Ep. 392: Morningstar Ministries Turmoil, NRB Sues IRS over Johnson Amendment

MinistryWatch Podcast

On today’s program, Morningstar Ministries is undergoing a leadership shakeup…after its CEO resigned, allegations of sexual misconduct began to arise. We’ll have details.

And, many Christian colleges have fallen on hard times. But a Christian university in Georgia has been trying out new ways to grow enrollment…and it appears to be working. We’ll take a look.

Plus, Trinity International University is on the look out for a new president….just six months after its current president took the reins.

But first, the National Religious Broadcasters is suing the IRS over the Johnson Amendment.

The producer for today’s program is Jeff McIntosh. We get database and other technical support from Stephen DuBarry, Rod Pitzer, and Casey Sudduth. Writers who contributed to today’s program include Bob Smietana, Kim Roberts, Chris Moon, Tony Mator, and Brittany Smith.

A special thanks to the Christian Standard for contributing material for this week’s podcast.

Until next time, may God bless you.

MANUSCRIPT

FIRST SEGMENT

Warren:

Hello everybody. I’m Warren Smith, coming to you from Charlotte, North Carolina.

Natasha:

And I’m Natasha Cowden, coming to you from Denver, Colorado. And we’d like to welcome you to the MinistryWatch podcast.

Warren:

On today’s program, Morningstar Ministries is undergoing a leadership shakeup…after its CEO resigned, allegations of sexual misconduct began to arise. We’ll have details.

And, many Christian colleges have fallen on hard times. But a Christian university in Georgia has been trying out new ways to grow enrollment…and it appears to be working. We’ll take a look.

Plus, Trinity International University is on the look out for a new president….just six months after its current president took the reins.

Natasha:

But first, the National Religious Broadcasters is suing the I-R-S over the Johnson Amendment..

Warren:

A group of evangelical broadcasters is suing the Internal Revenue Service over the Johnson Amendment, a tax law that bars nonprofits from supporting political candidates.

Lawyers for the National Religious Broadcasters, along with two Baptist churches and a conservative group called Intercessors for America, argue in their suit that the ban on engaging in politics restricts their freedom of speech and freedom of religion. They further argue that the IRS ignores the politicking of some charities, while threatening to punish others.

Natasha:

Do they have examples to support their claim?

Warren:

Lawyers for the groups claim that newspapers and other news outlets that have become nonprofits in recent years, such as the Philadelphia Inquirer, endorse candidates. Why can’t churches or other Christian groups, they want to know, do the same?

Natasha:

The lawsuit is the latest challenge to the Johnson Amendment, a 1954 law that has long been the bane of conservative groups and, in particular, preachers seeking to become more involved in politics. The ban on taking sides in campaigns — including endorsements or campaign contributions — applies to nonprofits that fall under section 501(c)(3) of the IRS code.

Warren:

The current lawsuit pitches its argument toward religious freedom principles.

But the growing number of nonprofit newsrooms has added a new twist to the arguments over the Johnson Amendment that has to do with fairness. Those newsrooms, the complaint argues, should be required to abide by the same rules as other charities.

The complaint points specifically to the Inquirer’s candidate endorsements, as well as articles critical of candidates in other nonprofit publications from 2012 to the present, claiming all violated IRS rules with impunity.

A spokesman for the IRS declined to comment, citing the pending litigation. The NRB did not respond to a series of questions from RNS about the lawsuit.

Natasha:

Next, the president of MorningStar Ministries, a prominent charismatic ministry just outside of Charlotte, has resigned.

Warren:

Chris Reed, president and CEO of MorningStar Ministries in Fort Mill, S.C., tendered his resignation last week because he “didn’t want to be leading the ministry in a case against four victims who were abused as children by a volunteer.”

A lawsuit filed in South Carolina state court on August 7 alleges that Morningstar Fellowship Church created a youth program involving overnight events and campouts and allowed Erickson Lee, a relative of one of the church youth program leaders, access to minor males who he allegedly sexually exploited and abused.

Natasha:

Reed said that resigning was a tough and painful choice, but that it was “not a fight [he] wanted to fight.”

Warren:

But after his resignation came reports of alleged sexual misconduct by Reed in 2021 when he was preparing to become leader of MorningStar Ministries.

Reed, who is married and has six children, admitted to sending “terrible texts” and kissing another woman, but that “there was no sexual encounter.”

According to the woman, Reed initiated contact with her in November 2021 through private Facebook messages. He gave her his personal cell number, which led to texting and meetups in Reed’s van.

Natasha:

What’s going to happen with MorningStar now?

Warren:

In the wake of Reed’s resignation, Rick Joyner, who founded MorningStar Ministries, is taking over as CEO and president. He said in a statement to the congregation on September 1 that Reed’s resignation came as a shock.

Joyner also confirmed that he and the board of MorningStar were told about Reed’s “transgression” at the time of his elevation to leadership.

