IRS Reclassifies Billy Graham’s Organization

Billy Graham Evangelistic Association (BGEA) requested and received a determination to reclassify it as an association of churches, amid ongoing battles between religious organizations and the federal government regarding employer requirements related to healthcare.

The 66-year-old organization requested a determination letter from the Internal Revenue Service (IRS) on Sept. 10, 2015, reclassifying the nonprofit as an “association of churches.” The IRS provided a determination letter on Nov. 18, 2015. Charities classified as an “association of churches” are not required to file Form 990.

In a statement to The NonProfit Times, BGEA, through its public relations firm Demoss, cited three primary reasons for the reclassification:

* The ministry had been operating as an association of churches for years, as virtually everything is done in cooperation with local churches;
* There are religious exemptions in the federal tax code that only apply “associations of churches” and other church organizations, including protections of employers from government interference in matters relating to employment, which BGEA believes protect the ministry’s religions liberty rights.
* Filing the annual tax form has become “increasingly onerous, consuming a substantial amount of ministry time and financial resources” throughout the year.

BGEA’s sister organization, Samaritan’s Purse, also requested reclassification for the same reasons but has not received a response, according to a spokesman. If granted the new classification, Samaritan’s Purse would continue to file a Form 990 since it receives more than $25 million in government grants. The Boone, N.C.-based international relief organization also works through churches around the world.

Form 990 and audited financial statements differ in a few key areas, including disclosure of executive compensation, which is found in the annual Form 990 but not detailed in audited financial statements. The Charlotte, N.C.-based organization continues to file an independent financial audit each year and posts a consolidated financial statement on its website. The ministry also remains a member of the Evangelical Council for Financial Accountability (ECFA).

ECFA President Dan Busby said many religious organizations have been organized as churches or religious orders over the years, neither of which require filing Form 990. “It is not infrequent to see a religious organization move to church or religious order status,” he said.

As it does each year, The NonProfit Times requested BGEA’s Form 990 as part of its compilation of The NPT 100, a study of the nation’s largest nonprofits, based on the annual tax forms of hundreds of organizations. There are organizations in The NPT 100 that are considered associations of churches or church organizations. Some submit a Form 990 anyway, such as Catholic Relief Services and Compassion International, while others such as Volunteers of America submit what is effectively a mock Form 990. Still others provide consolidated financial statements, including Cru (formerly Campus Crusade for Christ) and Christian & Missionary Alliance.

BGEA reported total revenue in 2015 of $106.9 million and operating expenses of $98.3 million. President and CEO Franklin Graham was paid a base salary of $111,458 in 2015, according to the statement. The last Form 990 for BGEA indicated his total compensation was $258,677 for 2015, including $100,000 in other reportable compensation, representing a “special catch-up retirement payment,” as reported on the tax form.

Samaritan’s Purse reported total revenue of $593 million last year. Graham also serves as president and CEO of that organization, with total compensation last year of $822,333, including a base salary of $361,624.