?

F E A T U R E F E A T U R E F E A T U R E F E A T U R E

Y ou may have already droppedby ECFA’s newly designedwebsite. The new site—yes,it’s still the familiar URL:

www.ECFA.org—combines the for-mer ECFA websites for the donorpublic and the members. The ECFAwebsite is simply a tool to serveECFA members, charities that maybecome a member in the future, andthe donor public.

Web visitors are coming to theECFA website at a record pace.There are many reasons why ECFA’sweb traffic is skyrocketing:

• Evangelical donors are looking

for information about ECFA

members. They equate the ECFAsymbol with integrity. This is the rea-son many donors visit the ECFA siteeach month—to learn whether acharity being considered for a gift isamong the 2,000+ organizations cur-rently accredited by ECFA.

• Churches and other evangeli-

cal charities want to learn how to

demonstrate integrity. There is anincreasing desire by ECFA membersand nonmembers alike to understandand comply with ECFA’s Standards ofexcellence. Organizations may studythe comprehensive commentariesthat support each Standard. Plus,ECFA’s Best Practices (developedseparately for churches and othercharities) challenge organizations togo beyond ECFA’s Standards to evenhigher levels of excellence.

• Nonprofit staff members are

seeking current information to

assist them. The rapidly changinglaws, regulations and climate in thenonprofit world create a challengefor the staff of ECFA members to staycurrent. ECFA provides nonprofitinformation in a number of ways:

■■ Policies, procedures and

explanations. Click on ChurchInformation Central or NonprofitInformation Central on ECFA’s homepage and you will find a wealth ofinformation. There are hundreds of

documents spanning many topics—everything from board governance tospecial event fund-raising, from hous-ing allowances to unrelated businessincome. Policies and procedures are inWord documents so you can easilycopy and modify them to meet your

‘‘Visitors are coming to theECFA website

at a record rate.’’

✔ Why Should You Care AboutTrademarks? p. 3

✔ Fraud in Ministries: How to Respond p. 5

✔ Recent Developments p. 7


One Life at a Time– from page 1

ECFA Launches Expanded Website– from page 1

It is this very notion of “pure andundefiled religion” that sums up whatECFA is all about. To function in thisworld, we must use worldly things; weneed the gifts of our donors to keepour programs going, to keep our doorsopen. But if we do not treat these giftsas the precious gems they are, we willfall short of our goal in the eyes of God.

The greater the power somethinghas, the greater the possibility of mis-use. Because money is such a power-ful resource, we have to be conscien-tious in harnessing its use, and thereis always a chance that funds can bemishandled in some way or another.

Our members’ ministry causes arenoble endeavors, and in the pursuit ofreaching as many of the flock as pos-sible, such mishandlings can occur.Toward that end, ECFA’s SevenStandards of Accountability providethe guidance needed. These simplerules can help ministries and churches“keep themselves unstained by theworld” and thereby focus on the “wid-ows and orphans in their distress.”

Orphan care, like other ministries,is accomplished one life at a time. Eachchild’s life will be changed by someonewho will care enough to get involved.

One of the most remarkable out-comes of this conference was actu-ally the coming together of so manyfor such an overwhelming cause.Some of the largest ministries andchurches were assembled, somethingthat simply doesn’t happen oftenenough: representatives of churchesand nonprofits to gather to addressissues of Kingdom importance.

One special person I met was awonderful woman named Augusta.Augusta’s whole heart is for the orphan.She has worked unceasingly with herorganization over the years to encour-age American Christian couples toadopt Chinese orphans. She has helpedplace more than 800 children in homesin the U.S. and Canada: children of Godwho needed someone to protect them,teach them, care for them, love them.

Can one person actually make adifference? In Augusta’s case, it cer-tainly did—more than 800 times, onelife at a time.

2

needs. You may need to consult anattorney, CPA or other professional;ECFA is not providing professionaladvice—merely providing a startingpoint for your research of a topic.

■■ Questions and answers. Youdon’t have time to read an entire doc-ument to find your answer? Then thehundreds of questions and answersmay just be your ticket. Every timeyou visit the website, you will see adifferent question featured on thehome page.

■■ News. Check the “In The News”section of the website each day andyou will find the latest news from theChristian nonprofit world and beyond.Just click the summary of a news itemand get “the rest of the story.”

■■ Featured articles. On theright side of the home page, you willfind a listing of featured articles. Youmay find an in-depth review of a par-ticular current issue or one of mostrequested articles that have appearedin FOCUS on Accountability.

