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When Can a Ministry Count as a Church?

In the case of the Family Research Council, it depends on if you ask the IRS or the US Religion Census.
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When Can a Ministry Count as a Church?
Image: Screengrab Westgate Chapel
Family Research Council President Tony Perkins speaks in a church in Washington State.

The research team counting all the nondenominational congregations in America did not add any marks to their tally when a conservative Christian think tank in Washington, DC, declared itself an association of churches.

The reclassification might be meaningful for the IRS, but for the Association of Statisticians of American Religious Bodies (ASARB), it doesn’t count. Literally: The Family Research Council (FRC) will not be included in the US religion census, scheduled for publication this fall.

“We are looking for nondenom congregations/worshiping communities, many of which might not even be registered or 501(c)(3) entities,” said Scott Thumma, director of the Hartford Institute for Religion Research and head of the team counting nondenominational churches for the 2020 US Religion Census. “Family Research Council as well as evangelists, singing groups, mission agencies, resource suppliers, etc., get stripped out even if they claim to be nondenominational. We are only looking for churches.”

The FRC, a family values advocacy organization that spun off of Focus on the Family in 1992, is one of an apparently growing number of parachurch organizations that has asked the IRS to reclassify it as a church or an association of churches. Focus on the Family made the change in 2016, along with the Billy Graham Evangelistic Association (BGEA).

Other evangelical organizations that have received reclassification include Cru, Gideons International, Voice of the Martyrs, Ravi Zacharias International Ministries (RZIM), most major televangelists, Liberty Counsel, the American Family Association, Frontiers, Ethnos 360/New Tribes Mission, The Navigators, and World Vision.

Thumma’s team did not include any of them in its count of 39,430 nondenominational churches in 2020, an increase of nearly 4,000 congregations and 6.5 million people from the 2010 religion census.

The IRS is counting them as churches for tax purposes, however.

Some Christian organizations that have historically been considered parachurch ministries have told the IRS they should be seen, legally, as churches. More started making this argument in the past five years.

In 2016, an executive at the tech company Mozilla was publicly shamed for a donation he made to a political organization opposing same-sex marriage. He was forced to resign, raising concerns among conservative Christian groups that donors could face stiff social consequences for unpopular associations.

“This was done primarily to protect the confidentiality of our donors,” a Focus on the Family spokesman told Ministry Watch in 2020. “In recent years there have been several occasions on which non-profit organizations—on both the right and the left—were targeted for information, including the names and personal details of their donors.”

Unlike many political organizations, religious nonprofits are not required to disclose the names of individual donors. But they are required to fill out and release most of IRS Form 990, which asks for information about the board of directors, leadership, and highest-paid employees.

The 990 can require disclosure of other information as well. The BGEA’s last 990, covering 2014, included an explanation of the evangelistic association’s policies on first-class airline tickets. It also had information about Billy Graham’s health care costs, the housing provided to longtime music director Cliff Barrows, and an additional $100,000 above base salary paid to Franklin Graham.

“You don't have to be a Chicken Little sort of person to be a bit concerned,” World Vision’s chief legal officer Steve McFarland told CT in 2014. “Where is this going to stop? Do we as a religious community want to continue answering ever-increasing questions?”

World Vision has voluntarily continued to submit 990 forms to the IRS, though it is classified as a church. Other organizations, like RZIM, have chosen not to disclose financial information or even the names of board members. Most, like the BGEA, have voluntarily shared financial information on their websites, but kept some details, such as salaries and compensation packages, private.

Reclassification can also protect Christian organizations from audits. The government has special rules limiting IRS agents’ authority to launch an investigation into a church, restricting investigations once they start, and prohibiting repeat investigations for five years.

The BGEA was audited in 2012. Franklin Graham said the Barack Obama administration was targeting the ministry to punish it for publishing ads urging voters to support “candidates who base their decisions on biblical principles and support the nation of Israel.” A BGEA spokesman told The Washington Post that being reclassified as a church made the organization feel better protected from government interference.

Critics, however, say these nonprofits are abusing the system to avoid scrutiny. Senate Finance Committee chairman Sheldon Whitehouse, a Democrat from Rhode Island, told ProPublica he sees this as a problem.