He said both the woman and Reed admitted to wrongdoing, but both said there was no physical contact.

The board believed Reed and “put [him] in a restoration process” for about 18 months before he took the leadership role permanently.

Natasha:

This is not the first time that Morningstar Ministries has been embroiled in controversy.

Warren:

Ad lib.

Natasha:

Warren, let’s take a quick break. When we return, Point University continues to see growing enrollment as other Christian colleges and universities struggle to stay afloat. What is their strategy and how is it working?

I’m Natasha Cowden, along with my co-host Warren Smith, and we’ll have that story and much more, after this short break.

BREAK

SECOND SEGMENT

Natasha:

Welcome back. I’m Natasha Cowden, along with my co-host Warren Smith, and you’re listening to the MinistryWatch podcast.

Next, the story we promised before the break, Point University is growing its enrollment through employer ‘subscription’ program.

Warren:

The college in West Point, Ga., has seen its total enrollment grow to roughly 2,400 students. Half of those students are part of Point’s “Elevate” program, which enables employers to pay a flat, monthly subscription fee to enable their workers to take online classes at Point for free.

Point’s total enrollment two years ago stood at about 1,500. Today, the Elevate program is the largest student program at Point University — followed by its dual-credit and traditional, on-campus programs.

Natasha:

How did they develop this program?

Warren:

Point University started its subscription program in the fall of 2022 with deals in place for 262 Chick-fil-A franchise owners in 38 states.

The plan enticed more than 700 Chick-fil-A employees to enroll during the first six months of the program. Students only had to pay for books and seek any federal grants for which they might qualify.

Point now has subscription agreements in place with multiple construction companies, including one with more than 500 employees. The program also is serving smaller telecom and broadband companies, as well as other employers.

Right now, Point has about 340 business contracts in place. Students have come to Point from 40 states through the program.

Natasha:

Other than chick-fil-a what kind of companies enroll?

Warren:

Participating companies mostly are in blue-collar industries and are privately-owned firms with 25 to 400 employees. Subscription rates can range from $6,000 to $80,000 per year, depending on the size of the company and the demographics of its workforce.

Among other things, Point considers the percentage of a company’s workers who don’t have college degrees.

Natasha:

Next, a Pastor has been Sentenced for paycheck protection program Loan Fraud and Money Laundering

Warren:

The pastor of Kingdom Tabernacle of Restoration Ministries in Washington, D.C., will serve 18 months in prison and two years of supervised release after pleading guilty to wire fraud and money laundering.

Rudolph Brooks Jr. fraudulently obtained $3.5 million in Payroll Protection Program (PPP) loans and then used the funds on personal expenses, including a 2018 Tesla Model 3 and property in Maryland.

Natasha:

How was he discovered?

Warren:

Brooks was arrested in April 2021 after law enforcement determined he diverted a $1.5-million PPP loan he had obtained for a business named Cars Direct for his personal expenses.

He also obtained other loans, including $1.8 million for Kingdom Tabernacle of Restoration Ministries and $200,000 for Madaro, LLC.

To obtain the loans, Brooks inflated employee numbers and average monthly payroll expenses on the loan applications.

Brooks was the sole signatory on each of the accounts where the loan money was deposited.

Natasha:

Our next story also covers fraud.

Warren:

The treasurer of a church’s charitable foundation pleaded guilty to two counts of wire fraud. He was sentenced to more than seven years in prison last week, and ordered to pay restitution of over $1.7 million to various victims.

Thomas Calhoun Bain, a self-described stock trader, admitted that over the course of about six years when he had access to and authority over the charitable foundation’s bank accounts, he represented to the foundation that another entity (Entity B) engaged in gospel initiatives in keeping with the foundation’s mission.

The federal court documents did not name the church, charitable foundation, or Entity B; Bain lived in Dallas, Texas.

Natasha:

Because of Bain’s misrepresentations about Entity B, the foundation authorized 15 large monetary donations to it.

Warren:

Bain then misled Entity B into believing it should transfer the funds to his account for distribution to various charities.

Bain fraudulently obtained $1.4 million from the charitable foundation, none of which was used to support gospel-based initiatives.

Bain also admitted to defrauding investors from 2010 to 2022 through his company BainTrade. He represented himself as a “trader,” although he had no professional licenses, certification, training, or specific educational background in investing.

Instead of real investments, Bain engaged in a Ponzi-type scheme, using new investor funds to make distribution payments to prior investors.

He also used these funds toward his lifestyle expenses to imitate the appearance of a wealthy and successful “trader.”

Natasha:

Warren, we’re going to take another break. When we return, our lightning round of ministry news of the week.

I’m Natasha Cowden, with my co-host Warren Smith. More in a moment.

BREAK

THIRD SEGMENT

Natasha:

Welcome back. I’m Natasha Cowden, with my co-host Warren Smith and you’re listening to the MinistryWatch Podcast.

Warren, we like to use this last segment as a sort of lightning round of shorter news briefs.

