The Lutheran Church—Missouri Synod (LCMS) partners with a broad network of independent nonprofits known as Recognized Service Organizations (RSOs) to extend mercy, ministry and mission in communities across the United States.
LOL, I’m sure the Synod can handle a few sentences about transparency and accountability without melting. Let me know what the potential and actual “conflicts” are. The old bulls had decades to fix these gaps, but here we are, business as usual. Anyhoo, you should definitely file charges and prepare a resolution of condemnation for the national convention.
Great tool, but I would still like to see Synod re-look at the whole program to report on what went wrong, why, and re-evaluate the whole program. Should we have the program still and if so should there be fundamental changes to it? I'm sure someone will say things are happening in the background, but it certainly seems like there is no recognition that things shouldn't simply proceed as they have been.
This same lack of oversight led to the Concordia Texas debacle. I pray that the LCMS, inc adopts your app, and instills some best practices in how they operate!
Concordia-Texas is/was not a Recognized Service Organization. It is/was an institution of the LCMS subject to the synod’s constitution, bylaws, and governance.
The Synod does not have oversight authority over Recognized Service Organizations. The name tells you the extent of synodical involvement, namely, recognition that the mission of an organization is aligned with the mission of the Synod. The Synod is not involved in governance and financial matters of an RSO. RSO’s are not Auxiliary Organizations under the Synod’s Constitution and Bylaws.
The Recognized Service Organization has its origins in Lutheran schools and Lutheran school associations. RSO status enables an organization to call workers and for workers so called to retain their status as members of the Synod. It also allows workers to be covered by the various Concordia plans. Given the potential problems of recognition without oversight authority, it might be best to go back to the original intent of the RSO status and limit it to a narrow group of organizations that truly need this kind of status. All too often it is viewed in the popular mind as a synodical “imprimatur” of a para-synodical entity.
Thank you for requesting feedback on this “mid beta” version of the RSO Explorer tool. While I appreciate the intent of the tool to “amplify transparency”, it is clearly not ready to be used for that purpose. The assumption that “Revenue less Expenses” on an IRS Form 990 means “Net Income” is wrong. For non-profits, it is “Change in Net Assets”. Assets that are dedicated to furthering the mission of the non-profit. To calculate a “Profit Margin” percentage as “Net Income” over “Revenue” is grossly in error and misleading.
I am commenting on behalf of “The Lutheran Scholarship Granting Organization of Indiana”. LSGOI for short. Having such a fundamental miscalculation for LSGOI, I must question your accuracy for any organization listed in the tool.
I serve as the chairman of the LSGOI board of directors. LSGOI administers the tax-credit scholarship program for all 50 LCMS elementary and secondary schools in the state of Indiana, as well as for five other Christian schools. We handle contributions from donors throughout the state. Donors may designate the school(s) to which their contribution is directed. Indiana provides these donors with a 50% state income tax credit on every dollar donated. Schools request grants from LSGOI in the form of scholarships to be applied for tuition, fees, and other expenses for financially qualifying students in their school. Categorically, we are a “granting” organization, as our name implies. All certified “SGOs” in the state of Indiana, including LSGOI, are precluded from using more than 10% of annual contributions to cover administrative expenses. LSGOI caps its admin fee at 7% of contributions. The fee is reduced to 5% on contributions above $50,000 and capped at $10,000 on contributions of $200,000 or more.