“Form 990 filings provide valuable, and often the only, insight into a tax-exempt organization’s income and spending,” Whitehouse said. “But lax enforcement at the IRS and DOJ encourage more game-playing, which leaves the door wide open for enterprising dark-money schemes to exploit the system further.”

Politically active groups tend to really raise eyebrows when they request reclassification. The ProPublica report, for example, points out that FRC head Tony Perkins has claimed credit for pushing the Republican Party to the right and the organization hosts the Pray Vote Stand Summit, “one of the largest and most influential gatherings for those on the Christian right.”

As a church, the FRC cannot endorse candidates, according to IRS rules, but it can engage in issue advocacy.

Even observers who are basically sympathetic to these evangelical nonprofits have raised concerns about the lack of transparency. Ministry Watch president Warren Cole Smith previously served as the vice president of mission advancement for the Colson Center for Christian Worldview. He’s not opposed to evangelicals getting involved in politics or promoting a family values agenda. Still, he’s concerned about the lack of transparency and the lack of credibility when parachurches claim to be churches.

“I don’t believe that a lot of the organizations that have filed for the church exemption are in fact churches,” Smith told ProPublica. “And I don’t think that they think that they are in fact churches.”

According to the IRS, though, they are, based on 14 “marks” for what the tax revenue agency considers a church.

The IRS used to have a stricter definition. Before 1970, IRS rules said a church was any organization engaged in religious worship and “sacerdotal functions,” the details of which would be specified by the religious organization.

In 1974, the IRS considered clarifying the meaning of “sacerdotal functions.” One proposed definition—never adopted—said the “activities of the organization must include the conduct of religious worship and the celebration of life cycle events such as births, deaths and marriage.”

Ultimately, however, the government decided not to legislate a single definition of “church.” As the Supreme Court explained in St. Martin Evangelical Lutheran Church v. South Dakota in1981, “the great diversity in church structure and organization among religious groups in this country … makes it impossible.”

The IRS, instead, ended up using 14 marks, apparently based on a 1959 IRS ruling on whether or not the Salvation Army was a church. No. 1 is a “distinct legal existence.” Other marks include a written creed or summary of beliefs, regular worship services, distinct ecclesiastical government, trained ministers, and religious instruction for children.

An organization doesn’t have to fit all the criteria, though, and the IRS guidelines also say other factors may be considered.

“The 14 criteria clearly are vague and inadequate,” wrote Richard R. Hammar, senior editor of Church Law & Tax, a Christianity Today publication. “Some apply exclusively to local churches, others do not. And the IRS does not indicate how many criteria an organization must meet in order to be classified as a church. The vagueness of the criteria necessarily means that their application in a particular case will depend on the discretionary judgment of a government employee.”

According to Hammar, the IRS’s main concern has been so-called “mail order churches”—individuals who get ordinations through the postal service, start a church of one, and then try to avoid paying their taxes. At least a dozen people tried to do this in the late 1970s, including a nurse, a boilermaker, and a Presbyterian minister’s son. In each case, the courts decided these were tax-avoidance schemes and not churches, based on the established criteria.

The IRS has accepted the nonprofits seeking reclassification, though, even when the arguments that they fit the definition of a church might seem unusual. Focus on the Family, for example, argued that it has an established place of worship in its combined chapel and cafeteria, called the “chapelteria.” And while the ministry’s lawyer acknowledged that all its employee-ministers were encouraged to participate in other churches besides Focus on the Family, he wrote that “participation in more than one congregation is integral to the idea of Christian fellowship.”

The FRC argued that, as an association of churches, it didn’t have individual members, but affiliated congregations, and the organization itself does have monthly religious meetings.

The IRS approved both organization’s requests for reclassification as churches. The 2020 US religion census, scheduled for publication this fall, won’t count them, though.

The ASARB census takers who count nondenominational churches have had to wrestle with the definition of church over the years. Counting grew complicated as they watched the emergence of multisite churches and discovered congregations that meet in different locations each week or develop other experimental ways of coming together.

Thumma and his team decided that the simplest definition would be “a worshiping community.” For each church on their tally, they tracked down evidence that the congregation met in the real world, really wasn’t connected to a denomination, and “offered worship, or were a worshiping community,” Thumma said.

So for them, Christian think tanks with monthly prayer services don’t count.

July/August
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