What’s up first?

Warren:

Just six months after beginning his tenure as the 17th president of Trinity International University, Kevin Kompelien announced the presidential seat is back on the market—a development he says was planned from the start.

In a public address posted Aug. 30 on TIU’s website, Kompelien explained that his intent to retire in the summer of 2025 carried over from his previous role as head of the Evangelical Free Church of America, TIU’s denominational affiliation.

Kompelien said. “When the TIU Board of Regents asked the EFCA Board of Directors to release me to serve as president of Trinity, it was with the understanding that my availability to serve either the EFCA or TIU in a full-time capacity was limited by my plans to retire in the summer of 2025,” “Since that transition in March, I have been clear about my personal plans and timeline with EFCA leaders, TEDS faculty and staff, and students.”

The next president will be TIU’s fifth since 2009, when Craig Williford was hired after the seat stood vacant for a time following the resignation of Greg Waybright, who served from 1995 to 2007. In June this year, Waybright was honored with the title of president emeritus.

Natasha:

Speaking of Christian colleges, we have our updated list of the 50 Largest Christian Colleges and Universities in the U-S.

Warren:

We do.

This list is compiled from the most recent data available from the Internal Revenue Service, which in all cases means we used 2023 data.

They are ranked by total revenue, and not by effectiveness, financial efficiency, or any other measure. That said, the Financial Efficiency rating and the Transparency Grade of the ministries are listed. We also listed the 2023 rank of each college.

Natasha:

Was there a lot of movement on the list?

Warren:

This list is usually fairly static from year to year. Indeed, the first six colleges remain unchanged from last year’s list. Grand Canyon University kept the top spot, narrowly topping Liberty University. There were no additions to the top 10 colleges, though Hillsdale moved from #8 to #7 and Samford fell from #7 to #10.

Natasha:

But there were a few changes farther down the list.

Warren:

There were.

Here are a few other significant changes:

• Grove City College jumped from #47 to #38. This was the biggest jump on this year’s list.
• Moody Bible Institute registered the biggest decline, falling from #11 to #40.
• Dordt University made the Top 50 list for the first time, entering the list at #49.
• Hardin-Simmons saw a revenue decline of $12 million and fell off the list.
• Other colleges that made significant upward moves include Palm Beach Atlantic (25 to 20), Dallas Baptist (32 to 24), and Taylor University (39 to 33).
• Colleges with significant drops in their rankings include Bethel University – Minnesota (22 to 35) and Ashland College (19 to 32).

You can see the entire list at MinistryWatch.com

Natasha:

That’s not the only new list on the website.

Warren:

We also have our top 10 stories for the month of August. If you missed out and need a quick refresh on what’s been happening in the world of Christian ministries over the past month, you can check out that list on the MinistryWatch website with links and quick summaries of each story.

Natasha:

And who is in our Ministry Spotlight this week?

Warren:

This week, the Tim Tebow Foundation’s (TTF) ratings changed in two different MinistryWatch categories. Its Financial Efficiency rating fell from 3 stars to 2 stars, prompting its Donor Confidence Score to drop from 95 to an 80 (still within the “Give With Confidence” tier).

MinistryWatch’s Financial Efficiency rating is based, in part, on Asset Utilization. Asset Utilization measures the way an organization uses its assets to further its programming and operations. An organization with fewer financial liabilities, like net assets or debt, will have a higher score.

As of 2022, the Tim Tebow Foundation has $44.5 million in net assets, giving it a 1-star Asset Utilization rating. This marks a significant increase from 2020, when the organization had $16.7 million in net assets.

Natasha:

Over the last few years, the organization, its revenue and expenses have jumped around significantly.

Warren:

From 2020 to 2021, its revenue spiked from $10.3 million to $40.1 million. It then dropped down to $21.9 million in 2022. Meanwhile, its expenses grew steadily from $8.1 million to $19.4 million between 2020 and 2022.

Headquartered in Jacksonville, Fla., and founded by former NFL quarterback Tim Tebow, the organization focuses on four main initiatives: Anti-Human Trafficking and Child Exploitation, Orphan Care + Prevention, Medical Needs and Special Needs Ministry.

Natasha:

Warren, any final thoughts before we go?

Warren:

8 Tales of Transformation

Webinar: Introduction to Intelligent Giving with Al Mueller of Excellence in Giving.

Natasha:

The producer for today’s program is Jeff McIntosh. We get database and other technical support from Stephen DuBarry, Rod Pitzer, and Casey Sudduth. Writers who contributed to today’s program include Bob Smietana, Kim Roberts, Chris Moon, Tony Mator, and Brittany Smith.

A special thanks to the Christian Standard for contributing material for this week’s podcast.

I’m Natasha Cowden, in Denver, Colorado.

Warren:

And I’m Warren Smith in Charlotte, North Carolina.

Natasha:

You’ve been listening to the MinistryWatch podcast. Until next time, may God bless you.