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Whistleblower Policies and Church Culture
Whistleblower Policies and Church Culture
Protect financial strength and integrity by creating a culture of openness.
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Paul Utnage, an executive pastor, stood at a podium in a large conference room in Dallas this past February with an expression even more serious than the indictment he'd just hurled at the crowd of nearly 200 church leaders. He had told the gathering that more than 50 in the room were currently committing a serious moral failure.

He had been speaking statistically, of course; Utnage, whose church was 1,100 miles away in Bozeman, Montana, didn't know most of these leaders. He had meant that according to estimates, the number of church leaders currently committing a moral failure was a little more than one in four.

Utnage's history in ministry includes walking some 15 churches through crises. Of those, 10 involved a serious moral failure, including financial crimes.

Moral failures for church leaders include what often come to mind, like embezzlement and fraud, marital affairs, or pornography use. But the definition also covers areas of increasing scrutiny in churches, such as lying, manipulation, bullying, and narcissism. These can occur as easily in the area of church finance as anywhere else.

The power of a policy

Whistleblower policies—and the cultures that produce them—offer a safe way for someone who suspects a moral failure in the church, such as fraud or theft, to report it.

Nathan Salsbery of CapinCrouse said a whistleblower policy or hotline service is appropriate for any church. Salsbery works as a partner and National Director of Talent Development for CapinCrouse—a national CPA and consulting firm specializing in nonprofits. He noted that especially on the issue of fraud, tips from employees is the number one way wrongdoing is detected.

That statistic comes from a 2014 report by the Association of Certified Fraud Examiners. Those employee-originated tips led to two out of every five discoveries of fraud.

Church employees and members empowered with a whistleblower policy or hotline can be a crucial piece of any church's internal controls. Without such safeguards, those who suspect wrongdoing are significantly less likely to come forward. "A lot of times people will stay quiet because they don't have a safe outlet to voice their concerns," Salsbery said. And without a good whistleblower policy, "fraud is likely to go on longer."

Key elements of a policy

It can be difficult for churches to chart a course toward a sound policy. But there are some guidelines recommended by Salsbery. Any whistleblower policy should be reviewed by legal counsel, but key components will include a clear flow of communication detailing:

From Issue:
Church Finance Today, 2016, May
Posted April 19, 2016

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