Transparency and Accountability

First Principles

The PCA Foundation (PCAF) is an agency of the Presbyterian Church in America (PCA).  It is part of the Church of Jesus Christ, the institution that God ordained and Jesus is building to advance and manifest the Kingdom of God on earth, the rule of God in the hearts of the redeemed.  Of this Church Jesus is the only head, and to this Church Jesus has given men as officers by whose ministry he rules and teaches through his Word and Spirit.  PCAF is the Church engaged in grant-making under the authority of Jesus Christ exercised by the ordained teaching elders (ministers) and ruling elders (church leaders) of the PCA to advance the Kingdom by the preaching of the Gospel of Jesus Christ, and to manifest the Kingdom by letting the light of that Gospel shine that men may see the good works of the Church and give glory to its Father who is in heaven.

From these theological convictions of purpose and governance flow necessarily commitments to transparency and accountability.

General Assembly

As an agency of the PCA, PCAF serves under the authority of and is ultimately accountable to the General Assembly of the PCA, and holds to its doctrinal standards.  The Assembly is the highest court of the PCA and consists of PCA ministers and leaders representing local PCA churches. The Assembly meets annually. 

You can read more about the PCA General Assembly here. 

The PCA’s, and thus PCAF’s, statement of faith comprises the Westminster Confession of Faith and the Larger and Shorter Catechisms (Westminster Standards).  You can find a summary of what PCAF believes here, and the full Westminster Standards here. 

Board of Directors

A board of directors consisting of PCA teaching elders, ruling elders, and deacons governs PCAF.  The General Assembly receives nominations from each presbytery (a regional gathering of ministers and church representatives) for the board of PCAF.  The Assembly Nominations Committee then reviews the names and biographical information of each candidate to determine qualifications and competencies for service as a PCAF director, and nominates a slate for election by the Assembly.  PCAF employees are ineligible for nomination.  The entire Assembly then votes to elect the members of the board.  The ten board members are elected to four-year terms, and are limited to serving two consecutive terms after which they may not stand for re-election for at least one year.

The board of directors meets for regular meetings twice per year, and convenes for additional special meetings as called.  The board receives from management interim reports on operations and financial results an additional two times per year, and the finance committee of the board receives quarterly financial reports from accounting staff.

You can read more about the PCAF board members here. 

Assembly Committee of Commissioners 

Besides electing PCAF’s board of directors, the General Assembly reviews PCAF operations and financial results through the Assembly’s Committee of Commissioners for the PCA Foundation (CoC).  Each presbytery appoints from among the men who will serve as commissioners to the next General Assembly men to serve as members of the committees of commissioners for the various committees and agencies of the Assembly, including PCAF.  Before the Assembly begins, all members of the CoC receive from management a comprehensive written report on the previous fiscal year of PCAF.   Then at the Assembly, the CoC hears a report from the PCAF president, reviews minutes of board meetings, PCAF’s audited financial statements, the board’s proposed budget for the coming fiscal year, and other information provided by management, and asks the president and finance personnel questions about PCAF’s operations and financial results.  You can find the most recent report to the CoC here.

The CoC then votes to approve the report, after making any modifications, and delivers it to the entire General Assembly.  The president of PCAF also presents a report on the floor of the Assembly.  You can watch the most recent floor report here. The Assembly then votes whether to approve the CoC report and take any actions recommended in it.

You can find the most recent editions of our auditor’s report with audited financial statements, budget, approved board minutes, annual letter from the president, and more in our most recent report to the General Assembly Committee of Commissioners for the PCA Foundation here.

You can watch the president’s most recent report on the floor of General Assembly.

You can review the list of PCAF directors.

PCAF is recognized by the IRS as a “church,” “integrated auxiliary” of a church, or “convention or association of churches,” and therefore is expressly exempt from the requirement placed on other tax-exempt public charities to file an annual information return (Form 990) under Internal Revenue Code section 6033.  PCAF for at least three reasons accepts this special exemption that the United States Congress has provided in furtherance of First Amendment interests in freedom of religion and separation of religion from government.

First, PCAF desires to avoid entanglement with government, and specifically not to submit to and invite the oversight and judgment of individual Internal Revenue Service agents who may be opposed to PCA’s beliefs and wish to frustrate its ministry, nor to incur the potentially exorbitant expense of responding to hostile investigation and threat.

Second, PCAF desires to preserve the privacy of its donors, the charities to which those donors recommend grants, and the destitute individuals to which PCAF provides support. 