LSGOI does not have, nor would it be allowed to have, by state law, a “profit margin” of 25%. An independent auditor files the LSGOI Form 990 with the IRS every year. The fiscal year 2022-23 form is linked within the RSO Explorer tool. Looking at page 1, the following information is reported for the (then) “Current Year”:
Line 8 Contributions: $ 4,873,530
Line 10 Investment Income (Interest) $ 49,551 (applied to "general fund" grants)
Line 17 Other Expenses (Admin cost): $ 276,318 (5.7% of Line 8)
Line 18 Total Expenses (Admin + Grants): $ 3,691,375
Line 19 Revenue Less Expenses: $ 1,231,706 (“Change in Net Assets”)
Line 17 shows that the administrative cost of LSGOI operation for the fiscal year was 5.7% of the contributions received (Line 8). At the close of the fiscal year, line 19 is the remaining amount of contributions that were not requested by the schools to be granted as scholarships during the fiscal year. These funds remain in the school’s account for use in the following fiscal year(s) as scholarships. They are not “Net Income” to LSGOI. They are not part of LSGOI’s future operating revenue stream. They are simply “Change in Net Assets”. They do not constitute a “Profit Margin” for LSGOI. LSGOI does not exist to make profit. LSGOI exists to raise funds to be used for elementary and secondary school student scholarships, helping LCMS schools to thrive in the state of Indiana. Please take care on what you report and how you report it in the RSO Explorer. Thank you!
Thank you for taking the time to provide such a detailed and substantive response, and for doing so in a constructive spirit. I appreciate both the correction and the opportunity to improve the RSO Explorer while it is still explicitly labeled as a *mid-beta* tool.
You are absolutely right on the central accounting point. On an IRS Form 990, “Revenue less Expenses” (Line 19) is **Change in Net Assets**, not “Net Income” in a for-profit sense. Treating that figure as a proxy for profit — and labeling a derived ratio as a “profit margin” — is incorrect for non-profits generally and especially misleading for scholarship-granting organizations like LSGOI. That is an error on my part, and I accept the criticism.
Your explanation of LSGOI’s structure and statutory constraints is also correct. As a certified Indiana SGO, LSGOI is legally capped in its use of contributions for administrative purposes, and the Form 990 clearly reflects that reality.
Your funds remain mission-bound and do not represent discretionary revenue for LSGOI. The Form 990 filings for adjacent years show the same pattern of disciplined administration, audited reporting, zero board compensation, and program-dominant expenditures .
Where the RSO Explorer fell short was not in exposing malfeasance,there is none suggested here, but in **failing to distinguish between operating efficiency and balance-sheet timing** for granting organizations. That distinction matters, and your feedback highlights why tools like this must be especially careful not to import for-profit heuristics into non-profit analysis without context.
To address this concretely, I am implementing the following corrections:
1. Removal of “profit margin” language for all 501(c)(3) entities, replaced with “Change in Net Assets (Form 990 Line 19)” using IRS-accurate terminology.
2. Entity-type classification so scholarship-granting organizations are flagged distinctly from operating charities, congregations, and service agencies.
3. New explanatory tooltips and disclosures clarifying that positive changes in net assets may reflect donor-restricted funds held for future program use, not surplus income.
4. Administrative-expense ratio framing that emphasizes statutory or policy caps (where applicable) rather than generic red-flag thresholds.
5. A visible "beta limitations” notice acknowledging that early versions may misclassify edge cases and inviting organizations to submit corrections — as you have done here.
The goal of RSO Explorer is not to impugn faithful organizations, but to create a shared factual baseline that helps boards, donors, and church bodies ask better questions. Your response has helped sharpen that goal and materially improve the tool.
I’m grateful for the care LSGOI takes in stewarding scholarship funds for Indiana families and LCMS schools, and I appreciate you holding this project to a higher standard. If you’re willing, I would welcome continued input as these corrections roll out , especially on how best to present SGO data accurately and fairly.
Thank you again for engaging directly and constructively.
Thank you Tim! I appreciate your kind words and the detailed explanation of updates to be made to RSO Explorer. Thank you for all of your efforts in creating a factual baseline in one LCMS RSO repository. I and our LSGOI board will be happy to continue to engage in feedback.
Herr Oberster Kirchenführer, here are my papers
https://constitution.congress.gov/constitution/amendment-1/
LOL, I’m sure the Synod can handle a few sentences about transparency and accountability without melting. Let me know what the potential and actual “conflicts” are. The old bulls had decades to fix these gaps, but here we are, business as usual. Anyhoo, you should definitely file charges and prepare a resolution of condemnation for the national convention.
