Exposing the Financial Fraud of the
International Churches of Christ (ICOC)   

Restricted Funds

Even in their own official policies, ICOC leaders made it obvious that they understand the law regarding “restricted” contributions.  To put it simply, if a collection is advertised as being for a specific purpose, then it is unlawful to use those collected funds for any other purpose.  So when “special missions contribution” funds don’t go to the “mission” field, but to “administrative overhead” or to “special projects” in the United States , this is a clear violation of the rules. 

Recently Andy Fleming, the current Middle East World Sector Administrator, has admitted that contributions given to SMC were not considered restricted but indeed unrestricted.  This admission goes against their own policy.  See Andy Fleming's admission regarding MEWS contributions.

Note the excerpt From ICOC Administrative Policies 2001, the governing document by which all affiliated churches were expected to abide:  

With respect to the solicitation of members or others for contributions for a specific program or purpose, Section 25 of the ICOC Administrative Policies should be consulted.

And here’s the corresponding section that shows that ICOC leaders still understood the law as late as 2003.  This is from ICOC Minimum Standards 2003:

 15.02 Classification of Regular Weekly Contributions v. Restricted Donations

Members may place "donor imposed conditions" or "donor-imposed restrictions" on their contributions. In the event that a member (or other individual) desires to make a "restricted" contribution, the Chief Financial Officer, Board of Directors, or member of any board approved financial committee should be consulted for proper handling of the donation. Regular weekly contributions generally do not have such restrictions.

Members of the local church or others may express an interest in making a donation for a specific program or purpose. Also, the local church leadership may desire to solicit contributions from the membership for a specific purpose or program. SFAS No. 116 requires that contributions be treated as "restricted" when an explicit (written or oral) donor-imposed restriction exists or when the circumstances surrounding the receipt of the contribution result in an "implicit" restriction.

Examples of explicit restrictions include members or others including written correspondence or oral instructions along with their donation indicating that the gift is to be used for benevolent needs within the church or for the acquisition of land, buildings or equipment. Examples of implicit restrictions would be donations made during or as part of the solicitation for the annual special missions contribution or the weekly collection for benevolence.

SFAS No. 116 requires that contributions received with temporary or permanent restrictions be reported separately from unrestricted contributions. SFAS No. 117 provides detailed guidance on the form and content of the financial statements including the reporting of the revenues, expenses, asset and net assets by the unrestricted, temporarily restricted and permanently restricted categories. The Chief Financial Officer or other responsible administrator is responsible for maintaining an accounting system that complies with these provisions and any applicable laws that require a separate accounting of funds from restricted contributions. 

So it they understood the rules, why weren’t they following them?  When a World Sector collects SMC for “missions” in that sector, how is it proper to divert funds to some other sector?  How is it proper to divert as much as 18% of SMC funds to Kip McKean’s own “slush fund”, which he describes as being used for the same purposes that the World Sectors would have been using their money?  How is it proper for HOPE to have its hand in the cookie jar of the local churches when they were collecting funds for “local benevolence”?  Even with the “regular weekly contribution”, is it proper for 4% of these funds to go to HOPE when the members don’t know about it?  Or how about the 4% that went to ICOC for an “administrative fee”?  Is it proper for the salary of the local HOPE coordinator to come out of the “contribution for the poor” that was advertised as being for local benevolence?

Why not just tell the members what you’re doing with the money?  Well, there are good reasons for that.  Suppose that the average member is giving $2-$5 per week “for the poor” and then you tell him that the local church hardly ever pays out any local benevolence to members who are in need?  What’s he going to think?

Or suppose he’s already given sacrificially to HOPE, out of his own pocket and from his own fundraising efforts, and then you mention to him, “Oh yeah, by the way, HOPE is not a viable enough business that it can support its own administrative overhead, so we’re going to take your “contribution for the poor” money and pay the salary of your local HOPE coordinator with it.

Or try telling the man that this Special Missions Contribution, for which he sold his television, wedding ring, motorcycle, and as many of his Van Halen CDs as he could pawn, is going to pay a yacht club allowance for his World Sector Leader.

One can see why the members are not trusted to know what is being done with the money, and why it has often been said that the members “would struggle” if they knew about the money.

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