Is World Vision International Really a ‘Church’?
By now, most people have heard that World Vision’s representative in the Gaza Strip, Mohammed Halabi, has been charged with diverting charitable donations to Hamas, an antisemitic terror organization.
It’s a terrible scandal that will likely harm World Vision’s reputation for many years to come. The allegations are serious and, if proven in court, will do more than result in Halabi spending time in jail.
The charges will also demonstrate that World Vision needs to do a much better job preventing its assets from being stolen by terror organizations and warlords. A charity that derives its income from child sponsorship programs simply cannot allow donations to be sent to terrorists. People want to sponsor children, not Jew-hating terrorists.
At the very least, World Vision will also have to be much more transparent in its dealings with its donors and the international community.
Interestingly enough, World Vision’s umbrella organization, World Vision International (WVI), which oversees the operations of World Vision’s affiliates throughout the world, made a significant change in policy regarding the information it provided to the Internal Revenue Service.
WVI, which had been designated as a “church” under Federal tax law (an odd designation given the criteria for such a designation), stopped filing 990s with the IRS in 2007, stating at the top of the paperwork it provided: “WORLD VISION INTERNATIONAL IS A CHURCH AND HAS NO FILING REQUIREMENT.’ In the years prior to this change, WVI had submitted 990s on a voluntary basis.
These forms ask for a lot of information about charitable operations, which journalists and activists have found very useful when keeping non-profits accountable.
John Montague writes in the Cardoza Law Review:
Most tax-exempt organizations are required to file the IRS Form 990, an information return that is open to the public. The Form 990 is used by watchdogs and donors to learn detailed financial information about charities. However, churches are exempt from filing the Form 990 and need not disclose any financial information to the IRS, the public, or their donors.
In the years since WVI stopped filing 990s, the organization has submitted “accountability documents” that are not much different from the annual reports that charities provide to their donors.
World Vision International has described these documents as similar to or the equivalent of the 990s it historically submitted to the IRS. Nevertheless, donors have good reason to wonder why the organization changed its tax status. WVI’s Accountability Report for 2012 states that it provides “only high level information on incidents recorded and actions taken” when dealing with “incidents of corruption including fraud and sexual exploitation and abuse.”
John Montague argues that exempting churches from 990 reporting requirements makes it harder for donors and congregants to hold their leaders accountable and as a result, makes such institutions more vulnerable to scandals such as those that rocked the televangelist community in the 1980s.
“Requiring churches to file a Form 990 would guarantee that both the public and churchgoers have access to financial information that would enable them to monitor how churches are using their donations,” he writes. “Such monitoring would make churches accountable to the public and to their donors.”
Charity Navigator, a non-profit that posts 990s online for researchers, stated in 2008 that for churches, “registering with the IRS is optional, not required – regardless of the church’s size. For other public charities you must have less than $5,000 in gross receipts to be tax exempt without registering.” But “every other type of public charity over $25,000 or more in annual gross receipts must file a report to the IRS (called a 990) every year.”
The article continues:
The churches are under no obligation to do so and the vast majority do not. In other words, over $100 billion dollars (that is an estimated amount, since we can not know for sure) was donated to churches last year and most do not report any information to the IRS on how much was taken in and what they did with the money. Doesn’t that seem wrong?
If increased reporting requirements are imposed on churches, then World Vision International will have a problem, because its affiliates operate in war zones and its local employees oftentimes have to tolerate a significant amount of theft and corruption just to be able to operate. Having to report about this theft in detail and on a regular basis might undermine the willingness of donors to support the organization, whether it is designated as a church or not.
Simply put, tolerating a certain amount of diversion of charitable donations is part of the business that World Vision is in. In an important 1994 essay about humanitarian aid, Alex de Waal introduces the word “fieldcraft” to describe how officials from humanitarian organizations make “compromises with the authorities for the greater good.”
Field officers use their discretion to tolerate “a certain degree of … corruption and extortion,” he writes.
De Waal warns, however, that: “Absent systematic accountability and a clear set of principles for the limits of acceptable compromise, it is a recipe for getting sucked into very adverse bargains.” (Sounds familiar, doesn’t it?)
De Waal also reports, “Agencies are notoriously unwilling to close down programmes once they have started, and what started off as an ‘acceptable’ rate of diversion may rapidly become much worse — but still remain accepted.”
The upshot is that by changing its 990 policy in 2007, World Vision International may have prevented its donors from learning about some of the compromises it needed to make in order to keep operating in the Gaza Strip and other locales.
All this being said, the allegations against Halabi go far beyond the “fieldcraft” that de Waal described. The allegations indicate he wasn’t shipping stuff to Hamas so he could keep helping kids, but that he was helping kids as a pretext to get resources to Hamas.
This is simply outrageous.
The allegations against Halabi have highlighted at least two questions that responsible journalists should start to ask:
1. Does World Vision International really qualify as a “church”?
2. Would the more stringent reporting requirements as required under the 990 form have protected the organization, its donors, and its intended recipients from this scandal, which has proven so damaging?