  • Privacy for Donors.  Charities that file Form 990 must disclose on Schedule B the name, address, total contributions, type of contributions, and a description of any noncash property contributed of every donor that gave more than $5,000 in the reporting year.
  • Privacy for United States Grantees.  A reporting charity also must disclose on Schedule I the name, EIN, amount of cash and noncash grants, and certain other information of every grantee to which the reporting charity granted more than $5,000 in the reporting year.  It must disclose also the amount of cash and noncash grants the reporting charity made to an individual or group of individuals.
  • Privacy for Foreign Grantees.  And a reporting charity must disclose on Schedule F the name, region, purpose of grant, amount of cash and noncash grants, and certain other information of every foreign grantee to which the reporting charity granted more than $5,000 in the reporting year.

It is true that a reporting charity may redact donor information when it provides a copy of its Form 990 to a member of the general public who asks for it, as required by law.  Also, government officials who receive and review Form 990 information returns are prohibited from disclosing such donor information.  Nevertheless, most donors desire privacy most of all FROM THE GOVERNMENT rather than maintenance of privacy by the government.  Moreover, even the Supreme Court has noted the history of at least one state, California, in leaking sensitive personal information of nonprofit donors; and New York has similarly leaked donor information for political purposes.  Such leaks are difficult to prevent, and difficult to punish.

Third, in general the information PCAF provides to the General Assembly in its report to its Committee of Commissioners is more comprehensive and detailed than is required for the Form 990.

PCAF is not a member of the Evangelical Council for Financial Accountability (ECFA) because, in summary:

  • it is and should be subject to the authority of, and accountable to, only Jesus Christ through the officers of his Church;
  • it in fact is accountable and does report to bodies, the PCA General Assembly and its Assembly-appointed board of directors, with incentives and power actually to oversee, investigate, adjudge, hold accountable, punish, remove officers, and require change;
  • it can and does publicly report its revenues, expenses, financial results and status;
  • it can and does publicly commit to all the governance standards of ECFA save one identified below (see Standards of Responsible Stewardship below), without the necessity of certifying to ECFA that it does so, making the payment of ECFA membership fees poor stewardship; and
  • PCAF believes its “accreditation” by ECFA would be misleading.

As noted in First Principles above, PCAF is the Church under the authority of and accountable to only Christ through the officers he has given to the PCA.  It is not a para-church organization.  We believe that to submit to the standards mandated by any organization other than the Church, or its general oversight, would be inappropriate.

For example, ECFA’s new Leadership Standard (number eight) requires each ECFA member to “proactively care for its leader and support the integrity of its leader in conformity with ECFA’s Policy for Excellence in Supporting Leadership Integrity.”  A draft of the mentioned policy includes requirements that:

  • the organization board discuss how the organization can provide appropriate spiritual, mental, emotional, physical, relational, and other care for its leader;
  • the organization board “follow up” with leader annually “on” the leader’s commitment to upholding undefined “biblical integrity principles;” and
  • the organization board document these annual discussion.

The necessity of care by PCAF, and how to care, for the president of the Foundation is a matter for consideration and determination by the officers of the Church of Jesus Christ, not ECFA.  Those officers may completely reject the therapeutic model reflected in the proposed Standard and Policy.  And whatever standard the Church officers may adopt is the responsibility of those officers, not an organization outside the Church, to enforce.

PCAF instead achieves transparency and accountability, as required by its theological commitments, through reporting and subjection to the courts of the PCA, most especially the General Assembly; and disclosure of its financial information to its board of directors and independent auditors, and publication of its auditor reports and audited financial statements, and reports of operations to PCA church members and the general public.  The General Assembly holds the power to remove members of the board of directors, and the president.  This is in sharp contrast to ECFA, which can impose as its most severe penalty only loss of membership.  Therefore, subjection to and accreditation by ECFA would be superfluous, and payment of ECFA dues wasteful.

PCAF makes the financial information and reports it provides to the General Assembly freely available to the general public through this webpage and other means.

Also through this webpage PCAF publicly commits to ECFA’s Seven Standards of Responsible Stewardship as standards of operation mandated by its theological convictions of purpose and governance, the Westminster Standards, and the policies for PCAF established by the General Assembly.

Finally, the understanding of PCAF, based on experience, is that the requirements for ECFA accreditation are simply subscription to the Seven Standards of Responsible Stewardship and payment of dues, and that audits or other methods of ECFA assuring actual compliance with the Standards are rare.  Accordingly, PCAF believes that obtaining ECFA accreditation would be misleading, and therefore it cannot in good conscience seek such accreditation.