■■ Back issues of FOCUS on

Accountability. For those looking foran article that appeared in a back issueof FOCUS on Accountability, severalyears of back issues are available onthe website.

• Nonprofits often are looking

for the right professional to pro-

vide assistance. ECFA is buildingwhat promises to be the most com-prehensive directory of professionalsproviding services to churches andother charities. Already the contactinformation is available for hundredsand hundreds of CPAs, attorneys,human resource consultants, webdesigners, and more.

Maximizing your use of the

new website. If you are withan ECFA member organiza-tion, how can you get the bestuse from the site?

• Be sure your member

information is up-to-date.

If a visitor to the ECFA web-site navigates to your mem-ber website, you want thedescription of your activities

E C F A F O C U S O N A C C O U N T A B I L I T Y / S E C O N D Q U A R T E R 2 0 0 7

Published quarterly by ECFA (Evangelical Council for Financial Accountability)

Ken Behr, PresidentDan Busby, Vice President and Managing Editor

440 West Jubal Early Drive, Suite 130, Winchester, VA 22601

Telephone: 540-535-0103 • 800-323-9473Fax: 540-535-0533 • Email: [email protected]

www.ECFA.org • www.ECFAmembers.org

to be accurate. Check the link toyour website to be sure it is current.The email address on your memberprofile page must be accurate toenable visitors to email you. An inac-curate email address could mean lostcharitable gifts.

• Provide us a picture relating to

your organization. Each time a vis-itor comes to the ECFA home page, adifferent ECFA member is featured in the upper left hand corner of the page. If you provide us with aphoto representing your organization(preferably one which includes peo-ple), your photo will appear with yourorganization’s name.

• Send us an electronic file of

your audit report and Form 990.

Consistent with principles of trans-

parency, many ECFA members pro-vide a PDF file of their audit andForm 990 (if the organization is a 990filer) to ECFA. These documents arethen linked to your member profile,making it easy for a visitor to theECFA website to locate them.

• Link your website directly to

your member profile page on the

ECFA website. With a simple link toyour member profile page, you pro-vide a path for visitors to your web-site that confirms your compliancewith ECFA Standards.

More innovations coming for the

website. What is coming in later

‘‘‘The ECFA site will soongive you more space to

promote your organization.’’


3

Most people recognize the valueof trademarks in for-profit busi-ness. For instance, the Coca-Cola® trademark is estimated

to be worth nearly $70 million. And askany four-year-old child in the UnitedStates what the “Golden Arches” standfor, and he will instantly shout out thecorrect answer. But what is the valueof trademarks for Christian charities?Do nonprofits need to worry about pro-tecting their trademarks?

Contrary to common misconcep-tion, trademarks are just as importantto nonprofits, including Christian char-ities, as they are to for-profit com-panies. Although nonprofit “brands”may never be worth as much as a Coca-Cola® or McDonald’s® trademark indollar value, they can be just as crucialto a nonprofit as they are to for-profits.

Why are trademarks important

for ministries? Trademarks areimportant to Christian charities,church networks, and other nonprof-its for a number of reasons:

• Trademarks embody the

goodwill and reputation of an

organization. The goodwill and repu-tation of an organization and its pro-grams and products take years ofhard work, strategic development,and investment to establish. Thisgoodwill and reputation is key toyour mission. For instance, the pub-lic judges the quality of services andthe credibility of teachings from anorganization on the goodwill andreputation of the source of the ser-vices or teaching materials. Failure toproperly protect a trademark canweaken your organization’s trade-mark rights or make the mark vulner-able to challenge by others.

• Trademarks enable a charity

or church network to maintain

doctrinal integrity. In the Christian


community, people need to knowwhether an organization’s underlyingdoctrines and beliefs are trustworthyand in line with their own beliefs.Trademarks help the public toassociate a name with certain beliefs.For example, many churches todayare part of church networks or associations, instead of traditionaldenominations.

Protecting the names of those asso-ciations as trademarks is an importantmeans of maintaining doctrinalintegrity within those associations.Individual churches whose teachingsstray from the core beliefs of thewhole network can be compelled to

cease using the association’s name ifthe name is properly protected.

Similarly, a large national min-istry with local chapters can compelchapters that stray from the min-istry’s mission to cease using theministry’s name if the name is prop-erly protected. Failure to protect theassociation or ministry name canlead to bitter disputes about the rightto use the name.

