Many critics of evangelicals (and of religion in general) object to the tax breaks that ministries receive. “Tax the churches!” is a frequent response on Twitter to stories about wealthy or politically inflammatory pastors. The feeling is understandable, but the vast majority of churches in America are small and would not survive without breaks like the “parsonage exemption,” which is a federal tax deduction for ministers’ housing expenses.
It is true, though, that rich televangelists like Kenneth Copeland take advantage of tax breaks. Copeland operates a ministry compound outside of Fort Worth, Texas, that includes a private airport and a church-owned lakeside mansion appraised at nearly $11 million. The mansion is designated a church parsonage, which makes Copeland’s annual housing allowance about $1.3 million when fair rental value is applied, according to a 2020 report by the Trinity Foundation watchdog group. The ministry owns the entire complex, which is not subject to local property taxes. Copeland, who was a pilot for Oral Roberts, owns a Gulfstream V jet thanks to his contributors. Used models of the 14-seat luxury aircraft sell for $12 million and up.
Reports of preachers enjoying high-flying lifestyles raised flags in Congress. In 2007, Sen. Charles Grassley, R-Iowa, opened an investigation into six media-based ministries: Kenneth and Gloria Copeland of Kenneth Copeland Ministries; Creflo and Taffi Dollar of World Changers Church International; Randy and Paula White of Without Walls International Church; Bishop Eddie Long of New Birth Missionary Baptist Church; Joyce Meyer of Joyce Meyer Ministries; and Benny Hinn of World Healing Center Church.
Grassley, who was then the ranking member of the Senate Finance Committee, requested detailed information from the ministries to determine if their expenditures ran afoul of their tax-exempt status. The ministries headed by Meyer and Hinn cooperated and promised to reform, but the others provided only partial information or refused to cooperate on the grounds that the inquiries were intrusive and violated their religious freedom. Senate staffers said potential informants worried about retaliation from the ministries if they cooperated. Investigators concluded that they didn’t have the time or resources to issue and enforce subpoenas.
A final report released in January 2011 showed no evidence of wrongdoing by any of the ministries and recommended no legislative remedies. But Grassley’s staffers voiced general concerns. “This lack of governmental, independent or denominational oversight is troubling when considering that churches can reach the size of large taxable corporations, control numerous taxable and non-taxable subsidiaries, and bestow Wall Street-size benefits on their ministers,” the staff memo said. They received financial statements showing how ministries dissolved charitable organizations into a church to avoid having to file IRS Form 990 required for other nonprofit groups. The report detailed the existence of business entities affiliated with church ministries.
Today, Congress has no appetite to force greater transparency and seems content to let churches police themselves. Grassley recommended that the Evangelical Council for Financial Accountability form a commission to follow up on the Senate report. Members of the council, founded by Billy Graham and others in 1979, appoint independent boards and release financial documents. But churches like Lakewood are ineligible to join because the Osteen family controls the board. Many evangelical churches are husband-and-wife operations that include their children and in-laws in leadership roles. The lines between the family and the church are blurred or nonexistent. That has also led to succession problems for many high-profile ministries. More on that next time.