PCAF subscribes to the following operational standards:

  1. PCAF subscribes to and operates in accordance with the Westminster Standards.
  2. PCAF is governed by a responsible board of directors of ten men, all of whom are independent, and who meet at least two times per year to establish policy and review PCAF’s accomplishments.
  3. PCAF prepares complete and accurate financial statements.  Its board and the finance committee of the board approves the engagement of an independent certified public accountant, reviews the annual financial statements, and maintains appropriate communication with the accountant; and will be apprised of any material weaknesses in internal controls or other significant risks.
  4. PCAF exercises the appropriate management and controls necessary to provide reasonable assurance that all of PCAF’s operations are carried out and resources are used in a responsible manner and in conformity with applicable laws and regulations (such conformity taking into account biblical mandates).
  5. PCAF will provide a copy of its current financial statements, complete, accurate, and reviewed by its board and the finance committee of its board, upon written request, and will provide other disclosures as the law may require.  It will provide a report, upon written request, including financial information, on any specific project for which it has sought or is seeking gifts.
  6. PCAF will set compensation of its president and address related-party transactions in a manner that demonstrates integrity and propriety, in conformity with the following policies:

Compensation-Setting: The board of directors will annually approve the president’s total compensation package, and will be notified annually of the total compensation package of any member of the president’s family who is employed by the organization or any of its subsidiaries or affiliates; and such approval and notification will be documented in the minutes of the organization’s board meetings.

  1. The board of directors will make the decision regarding total compensation, and those participating in the decision-making process may not have any conflict of interest in the decision, whether direct or indirect.  No such person may (a) be related to the president, (b) be subordinate to the president, (c) be a person whose compensation is determined in a manner that involves input or decision-making by the president, or (d) otherwise have a conflict of interest.
  2. The board of directors will obtain reliable comparability data with respect to the presidency, which will be for functionally comparable positions, and for organizations as similar as possible to PCAF, and will be updated at least every five years.
  3. The board of directors will determine appropriate total compensation taking into consideration such comparability data as well as the skills, talents, education, experience, performance, and knowledge of the president.
  4. The board of directors will document its compliance with the requirements described above.
  5. The board of directors will contemporaneously document its decision regarding total compensation and its rationale for establishing compensation at a level that exceeds what is supported by the comparability data.
  6. Directors who have a conflict of interest in determining total compensation will be recused from any deliberations regarding the compensation of the president.

Related-Party Transactions: The board of directors will properly address related-party transactions pursuant to PCAF’s sound conflicts-of-interest policy.  PCAF will not enter into a business transaction with a person or entity that meets the definition of a “disqualified person” under federal tax law applicable to public charities unless it takes affirmative steps to advance to ensure that the following is true with respect to the transaction:

  1. All parties with a conflict of interest (direct or indirect) are excluded from the discussion and vote related to approval of the transaction;
  2. PCAF obtains reliable comparability information regarding the terms of the transaction from appropriate independent sources such as competitive bids, independent appraisals, or independent opinions;
  3. The board of directors has affirmatively determined that entering into the transaction is in the best interests of PCAF; and
  4. PCAF contemporaneously documents the elements described above, as well as the board of directors’ approval of the transaction.
  5. Directors who have a conflict of interest with respect to the transaction will be recused from any deliberations regarding the transaction.
  1. PCAF will act as follows with regard to charitable gifts:
    1. In securing charitable gifts, PCAF will make representations of fact, descriptions of its financial condition, and narratives about events that are current, complete, and accurate.  It will appropriately date past activities and events.  It will not omit material facts nor materially exaggerate facts, use misleading photographs, or make any other communication which would tend to create a false impression or misunderstanding.
    2.  PCAF will honor statements made about its use of gifts in its charitable gift appeals.  It understands that a giver’s intent relates both to what PCAF communicated in its appeal, and to any instructions accompanying a gift accepted by PCAF.  PCAF’s appeals for charitable gifts will not create unrealistic expectations of what a gift will actually accomplish.
    3. PCAF will provide givers appropriate and timely gift acknowledgments.
    4. When dealing with persons regarding commitments on major gifts, PCAF’s representatives will seek to guide and advise givers to adequately consider their broad interests.  PCAF will make every effort to avoid knowingly accepting a gift from, or entering into a contract with, a giver that would place a hardship on the giver or place the giver’s future well-being in jeopardy.
    5. PCAF will not base compensation of outside consultants or its own staff directly or indirectly on a percentage of charitable contributions raised.