• Trademark protection can

prevent deliberate infringement

or tarnishing of an organization’s

name. Sometimes Christian charitieshave detractors who deliberatelyseek to tarnish the ministry’s name.Proper trademark protection canhelp prevent such tarnishment. Forexample, in 1997, an individualopposed to the group Jews for Jesusset up a website using the “Jews forJesus” name, deliberately trying todraw people away from Jews forJesus. This website directed viewers

‘‘Goodwill and reputation is keyto your mission.’’


by Nancy Oliver LeSourd and Kenneth E. LiuAll four nominees for the ECFABoard of Directors were elected

for three-year terms with an over-whelming vote.

ECFA welcomes new boardmember:

Mark Holbrook, Presi-dent/CEO of EvangelicalChristian Credit Union,Brea, California, began hiscareer with ECCU in 1975,

shortly after graduating from BiolaUniversity. He was named to the topmanagement position in 1979. Markserves as a teaching elder at GraceChurch and has served as BoardChairman for Christian ManagementAssociation.

Returning to the ECFA Board for a sec-ond three-year term are:

Michael Little, Presidentof Christian BroadcastingNetwork, Virginia Beach,Virginia, is a 30-year vet-eran of The Christian

Broadcasting Network. His rolesincluded supervision of television pro-ductions, marketing, creating pro-grams, and oversight of humanitarianaid projects. He has previously servedon the ECFA Board as well as theNational Religious Broadcasters board.

Dolphus Weary is Execu-tive Director of MissionMississippi in Jackson, aracial reconciliation move-ment that encourages

unity in the Body of Christ acrossracial and denominational lines. He isan author and frequent speaker at var-ious local and national conferences.

Wes Willmer is VicePresident of Advancement,Biola University, La Mirada,California. Over a distin-guished 32-year career in

Christian higher education, Wes hasbecome a nationally recognized expertthrough his study of nonprofit/faith-based management practices. He is aprolific author and commentator onChristian faith and finances.

Why Should You Care about Trademarks?– from page 3


to another website that attempted toshow people “how the Jews for Jesuscult is founded upon deceit and dis-tortion of fact.” By enforcing its fed-erally registered trademark, Jews forJesus successfully stopped the indi-vidual from continuing to tarnish itsorganizational name.

• Adequate trademark protec-

tion prevents public confusion.

Without strong trademark protec-tion, other organizations may inten-tionally or unintentionally use aname similar to your organization’s,leading to confusion among the pub-lic. This can also lead to a damagedreputation or misdirected donations.For Christian charities, public confu-sion can also lead to a public rela-tions nightmare.

• Trademarks generate rev-

enue. Public recognition of a non-profit’s “brand” identity is key to theorganization’s revenue stream. Non-profits rely on public donations to cre-ate and fund their program servicesand products. Program fees and prod-uct sales generate additional revenues.Strong, well-protected trademarks foran organization, its programs, ser-vices, and any products it develops tosupport its programs enhances publicrecognition and appreciation of theorganization and its mission.

• Licensing. More and more non-profits are discovering that licensingtheir well-known trademarks can bean excellent supplemental revenuesource, as well as another means ofdeveloping goodwill among the pub-lic. Having a well-negotiated licenseagreement is key to protecting thelicensed mark. A strong license agree-ment is also crucial when permittinglocal and international affiliates touse your marks.

What Can Ministries Do to Protect

Their Trademarks? Charities shouldtake the following steps to protecttheir trademarks:

1. Conduct trademark searches

prior to use. Prior to adopting a newtrademark, an organization shouldhave an experienced trademark attor-ney conduct a trademark search to

determine if the proposed mark isavailable. No organization wants toinvest money and time building upgoodwill in a new name for a valuableprogram or product, only to discoverlater that the name infringes a priortrademark. Conducting a search of anew mark can alert you to problemsbefore valuable time and money isspent developing the mark. Keep in mind that trademarks are not onlyorganizational names, but alsoinclude:

• logos and symbols• program names• acronyms• slogans • names of publications

2. Register your trademarks.

In the United States, trademark own-ers are granted some limited commonlaw rights immediately upon actualuse of a mark. However, registration

of a mark with the U.S. Patent &Trademark Office entitles the ownerto significant legal benefits, including:

• automatic nationwide protec-tion of the mark,

• a presumption of validity andownership of the mark,

• the right to use the registered® trademark notice symbol,

• enhanced ability to stopinfringers,

• greater potential for obtainingmonetary damages from infringers.

