ECFA Commission Concludes No New Rules Needed on Unreasonable Nonprofit Compensation

ECFA Commission Concludes No New Rules Needed on Unreasonable Nonprofit Compensation: About two years ago, Senator Chuck Grassley (R-IA), ranking member of the Senate Finance Committee, asked his staff to investigate media-based ministries and make recommendations about how to address self-dealing and questionable executive compensation levels and practices. Their recommendations were pretty dramatic: change which organizations are given nonprofit status by IRS, expand penalties on self-dealing, and establish new regulations to make sure that that nonprofits, particularly religious organizations, did not reward their leaders in an extravagant and excessive manner.

Rather than press for these legislative and regulatory changes, however, Senator Grassley asked the Evangelical Council for Financial Accountability (EFCA) to seek solutions that relied on self-regulation and not new laws. ECFA, in turn, formed the Commission on Accountability and Policy for Religious Organizations and broadened the focus to the entire nonprofit sector. About 80 representatives of the nonprofit sector were members of the commission and various committees. The committee produced a report, Enhancing Accountability for the Religious and Broader Nonprofit Sector, in December 2012.