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Associated Press/Photo by Chuck Burton

Franklin's purse

Charity | Controversy spurs Graham to give up one of two salaries

Issue: "Do the math," Nov. 7, 2009

Franklin Graham has long had a reputation for being larger than life and going his own way. His 1997 memoir, Rebel With a Cause, chronicled his prodigal period and his return to God. Eventually, he made it to the top spots at both the Billy Graham Evangelistic Association (BGEA) and Samaritan's Purse (SP), a Christian relief organization ministering to the needy around the world.

So Graham may now have a cause, but he never leaves the rebel far behind. In 1992, the Evangelical Council for Financial Accountability (ECFA) suspended Samaritan's Purse while it investigated the ministry's finances. It was reinstated in early 1993. In 2001, when he also took over as president of the Billy Graham Evangelistic Association, nonprofit experts questioned the wisdom of Graham being paid full-time salaries by both organizations. Ministry watchdog Ole Anthony of the Trinity Foundation said, "It's ludicrous to think he could do two jobs at that level."

This month, Graham and his compensation are back in the spotlight again. When the Chronicle of Philanthropy released its annual list of the top-paid executives in the nonprofit world, Graham appeared twice, at the top of the list for his salary with BGEA, and only slightly farther down for his only slightly less hefty salary with Samaritan's Purse. The two combined gave him a total compensation of more than $1.2 million (including expense allowances) for 2008 and made him the highest-paid executive at a Christian ministry listed in the survey, and one of the highest-paid nonprofit executives of any kind.

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The news created a media firestorm. BGEA's hometown newspaper, the Charlotte Observer, devoted more than 3,000 words to the controversy in a front-page story that was picked up by newspapers around the country. Graham himself stopped giving media interviews. Instead, his public relations agency issued a defense of the compensation, saying that "due to unusual reporting guidelines related to deferred compensation placed in a 457(f) retirement plan at the BGEA over the past four years, nearly half (44.8 percent) of Mr. Graham's 2008 compensation as reported on the ministry's Form 990 had been previously reported on the 2005, 2006 and 2007 Form 990. This unusual reporting requirement meant that the BGEA had to report three prior years' retirement contributions a second time in 2008. Therefore, in reality, there was no substantial increase in Mr. Graham's compensation in 2008."

That may be, but the same reporting guidelines also applied to others in the compensation survey. The only real difference was that BGEA's contributions to Graham's retirement plan were much larger than other organizations' contributions to their executives' plans. Also, Graham's compensation in the years 2005-2007 was over $750,000-at or near the top for Christian ministry executives. Indeed, Graham's compensation was so much greater than the No. 2 religious executive on the list that, even without the double-counting, his combined BGEA/SP salaries would still have put him at the top of the list.

So will all of this result in more scrutiny, or possible suspension, from the ECFA? Almost certainly not. Dan Busby, president of the ECFA, also declined to be interviewed by WORLD, but he too issued a statement in response to our questions. His statement said, in part, that "nearly half of Mr. Graham's 2008 compensation as reported on the Billy Graham Evangelistic Association (BGEA) Form 990 had been previously reported on the 2005, 2006, and 2007 Form 990. This unusual reporting requirement resulted in the BGEA reporting three prior years' retirement contributions a second time in 2008. Therefore, there was no substantial increase in Mr. Graham's compensation in 2008." In other words, the ECFA statement was almost a verbatim copy of the statement issued by BGEA and Samaritan's Purse.

Busby's statement went on to say that "ECFA standards are based on the principles of good governance, accountability, integrity and transparency, and do not place dollar limits on the compensation of its members' leaders."

But Graham himself acknowledged that, despite the elaborate explanations, the situation didn't look good. On Oct. 9, Graham told his staff via a memo that he planned to give up his BGEA salary. His spokesperson, Mark DeMoss, said that Graham had decided the controversy "just wasn't worth it." That means that Graham will receive just one income, the one he gets from Samaritan's Purse-which in both 2007 and 2008 (including all benefits) exceeded $500,000.

Warren Cole Smith and Rusty Leonard
Warren Cole Smith and Rusty Leonard

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