A trademark attorney who regu-larly represents Christian organiza-tions should assist you in registeringyour marks. A well-drafted descrip-tion of goods and services sets theparameters of the protection of afederally registered mark. Attorneysexperienced in assisting Christianministries will better understand theneeds of your organization and thusbe better able to draft trademarkdescriptions specifically tailored toyour organization’s activities.

3. Use the proper notice sym-

bols. Prior to registration, a trade-mark should be tagged with the (™)symbol. This symbol alerts the publicto your claim to a mark. After regis-tration, a mark should be tagged withthe registered (®) symbol. This sym-bols alert the public to your federallyregistered trademark rights.

4. Always enter into written

license agreements with those

whom you permit to use your

marks. Often nonprofit organizationspermit affiliated entities, local chap-ters, or foreign affiliates to use theirmarks. A well-drafted formal licenseagreement will spell out the termsand conditions under which the chap-ter or affiliate can use the mark.

A license agreement is an impor-tant means of preserving theintegrity of your mark in the event ofa dispute with the affiliate. Forinstance, if a local chapter of yourorganization decides to engage inactivities contrary to the mission orpolicies of the head office, revokingthe trademark license may be thebest means of preventing the roguegroup from tarnishing the reputationof your organization. Also, failure toadequately control the use of a markcan result in the weakening, andeventually, the complete loss ofrights in the mark.

5. Monitor your marks and

pursue infringers. Once your orga-nization uses and/or registers a mark,it should be on the lookout for infring-ing uses of the mark by others. Forkey marks, you may wish to considersubscribing to professional trade-mark “watch” services that monitorfor confusingly similar marks.

Once you are aware of marks thatare confusingly similar to your orga-nization’s marks, consult a trade-mark attorney for help in stoppingthe infringing use. Failure to stopinfringing uses of the mark can resultin the weakening, and eventually, thecomplete loss of rights in the mark.More importantly, infringing usescan lead to public confusion anddamage to your organization’s good-will and reputation.

4 continued on page 5 ➤

‘‘Without strong trademark protection, organizations

may use a namesimilar to yours.’’


• Affiliation with professional associations• Directly relevant prior experiencegained through similar assignments,whether as technical advisor orexpert witness• Special status or access to privi-leged information peculiar to the caseat hand, which renders the individualan expert2

There must be proof. Whomever youchose must be able to provide the fol-lowing proofs to demonstrate that afraud has occurred:• Intent – the accused committedthe act knowing it was wrong.• Misrepresentation – the accusedmisrepresented key aspects of thetransaction to the victim.

• Reliance – the victim relied on themisrepresentations of the accused.• Loss – because the victim relied onthe intentional misrepresentations of the accused, financial lossesresulted.3

Respond to the revelations. A suc-cessful investigation will allow theorganization to do four things inresponse:1. Qualify and quantify the loss.

The first item of business for theinvestigator will be to determine anddocument how much was taken fromyour organization.2. Identify the perpetrator(s). Anatural by-product of the investiga-tion will be to confirm or disprovethe suspicion of a potentially dis-honest person who has access toyour organization’s resources. Theinvestigation might point clearly to

So, despite yourbest efforts toavoid being a vic-tim of fraud, you

have uncovered whatappears to be a major

loss of assets from your organization.Now what?

Initiate an investigation. An inves-tigation of some type is always nec-essary to determine first if what youhave discovered is a crime or simplythe result of mistake, ineptness, orincompetence.1 The choice of compe-tent individuals to investigate fraud is a key decision. The investigationcan be internal (by the organization’semployees) or external (by outsideexaminers), but the investigatorsmust be competent to perform afraud examination which will hold upin court, if necessary.

