- Doctrinal Statement—Every member organization shall
subscribe to a written statement of faith clearly affirming its commitment
to the evangelical Christian faith, and shall conduct its financial and
other operations in a manner which reflects those generally accepted
biblical truths and practices.
- Board of Directors and Audit Review Committee—Every
member organization shall be governed by a responsible board of not less
than five individuals, a majority of whom shall be other than
employees/staff and/or those related by blood or marriage, which shall
meet at least semiannually to establish policy and review its
accomplishments. The board shall appoint a functioning audit review
committee, a majority of whom shall be other than employees/staff and/or
those related by blood or marriage, for the purpose of reviewing the
annual audit and reporting its findings to the board.
- Audited Financial Statements—Every member
organization shall obtain an annual audit performed by an independent
certified public accounting firm in accordance with generally accepted
auditing standards (GAS), with financial statements prepared in accordance
with generally accepted accounting principles (GAAP).
- Use of Resources—Every member organization shall
exercise management and financial controls necessary to provide reasonable
assurance that all resources are used (nationally and internationally) to
accomplish the exempt purposes for which they are intended.
- Financial Disclosure—Every member organization shall
provide a copy of its current audited financial statements upon written
- Conflicts of Interest—Every member organization shall
avoid conflicts of interest. Transactions with related parties may be
undertaken only if all of the following are observed:
- a material transaction is fully disclosed in the audited financial
statements of the organization;
- the related party is excluded from the discussion and approval of
- a competitive bid or comparable valuation exists;
- and the organization’s board has acted upon and demonstrated that
the transaction is in the best interest of the member organization.
- Fund-Raising—Every member organization shall comply
with each of the ECFA Standards for Fund-Raising:
Truthfulness in Communication—All representations of fact,
description of financial condition of the organization, or narrative
about the events must be current, complete and accurate. References to
past activities or events must be appropriately dated. There must be no
material omissions or exaggerations of fact or use of misleading
photographs or any other communication, which would tend to create a
false impression or misunderstanding.
- Communication and Donor Expectation—Fund-raising appeals must not
create unrealistic donor expectations of what a donor’s gift will
actually accomplish within the limits of the organization’s ministry.
- Communication and Donor Intent—All statements made by the
organization in its fund-raising appeals about the use of the gift must
be honored by the organization. The donor’s intent is related to both
what was communicated in the appeal and to any donor instructions
accompanying the gift. The organization should be aware that
communications made in fund-raising appeals may create a legally binding
- Projects Unrelated to a Ministry’s Primary Purpose—An organization
raising or receiving funds for programs that are not part of its present
or prospective ministry, but are proper in accordance with its exempt
purpose, must either treat them as restricted funds and channel them
through an organization that can carry out the donor’s intent, or return
the funds to the donor.
- Incentives and Premiums—Organizations making fund-raising appeals
which, in exchange for a contribution, offer premiums or incentives (the
value of which is not insubstantial, but which is significant in
relation to the amount of the donation) must advise the donor of the
fair market value of the premium or incentive and that the value is not
deductible for tax purposes.
- Reporting—On request, an organization must provide a report,
including financial information, on the project for which it is
- Percentage Compensation for Fund-Raisers—Compensation of outside
fund-raising consultants or an organization’s own employees, based
directly or indirectly on a percentage of what is raised or on any other
contingency agreement, is not allowed.
- Tax Deductible Gifts for a Named Recipient’s Personal
Benefit—Tax-deductible gifts may not be used to pass money or benefits
to any named individual for personal use.
- Conflict of Interest on Royalties—An officer, director, or other
principal of the organization must not receive royalties for any product
that is used for fund-raising or promotional purposes by his/her own
- Acknowledgment of Gifts-in-Kind—Property or gifts-in-kind received
by an organization should be acknowledged describing the property or
gift accurately without a statement of the gift’s market value. It is
the responsibility of the donor to determine the fair market value of
the property for tax purposes. The organization should inform the donor
of IRS reporting requirements for all gifts in excess of $5,000.
- Acting in the Interest of the Donor—An organization must make every
effort to avoid accepting a gift from or entering into a contract with a
prospective donor which would knowingly place a hardship on the donor,
or place the donor’s future well-being in jeopardy.
- Financial Advice—The representative of the organization, which
dealing with persons regarding commitments on major estate assets, must
seek to guide and advise donors so they have adequately considered the
broad interests of the family and the various ministries they are
currently supporting before they make a final decision. Donors should be
encouraged to use the services of their attorney’s, accountants, or
other professional advisors.