The Yoke of Financial Transparency is Light
Shenanigans in the Southern Baptist Convention offer yet another warning to all church bodies about transparent financial disclosures.
America’s largest Protestant denomination, the Nashville-based Southern Baptist Convention, offers several parables about financial disclosure to all church bodies. Its flagship institution, Southwestern Baptist Theological Seminary in Fort Worth, TX, accumulated a $140.1 million operating deficit from 2002 to 2022. Reduced to the level of a street junkie, it had to humiliate itself and beg for one more line of credit to stave off a complete collapse in late 2022.
How does a seminary spend $140.1 million that it does not have? Through hubris and the insouciance that always materializes when financial transparency is optional or subject to management diktat.
Seminary expenses rose as revenue fell, but the appetite for fine things never abated. A Trustees report highlighted abuses by the since resigned seminary president, Adam Greenway, who was hired to fix problems created by his predecessor but could not resist temptation:
Between 2019 and 2022, more than $1.5 million was spent on “renovations, furnishings and related expenses to the president’s home even as the seminary scrambled to cut costs, primarily by shedding staff. The expenses included:
$59,865.79 for Christmas decorations (Ad Crucem can provide 10,000 Christmons at this price if the SBC needs authentic Jesus-centered decorations this year!)
$25,000 for artwork,
$11,123.49 for an espresso machine and accessories.
Charging $9,936.05 for first-class airfare for his family and a friend to fly to Anaheim, Calif., for the 2022 Southern Baptist Convention annual meeting.
$4,850.51 to frame personal diplomas.
It was undoubtedly unpleasant for the SBC to release 20 years of detailed financial statements, but that was the only way to stop the bleeding and the abuse. The buck stopped with each President, but they could only do what they did for so long with the intentional or unintentional cooperation of the Chairman of the Board and the Regents.
Auditors are not the accounting police
Many assume auditors are the accounting police who investigate and uncover financial malfeasance. Auditors might uncover and report blatant fraud, but in most cases, as borne out by dozens of large and small accounting scandals like Enron, they only confirm that management is executing financial management according to the organization’s governance policies and that statements are GAAP compliant.
For example, if a board chairman approves a president’s wayward spending through the regular expenditure authorization procedures, the auditors check the box and say policies were followed. They do not ask why the chairman approved the spending or why the president spent it. The primary motivation of auditors is to fortify an annuity income stream by pleasing the customer.
Consequently, unhesitating transparency best serves accountability, trust, and control over money.
We have seen how a lack of financial transparency and weak governance contributed to Concordia Portland's collapse. We should assume that similar weaknesses are systemic to the LCMS because all the evidence points to it in church bodies of all sizes.
The right of American churches not to file public financial statements is a grave error, not because of Benny Hinn’s lavish lifestyle but because it engenders management sloppiness, corner-cutting, and unusual temptations.
Our churches, districts, Synods, and RSOs should regularly provide detailed financial statements to members and stakeholders. It is the definition of OPM—other people’s money, and they deserve to know how it is being stewarded.
I would very much like to see this implemented as much as possible.