Why do you read ad crucem at all?
Great tool, but I would still like to see Synod re-look at the whole program to report on what went wrong, why, and re-evaluate the whole program. Should we have the program still and if so should there be fundamental changes to it? I'm sure someone will say things are happening in the background, but it certainly seems like there is no recognition that things shouldn't simply proceed as they have been.
This same lack of oversight led to the Concordia Texas debacle. I pray that the LCMS, inc adopts your app, and instills some best practices in how they operate!
Concordia-Texas is/was not a Recognized Service Organization. It is/was an institution of the LCMS subject to the synod’s constitution, bylaws, and governance.
The Synod does not have oversight authority over Recognized Service Organizations. The name tells you the extent of synodical involvement, namely, recognition that the mission of an organization is aligned with the mission of the Synod. The Synod is not involved in governance and financial matters of an RSO. RSO’s are not Auxiliary Organizations under the Synod’s Constitution and Bylaws.
The Recognized Service Organization has its origins in Lutheran schools and Lutheran school associations. RSO status enables an organization to call workers and for workers so called to retain their status as members of the Synod. It also allows workers to be covered by the various Concordia plans. Given the potential problems of recognition without oversight authority, it might be best to go back to the original intent of the RSO status and limit it to a narrow group of organizations that truly need this kind of status. All too often it is viewed in the popular mind as a synodical “imprimatur” of a para-synodical entity.
Revenue of 1.2 billion dollars, synodical endorsement, and lack of accountability structures? Surely, nothing can go wrong.
Thank you for requesting feedback on this “mid beta” version of the RSO Explorer tool. While I appreciate the intent of the tool to “amplify transparency”, it is clearly not ready to be used for that purpose. The assumption that “Revenue less Expenses” on an IRS Form 990 means “Net Income” is wrong. For non-profits, it is “Change in Net Assets”. Assets that are dedicated to furthering the mission of the non-profit. To calculate a “Profit Margin” percentage as “Net Income” over “Revenue” is grossly in error and misleading.
I am commenting on behalf of “The Lutheran Scholarship Granting Organization of Indiana”. LSGOI for short. Having such a fundamental miscalculation for LSGOI, I must question your accuracy for any organization listed in the tool.
I serve as the chairman of the LSGOI board of directors. LSGOI administers the tax-credit scholarship program for all 50 LCMS elementary and secondary schools in the state of Indiana, as well as for five other Christian schools. We handle contributions from donors throughout the state. Donors may designate the school(s) to which their contribution is directed. Indiana provides these donors with a 50% state income tax credit on every dollar donated. Schools request grants from LSGOI in the form of scholarships to be applied for tuition, fees, and other expenses for financially qualifying students in their school. Categorically, we are a “granting” organization, as our name implies. All certified “SGOs” in the state of Indiana, including LSGOI, are precluded from using more than 10% of annual contributions to cover administrative expenses. LSGOI caps its admin fee at 7% of contributions. The fee is reduced to 5% on contributions above $50,000 and capped at $10,000 on contributions of $200,000 or more.