If you choose to use an outsideexpert, you may want a CPA or a CFE(Certified Fraud Examiner). Use thesequalifications you can use to establisha likely, competent candidate:• Professional licensure, certifica-tion, or registration by a recognizedprofessional body in the field • Undergraduate, graduate, and post-graduate academic degrees that areeither in the field of expertise or serveas a suitable background to it• Specialized training and/or contin-uing professional education beyondacademic degrees that indicate up-to-date familiarity with the latest techni-cal developments • Having published writings thatdisplay technical opinions and areavailable as part of the general bodyof knowledge • Any teaching, lecturing and/orother consultancies that indicate thathe or she is held in high professionalesteem

5

‘‘The choice of competent individuals to investigatefraud is a key decision.’’

by Rufus Harvey


Conclusion. Christian charities andchurch networks often overlook theimportance of trademark protec-tion—until a problem arises. Themost cost-effective time to get qualitytrademark advice is in the earlystages of creating a new organiza-tional name or launching a new pro-gram, service or product. In the earlystages, potential problems can beidentified and corrected cheaply. Bythe time a new trademark is in use, itmay be costly to discover that a markcannot be registered or conflicts withanother organization’s mark. Takingearly steps to protect your organiza-tion’s marks will help ensure theintegrity of the organization’s good-will and reputation.

Nancy Oliver LeSourd ([email protected])

and Kenneth Liu ([email protected]) are

intellectual property attorneys with

Gammon & Grange, P.C. (www.gg-

law.com), a law firm serving Christian

charities and other nonprofit organiza-

tions throughout the United States.

Why Should You Care about Trademarks?– from page 4

ECFA Launches Expanded Website– from page 2

versions of the ECFA website? Hereare just a few things to look for inthe coming months:

• Space for more information

about your organization. TheECFA site will soon give you morespace to promote your organization,including programs for which fundsare being raised. You will be able tolink from your member profiledirectly to stewardship pages on yoursite, for example.

• Salary survey information. Withthe click of your mouse on a map ofthe United States, you will be able toview salary data by annual revenuerange for organizations, by type, andby region of the country.

Click to maximize. Obtain the max-imum benefit from the new ECFAwebsite. As you use and promote theECFA website, the value of yourECFA membership increases.

Fraud in Ministries– from page 5

6


2 G. Jack Bologna and Robert J.Lundquist, Fraud Auditing and ForensicAccounting: New Tools and Techniques,Second Edition (New York: John Wiley &Sons, Inc., 1995), 208.3 Joseph T. Wells, Encyclopedia of Fraud(Austin, TX: Obsidian Publishing, 2002),431-432.4 Russell L. Bintliff, White Collar CrimeDetection and Prevention (EnglewoodCliffs, NJ: Prentice-Hall, Inc., 1993), 21-22.5 Ibid.6 Gary S. Green, Occupational Crime(Chicago: Nelson-Hall, 1990), 238-239.

Rufus Harvey is the Controller and CFO

of Grace to You, the radio ministry of Dr.

John MacArthur. He is also in private

practice as a Certified Fraud Examiner

and Enrolled Agent. He may be reached

at [email protected].

Ten ECFA regional seminars areplanned for 2007 – five are

scheduled for the last half of theyear. The seminar topic will be“Accountability for EvangelicalMinistries”:

• September 11 Seattle, WA

• September 13 San Jose, CA

• October 25 Columbus, OH

• November 1 Charlotte, NC

• November 8 Phoenix, AZPlan now to join your col-

leagues in ministry for a member-benefit, no-cost, day-long seminar(9 a.m. – 3 p.m.) conducted by KenBehr, ECFA’s President, and DanBusby, ECFA’s Vice President.These sessions will provide anoverview of the nonprofit commu-nity from ECFA’s unique vantagepoint, including recent tax, finance,and current legislative develop-ments as well as a special emphasison board governance issues—all inan evangelical context.

Reserve your space by register-ing at www.ECFA.org.

• adverse publicity• legal costs• decline in organizational morale6

Once the case is proven, people inleadership of churches and Christiancharities are often reticent to takedecisive action against one who hasdefrauded their organization. In mycareer as a fraud examiner, I haveworked cases where the organiza-tion chose everything from theproverbial “throwing the book”legally at the offender to doingabsolutely nothing, and variousactions in between. Why is this?

Each ministry will be faced with aunique variety of circumstances toconsider:• the attitude of the offender• the culpability of the organization

(poor internal controls, etc.)• the magnitude of the loss• the publicity of the matter• organizational or denominational

policy• doctrinal or biblical perspectives

All believers can agree with theexplicit command in Exodus 20:15,“You shall not steal.” Most of usunderstand Paul’s warning inRomans 13, “For rulers are not acause of fear for good behavior, butfor evil. Do you want to have no fearof authority? Do what is good and youwill have praise from the same; for itis a minister of God to you for good.But if you do what is evil, be afraid;for it does not bear the sword fornothing; for it is a minister of God, anavenger who brings wrath on the onewho practices evil” (vv. 3-4, NAS).

