National Religious Broadcasters Hit Rough Patch

2019 was supposed to be a season of celebration for the 75-year-old National Religious Broadcasters.  It would be the “diamond anniversary” for a group whose mission is to “advance biblical truth, promote media excellence, and to defend free speech.”

“You are God’s diamonds,” said NRB Board Chairman Michael Little in his Diamond Anniversary speech to the group’s annual International Christian Media Convention in March. “You take the pressure, you take the heat.”

Within three months, the pressure and the heat were rising, following a news report that NRB—a group whose more than 1,000 member ministries and organizations bring in hundreds of millions of dollars each year—was nearly bankrupt.

Independent journalist Julie Roys reported on NRB in her June 20 story, “National Religious Broadcasters on Brink of Bankruptcy & in Fight with Past President; ECFA Fails to Flag.” The article found that NRB:

• Experienced operating losses of $873,000 since 2014, meaning it was financially insolvent for each of the last three fiscal years;
• Needed $750,000 in donations by May to avoid closing its doors.

This was news to some of NRB’s nearly 100 board members, including Board Chairman Michael Little, who told Roys: “It was a surprise. When you’re told by people in positions of authority that (the financials) are looking good, you believe them.”

Where Was The ECFA?

In September, WORLD Magazine focused on the “ECFA” portion of Roys’ story, using NRB as Exhibit A in an article exposing a lack of accountability at the Evangelical Council for Financial Accountability.

The article by WORLD’s Deputy Editor Michael Reneau asked: “Does approval from the Evangelical Council for Financial Accountability offer Christians useful information about an organization’s financial discipline?”

WORLD’s answer was: “No.”

Of course, the ECFA has never claimed to be a watchdog.  ECFA members are about 2400 churches and ministries that comply with seven core standards identified by the ECFA.  These standards relate to governance, financial oversight, transparency, and other areas of ministry management.  When the ECFA has determined that an organization is in compliance, and after it pays a fee to the ECFA, it can become a member and has the right to post the ECFA logo on its promotional and fundraising materials.

However, because ECFA depends upon member dues for its survival, the larger the ministry, the more that ministry pays in dues.  So the ECFA incurs a financial cost when it terminates a  ministry’s membership.  Further, while the ECFA announces new members, it does not make a similar announcement when an organization leaves the ECFA.  Often, the first time the public learns of trouble at an ECFA member organization is when the media report on it.  Gospel for Asia and Mars Hill Church were stripped of its ECFA membership only after serious financial improprieties were reported by others.

Further, instead of maintaining independence from the organizations it claims to monitor, ECFA has allowed itself to become enmeshed with them. ECFA President Dan Busby has been a member of NRB’s President’s Council. And before Michael Little became NRB’s Board Chairman, he served as chairman and vice-chairman of ECFA’s Board of Directors.

ECFA dues paid by NRB member organizations generate more than $250,000 in revenue for ECFA.   That amounted to about 6.6 percent of the ECFA’s annual revenue of about $3.7-million.

In October, the ECFA announced that its long-time president Dan Busby would retire.  ECFA said Busby’s departure, scheduled for 2020, has been discussed since 2018 and was unrelated to the current controversy. A search for information on Busby’s departure on the ECFA website yielded no information.

NRB president Jerry Johnson resigned in February after six years as the top executive. Later, Johnson sent e-mails to NRB board members threatening legal action if NRB didn’t increase his healthcare benefits and severance pay. Board members leaked Johnson’s emails to Julie Roys.

At least two other senior NRB senior staffers have also resigned.

While NRB was celebrating its Diamond Anniversary with an expensive convention, its finances and membership rolls continued a decade-long decline.

Membership has dropped from some 1,400 members to 1,100.  Net assets have sunk from a reported $320,089 at the beginning of 2016 to -$165,811 by year-end.  (2016 is the last year financial statements on NRB are available.)

Despite this financial freefall and negative net worth, NRB is still a member in good standing with the ECFA, though its member profile on the ECFA site is sparse, and though it appears to have violated at least one of the ECFA’s ethical  standards, that of paying its vendors on time.  That standard reads: “I will honor my obligations to my vendors, neighbors, community and government.”

The organization reportedly took months to pay all its bills for its classy 2019 Diamond Anniversary convention.  The shortfall was made up only after Janet Parshall, the NRB chairman and the host of a popular national radio program, pled for donations.