LSGOI does not have, nor would it be allowed to have, by state law, a “profit margin” of 25%. An independent auditor files the LSGOI Form 990 with the IRS every year. The fiscal year 2022-23 form is linked within the RSO Explorer tool. Looking at page 1, the following information is reported for the (then) “Current Year”:
Line 8 Contributions: $ 4,873,530
Line 10 Investment Income (Interest) $ 49,551 (applied to "general fund" grants)
Line 12 Total Revenue: $ 4,923,081
Line 13 Grants (Scholarships): $ 3,415,057 (Sched 1: 1,931 student scholarships)
Line 17 Other Expenses (Admin cost): $ 276,318 (5.7% of Line 8)
Line 18 Total Expenses (Admin + Grants): $ 3,691,375
Line 19 Revenue Less Expenses: $ 1,231,706 (“Change in Net Assets”)
Line 17 shows that the administrative cost of LSGOI operation for the fiscal year was 5.7% of the contributions received (Line 8). At the close of the fiscal year, line 19 is the remaining amount of contributions that were not requested by the schools to be granted as scholarships during the fiscal year. These funds remain in the school’s account for use in the following fiscal year(s) as scholarships. They are not “Net Income” to LSGOI. They are not part of LSGOI’s future operating revenue stream. They are simply “Change in Net Assets”. They do not constitute a “Profit Margin” for LSGOI. LSGOI does not exist to make profit. LSGOI exists to raise funds to be used for elementary and secondary school student scholarships, helping LCMS schools to thrive in the state of Indiana. Please take care on what you report and how you report it in the RSO Explorer. Thank you!
Thank you for taking the time to provide such a detailed and substantive response, and for doing so in a constructive spirit. I appreciate both the correction and the opportunity to improve the RSO Explorer while it is still explicitly labeled as a *mid-beta* tool.
You are absolutely right on the central accounting point. On an IRS Form 990, “Revenue less Expenses” (Line 19) is **Change in Net Assets**, not “Net Income” in a for-profit sense. Treating that figure as a proxy for profit — and labeling a derived ratio as a “profit margin” — is incorrect for non-profits generally and especially misleading for scholarship-granting organizations like LSGOI. That is an error on my part, and I accept the criticism.
Your explanation of LSGOI’s structure and statutory constraints is also correct. As a certified Indiana SGO, LSGOI is legally capped in its use of contributions for administrative purposes, and the Form 990 clearly reflects that reality.
Your funds remain mission-bound and do not represent discretionary revenue for LSGOI. The Form 990 filings for adjacent years show the same pattern of disciplined administration, audited reporting, zero board compensation, and program-dominant expenditures .
Where the RSO Explorer fell short was not in exposing malfeasance,there is none suggested here, but in **failing to distinguish between operating efficiency and balance-sheet timing** for granting organizations. That distinction matters, and your feedback highlights why tools like this must be especially careful not to import for-profit heuristics into non-profit analysis without context.
To address this concretely, I am implementing the following corrections:
1. Removal of “profit margin” language for all 501(c)(3) entities, replaced with “Change in Net Assets (Form 990 Line 19)” using IRS-accurate terminology.
2. Entity-type classification so scholarship-granting organizations are flagged distinctly from operating charities, congregations, and service agencies.
3. New explanatory tooltips and disclosures clarifying that positive changes in net assets may reflect donor-restricted funds held for future program use, not surplus income.
4. Administrative-expense ratio framing that emphasizes statutory or policy caps (where applicable) rather than generic red-flag thresholds.
5. A visible "beta limitations” notice acknowledging that early versions may misclassify edge cases and inviting organizations to submit corrections — as you have done here.
The goal of RSO Explorer is not to impugn faithful organizations, but to create a shared factual baseline that helps boards, donors, and church bodies ask better questions. Your response has helped sharpen that goal and materially improve the tool.
I’m grateful for the care LSGOI takes in stewarding scholarship funds for Indiana families and LCMS schools, and I appreciate you holding this project to a higher standard. If you’re willing, I would welcome continued input as these corrections roll out , especially on how best to present SGO data accurately and fairly.
Thank you again for engaging directly and constructively.
Respectfully,
Tim
Thank you Tim! I appreciate your kind words and the detailed explanation of updates to be made to RSO Explorer. Thank you for all of your efforts in creating a factual baseline in one LCMS RSO repository. I and our LSGOI board will be happy to continue to engage in feedback.
God bless you,
Karl
Thank you, and congrats on the perfect "10" for LSGOI: https://rso.adcrucem.app/org/the-lutheran-scholarship-granting-organization-of-indiana-inc