Cash and Carry

Sources say a giant Eastside evangelical church borrowed tsunami/Katrina relief funds to cover its own expenses.

Hundreds of parishioners packed into a cavernous meeting room at Redmond's Overlake Christian Church Thursday evening to find out the real reason their senior pastor, Rick Kingham, had left. Kingham, one of the founders of the Promise Keepers men's movement, had resigned without explanation the previous Sunday after eight years leading the church.

In lengthy remarks to the faithful, three of the church's 12 governing elders said they had asked Kingham to leave after a unanimous vote. "Pastor Rick was not the person God called to take us to the next level," said board Chairman Bob Senatore. And then the three elders addressed questions that had been submitted in advance by parishioners. Number one on the list, and projected onto an overhead screen: "Was there misappropriation of funds?"

The question has been circulating at Overlake for months. Several sources have told Seattle Weekly that the church took money that parishioners had donated for victims of the Indian Ocean tsunami and Hurricane Katrina and used it to cover church operating expenses. The church has been in bad financial shape, suffering $1 million–plus annual operating losses for at least the last four years, according to records reviewed by the Weekly.

The elders, who oversee church operations much as a board of directors supervises a business, denied any financial impropriety. But they acknowledged that $75,000 raised from church members for disaster relief hadn't been passed on to any aid programs until last Christmas—nearly two years after the church solicited funds to help tsunami victims.

Leaders of the church also conceded that they regularly "borrowed" money from so-called "restricted funds"—that is, funds that have been donated for a specific purpose, such as disaster relief or missionary work—and used it for pressing expenses like salaries. But the money ultimately went to its intended targets, they said.

"The point was, the money was raised and the money was given," church elder Phil Leng told me in an interview before the meeting. "One hundred percent went to where it was designated."

What Leng, and the other church leaders at the meeting, didn't say is that the church handed over the money only after parishioners pressured them to do so.

People started asking questions last July. According to one parishioner, who was willing to speak only on the condition of anonymity, church members who donated money were watching accounts of aid operations on television. And they wondered, says the source, "Well, where did our money go?" They wanted to hear some feel-good stories about the lives they had touched. "That's when it became apparent that the money had not been released."

He and some other donors expressed concern to the church's elders. The response, he says, was: "'Well, we'll get back to you.' But nobody got back to me." Eventually, Overlake leaders informed donors that the church was holding on to the money by design. They said the church hadn't wanted to give money to the organizations that were offering immediate assistance after the disasters, some of whom had proved to be disreputable. And so, the leaders said, the church had intended all along to wait and give money for the rebuilding effort.

Exactly how much Kingham had to do with any of this isn't clear, and he isn't around to ask. The day after he announced his resignation during Sunday services, he left for India on a weeks-long mission. Leng, the elder, says Kingham's departure is unrelated to questions about the relief money.

But one thing is clear. Overlake is in shaky financial shape. That's to be expected given that the church had been hemorrhaging members under Kingham, a pastor who arrived eight years ago after the resignation of former pastor and one-time evangelical powerhouse Bob Moorehead. In 1996, Moorehead was arrested in Florida for allegedly masturbating in public with another man. He later faced allegations by male parishioners that he had inappropriately touched them. Kingham, in the eyes of parishioners I spoke to, offered necessary healing but failed to catch fire in the pulpit.

Funding obviously drops when membership goes down, and Overlake has lost at least 3,000 members since Moorehead's heyday. Church officials put the current membership at around 3,500. Others in the church think the real number is lower, judging by the sparse attendance in the 5,000-seat auditorium where Kingham held services.

The church incurred net operating losses of $1.7 million and $1.4 million for the 2006 and 2005 fiscal years, respectively, according to Overlake's most recent audited financial statement. Information filed with the Evangelical Council for Financial Accountability shows losses of more than $1 million for the previous two years as well. The church has also borrowed a half-million dollars against its building and obtained a line of credit worth $1.4 million.

The financial statement notes something else that raises questions of self-dealing and nepotism. Over the past two years, the church paid $184,000 to a missionary agency of which Overlake's senior missions pastor is the chairman of the board. And in 2005, the church signed a $10,000 contract "for management services to an individual related by marriage to the senior pastor."

Overlake has not responded to repeated requests for detailed comment on its financial situation.

The fact that the money donated for disaster relief went, in the end, to the purpose for which it was raised probably circumvents any question of illegality. "It's less of a concern," says Kristin Alexander, a spokesperson for the state Attorney General's office.

"Was it spent for the donor-restricted purpose? That's the litmus test," says Dan Busby, vice president of the Evangelical Council for Financial Accountability, a national organization promoting responsible church stewardship. "It isn't how fast you spend." Busby says borrowing from restricted funds "is commonly done in the nonprofit world," though it's not considered a "best practice." It's "a slippery slope," he says. "You may go down the slope so far that you may not get back."

Others in the nonprofit world express stronger opinions. They relate how a number of organizations, including the Red Cross in the wake of 9/11 fund-raising, have been hammered for holding on to donated money or using it for purposes other than what donors intended.

"We would never repurpose the money," says Eric Block, a spokesperson for the Portland-based Mercy Corps, the international aid organization. "It's an ethics issue."

comments powered by Disqus

Friends to Follow