Key point. Most state nonprofit corporation laws give members of a nonprofit corporation a legal right to inspect specified corporate records. Churches incorporated under such laws are subject to these same provisions, meaning that members may have a right to inspect some church records. Such a right of inspection does not violate the first amendment.
A Louisiana court ruled that an incorporated church had to allow members to inspect church records.
Four members asked for permission to inspect the following records of their church: (1) bank statements from 1994; (2) the check register and cancelled checks for all the church's bank accounts from 1994; (3) the cash receipts journal from 1994; and (4) monthly financial reports from 1994. The pastor of the church denied the members' request. The members then sought a court order compelling the church to permit them to inspect the records. The pastor insisted that such an order would interfere with "internal church governance" in violation of the first amendment. A state appeals court ruled that allowing the members to inspect records, pursuant to state nonprofit corporation law, would not violate the first amendment.
The Louisiana nonprofit corporation law gives every voting member of a nonprofit corporation the right to "examine, in person … at any reasonable time, the records of the corporation." The court noted that the persons seeking to inspect church records were members, and that the church was incorporated under the nonprofit corporation law. As a result, the requirements for a right of inspection were met. Further, this right did not violate the first amendment guaranty of religious freedom.
The court quoted from an earlier Louisiana Supreme Court ruling addressing the same issue:
A voting member of a nonprofit corporation has a right to examine the records of the corporation without stating reasons for his inspection. Since the judicial enforcement of this right does not entangle civil courts in questions of religious doctrine, polity, or practice, the first amendment does not bar a suit to implement the statutory right.
First amendment values are plainly not jeopardized by a civil court's enforcement of a voting member's right to examine these records. No dispute arising in the course of this litigation requires the court to resolve an underlying controversy over religious doctrine.
The court concluded: "Likewise, in the case before us, there is no entanglement in questions of church doctrine. The trial court … was not deciding or even delving into the underlying religious dispute, if any. The court was simply enforcing the members' right to examine financial records, whatever the members' reasons or the merit of their complaint."
What this means for churches
Many churches are incorporated under nonprofit corporation laws that give members a limited right to inspect records. The inspection right is limited, because
- it only applies to members;
- it only applies to members of churches that are incorporated under the nonprofit corporation law;
- members generally have a right to inspect documents only for a "proper purpose" at a "reasonable time"; and
- nonprofit corporation laws often specify those documents that may be inspected.
Church leaders who are presented with a request by a member to inspect church records should refer to the nonprofit corporation law under which the church is incorporated. If the church is not incorporated, then members generally do not have a legal right to inspect records unless such a right is granted by the church charter or bylaws.
Jefferson v. Franklin, 692 So.2d 602 (La. App. 1997).