The difficulty comes in discern-ing when a particular situation war-rants mercy from the consequencesof a particular sin, due to the uniquecircumstances involved. Perhaps thebest solution to that dilemma is tofollow the prescription of James 1:5,“But if any of you lacks wisdom, lethim ask of God, who gives to all gen-erously and without reproach, and itwill be given to him.”1 Howard R. Davia et. al., ManagementAccountant’s Guide to Fraud Discoveryand Control (New York: John Wiley &Sons, Inc., 1992), 156.

the actions of one individual whileexonerating another. A thoroughinvestigation will expose the culpritbut protect the innocent.4

3. Stop the loss. The investigationwill also become a sound basis fordeveloping effective countermeasuresto stop the fraudulent activity and pre-vent its recurrence.5 The organizationwill certainly want to remove anyknown perpetrator of fraud from aposition of access to the organization’sresources. Internal controls associatedwith the loss should be carefully exam-ined and adjusted to prevent futurelosses. In most cases, simple changescan provide excellent protection:• Require two signatures on every

check.• Institute dual custody of all funds

from initial receipt until deposit inthe bank.

• Have bank and investment state-ments sent to a person who does nothave accounting and investmentresponsibilities.• Have someone other than the per-

son writing checks reconcile the bankaccount.• Run a background check before

hiring anyone to handle organizationresources.4. Deal with the perpetrator(s).

This is certainly the most sensitivearea of response to a fraud. The ethical and legal choices are obviousand include:• terminating the offender• filing criminal charges• pursuing a civil lawsuit• implementing biblical church

discipline (see Matthew 18:15-18)The business decisions are less

obvious and often are best madewith the assistance of competentlegal counsel. Among the potentialconsequences that must be carefullyconsidered are:

‘‘Determining how to deal with a fraud perpetrator

is often challenging.’’

7

ECFA is

ON THEROADON THEROAD

July 11-15 National Association of ChurchBusiness AdministrationDallas, TXKen Behr

Sept. 14 Mennonite Brethren ChurchWorkshopFresno, CADan Busby, Presenter

Sept. 17 Denominational InvestmentLoan Association AnnualMeetingDenver, CODan Busby, Presenter

Sept. 19-21 Care Net ConferenceLouisville, KYDan Busby, Presenter

Sept. 27-29 IFMA 2007 MissionAdministration SeminarMinneapolis, MNDan Busby, Presenter

Oct. 6 Northwest Nazarene UniveristyNampa, IDDan Busby, Presenter

Oct. 23 Capin Crouse NonprofitWorkshopBrea, CADan Busby, Presenter

Nov. 6 Mennonite Brethren ChurchWorkshopWichita, KSDan Busby, Presenter

Nov. 18 Christian Leadership ForumAtlanta, GAKen Behr, Presenter

• IRS investigates possible

abuses involving noncash contri-

butions. The IRS is looking intotransactions typically involving realproperty subject to a long-term leasethat is purchased through a tier ofclosely held flow-through entitiesowned by a group of investors. Afterabout a year, the remainder interest inthe property is contributed to anexempt organization at an apparentlyinflated value. The donor reacquiresthe donated interest from the charitytwo years later at a significantly lowercost. At issue is whether the charita-ble deductions that have been claimedare proper and the charities’ roles inreceiving the donations.• IRS releases an initial report on

Nonprofit Executive Compensa-

tion. On March 1, 2007, the IRS issuedits initial report on its executive com-pensation project involving some2,000 nonprofit organizations. • Public disclosure of Form 990-T

guidance provided. Under thePension Protection Act, organizationsmust disclose any Form 990-T filedwith the IRS after August 17, 2006(Notice 2007-45). An organization thatfiled a Form 990-T solely to request arefund of the federal telephone excisetax is not required to make the formavailable public inspection.• “Do Not Mail” bills becoming a

trend at the state level. NorthCarolina has become the 15th state tohave a bill introduced in its state leg-islature that would establish a “DoNot Mail” registry for consumers.While the bills are not uniform, theygenerally call for the creation of a reg-istry through which consumers cansign up and prevent the receipt ofunsolicited mail. Some of the billsprovide an exemption for mail sent by501(c)(3) organizations.

