Church of Scientology runs afoul of widely accepted best practices for fund raising

St. Petersburg Times/November 20, 2011

Many American churches freely show their hand when it comes to money, going so far as to publish detailed financial statements online.

The Church of Scientology does not. Nor does its well-financed membership organization, the International Association of Scientologists, or IAS.

Fiscal transparency is a hallmark of any nonprofit seeking to build trust with the public, according to major groups that promote best practices for charitable fundraising.

The Association of Fundraising Professionals. The National Catholic Development Conference. The U.S. Better Business Bureau. The Charities Review Council.

All say that showing the money is fundamental — even though it isn't always required.

Two list financial reporting as part of their "Donor Bill of Rights." The information lets contributors see how much is raised and how it is spent.

Dozens of former Scientology parishioners told the St. Petersburg Times that they donated five- and six-figure sums to Scientology churches but were never given a financial report. They said the same held true for the IAS. Former church staffers said they didn't see reports either.

Scientology insists that its churches and the IAS give members "considerable details" about how donations are spent. Spokeswoman Karin Pouw said this information is "broadly communicated through the church's own publications, including Impact magazine and International Scientology News."

A review of Scientology magazines found large amounts of positive information about the church and its affiliates, but no financial reporting.

Parishioners generally would not ask the church for a financial report, many former members said. That would indicate a lack of trust in the church and would be frowned upon.

While most nonchurch charities — including several Scientology affiliates — are required to file public annual financial reports with the IRS, churches and certain religious organizations are not. Many churches publicly display their finances anyway. A sampling: Evangelical Church in America, Mennonite Church USA and any number of Roman Catholic dioceses around the country.

According to accounts by former Scientologists, the lack of transparency is just one of the ways the church runs afoul of widely accepted best practices for fundraising. The Association of Fundraising Professionals and other groups promote good behaviors that go beyond filing financial reports.

Applying undue pressure to donate is a no-no, and they advise fundraisers to back off as soon as a prospective donor asks.

Fundraising watchdog groups advise against abusing positions and relationships to get money from donors. They urge fundraisers to make sure donors are fully informed and have consulted financial professionals.

They also caution against reward systems such as commissions.

The Church of Scientology awards commissions to fundraisers who get people to buy church services, stay in Scientology hotels and purchase Scientology materials. It says those payments meet IRS guidelines.

The Association of Fundraising Professionals says such systems, even though they are legal, can "foster inappropriate conduct by individuals whose self-interest is oriented to immediate results, irrespective of the donor's best interests."

The church's quota system emphasized immediate results and created self-interested fundraisers, former members said. For example, many recounted stories of frenzied church workers bent on meeting their targets so supervisors would let them go to bed.

The church said its quotas generate enthusiasm and team spirit. "There is nothing sinister about using this technique to motivate church staff."

Among the other reported Scientology practices that appear to run counter to accepted best practices:

• Parishioners getting into "ethics" trouble when they don't donate, their progress in Scientology blocked or threatened.

• Religious counselors with intimate personal knowledge about parishioners asking them one on one for donations.

• Religious workers pressuring parishioners to make quick decisions on large donations.

• Aggressive tactics such as unannounced home visits at night, incessant phone calls and blocking of exits at fundraising events.

• Religious workers repeatedly asking for money after a parishioner says "no."

The church told the St. Petersburg Times that these are the accounts of apostates who can't be believed and are "making up whatever you think they want to hear."

There is nothing wrong with church ethics officers selling church materials or with church counselors asking for donations, the church said. The latter is "a constitutionally protected form of religious activity."

The church said its finances are audited annually by an outside accounting firm, a step not required by law.

It said: "All donations are accounted for in strict accordance with church policy and government guidelines."

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