• The Public Good IRA Rollover

Act of 2007. S.819 and H.R.1419 havebeen introduced to expand and extendthe current IRA rollover legislation.The bills would make all charities eli-gible recipients, increase the eligibilityage to 701⁄2, and gifts would not have anexpiration date. Unless Congresswaives its own pay-as-you-go rules,they must come up with funds toextend the current IRA rollover provi-sions beyond December 31, 2007.• Changes to health plans likely in

2008. While health benefits have stabi-lized, rising 8.5 percent in 2005, 8 per-cent in 2006, and 8 percent this year,according to the National BusinessGroup on Health (NBGH), the TowersPirin consulting group pegs the aver-age cost per employee at $8,748.

According to NBGH, the percent-age of organizations planning to shiftmore costs to employees this yearare:

✓ Co-pays and co-insurance 21percent in 2006 and 34 percent in 2007

✓ Premium contributions 24 per-cent in 2006 and 32 percent in 2007

✓ Deductibles: 22 percent in 2006and 28 percent in 2007

More employers are offering moreconsumer-directed health plans, includ-ing health savings accounts (HSAs) andflexible spending accounts (FSAs).• Final deferred compensation

regulations are issued. The IRS hasissued the final regulations underSection 409A of the Internal RevenueCode. The new regulations are effec-tive January 1, 2008, and impact sepa-ration pay, health coverage or healthexpense reimbursements, reimburse-ment of certain expenses, and fringebenefits to former employees. Failureto comply with the regulations canresult in a 20% penalty tax on the par-ticipant. Tax-favored vehicles such as401(k) or 403(b) plans are exempt.


ECFA will be represented at the following events and meetings:

Credit Card: ❏ Corporate ❏ Personal MasterCard or Visa Only

Card #: _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Date: ___ ___

Name on Card ________________________________________________________________________________

Address on Card ______________________________________________________________________________

Signature ____________________________________________________________________________________

Changes to ECFA’s Membership

MEMBER NEWSMEMBER NEWS

New Members:1. Alpha Omega Institute, Grand Junction,

CO

2. Buckner International, Dallas, TX

3. Camp Alandale, Idyllwild, CA

4. Central India Christian Mission,

Houston, TX

5. Children of Promise, Anderson, IN

6. Coachella Valley Rescue Mission,

Indio, CA

7. The Encouraging Word, Spartanburg,SC

8. Forest Hill Church, Charlotte, NC

9. Glad Tidings India, York, PA

10. Gospel Lakes Ministries, New Waverly,TX

11. Grace Adventures, Mears, MI

12. Horizon Christian Fellowship, RanchoSanta Fe, CA

13. House of Hope, Orlando, Orlando, FL

14. Kids’ Club, Chicago, IL

15. National House of Hope, Orlando, FL

16. Partners in Evangelism International,

Chicago, IL

17. World Radio Network, McAllen, TX

Name Changes:1. Christian Community Foundation, Colorado

Springs, CO, is now WaterStone

2. Medical Ambassadors International,Modesto, CA, is now LifeWind

International

3. Michigan Christian Home, Grand Rapids,MI, is now Beacon Hill at Eastgate

4. Sky Ranch, Van, TX, is now Sky Ranch

Foundation

Voluntary Resignations:1. Biblical Theological Seminary, Hatfield,

PA

2. Boise Rescue Mission, Boise, ID

3. I360 Initiative, Littleton, CO

4. The Light House, Kansas City, MO

Mergers:1. ACMC, Fort Wayne, IN, merged with

Caleb Project

2. Mission, Moving Mountains, Savage,MN, merged with The Navigators

8


ECFA • 440 West Jubal Early Drive, Suite 130 • Winchester, VA 22601Phone: 800-323-9473 Email: [email protected]

Fax: 540-535-0533 Web: www.ECFA.org • www.ECFAmembers.org

Expiration

Governance as Leadership_______ copies @ $35.00 (retail $45.00)

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plus $2.47shipping per book

Anew framework for helping nonprofit organizations maximize the effectiveness of their boards. Governance as Leadership

redefines nonprofit governance. It provides a powerful frameworkfor a new covenant between trustees and executives: moremacrogovernance in exchange for less micromanagement.

This book sheds new light on the traditional fiduciary and strategicwork of the board and introduces a critical third dimension of effectivetrusteeship: generative governance. It serves boards as both a resourceof fresh approaches to familiar territory and a lucid guide to importantnew territory, and provides a road map that leads nonprofit trusteesand executives to governance as leadership.

Governance as LeadershipRichard P. Chait, William P. Ryan, Barbara E. Taylor

Hardcover224 pages

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