Whistleblower Policies and Church Culture

Whistleblower policies protect financial strength and integrity by creating a culture of openness.

Paul Utnage, an executive pastor, stood at a podium in a large conference room in Dallas 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 executive vice president 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.

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:

1. The designated hotline or outlet for reporting.

2. The designated body—not just an individual—given authority by the board of elders to review and respond to any concerns.

State and federal statutes can also inform what churches can—or must—do under the law. The Sarbanes-Oxley Act of 2002 amended federal law to protect whistleblowers when reporting on federal law violations. Steven Goodspeed, an attorney and senior associate at law firm Anthony & Middlebrook, noted that churches aren’t required by the Act or by the Internal Revenue Service to adopt a policy. However, churches should have a policy for financial misconduct and other wrongdoings because it demonstrates “a commitment to an ethical and open work environment,” he said. He added that some state whistleblower laws may impose specific requirements on churches, and churches should know the whistleblower laws in their respective states.

The taboo of whistleblowing

If moral failures, such as embezzlement, are truly so common, why don’t people know about them? Why don’t church staff, those who work with these leaders every day, know about them?

Utnage said that in his experience “someone in the congregation is going to have seen or noticed something before the staff does.” The problem, he explained, often isn’t that there are no signs of a moral failure but that churches have unhealthy cultures in which whistleblowing is taboo.

Even having a conversation on whistleblowing can make people uneasy. Three church and nonprofit leaders approached for this story consented to speak—but only on the condition that what they said was off the record.

Goodspeed sees a problem in the way many churches treat allegations: “There can be concerns about fostering a culture of tattling or that whistleblowing is inconsistent with church discipline.” But welcoming whistleblowing shows a commitment to “good governance and employment practices.”

In most church cultures, the truth can be hard to verbalize. Staff are afraid of damaging or outright losing their jobs if they accuse someone of moral failure, especially if that person is a respected member of the church’s leadership. Those not on paid staff also have their own fears about blowing the whistle. Utnage said people in the congregation worry about losing trust, significance, or approval. There’s also the fear of no longer being able to attend church comfortably, he said.

Confronting the possibility of failure

Along with putting up important safeguards, the benefits of whistleblower policies and hotline services can’t be underestimated. “Primarily, you want to increase the perception of accountability, to create a culture of accountability,” Salsbery said. In other words, like ADT home security signs on lawns, a whistleblower policy can help prevent wrongdoing in the first place.

Over the years, Salsbery has worked on many crises with clients “where there wasn’t an accountability mechanism in place,” he said. “It’s devastating to the church.”

Most likely it’s so devastating because Christians have such a high view of the church and what it should be. If one in four church leaders really are committing a moral failure right now, churches will have to confront the possibility of moral failure in their midst, even as they strive for the highest standards in integrity, accountability, and stewardship.

Changing the culture

Are people in the church open to a whistleblower policy? “I think the church is an environment that assumes a high level of trust, so they feel they don’t need it,” said Terrence Chavis, CFO at Concord Church in Dallas. “It’s never easy to blow a whistle on people you work with and know very well. That’s doubly so in the church environment where God is involved and faith is involved.”

A whistleblower policy can be passed with as little as one board meeting. Changing an entire church culture to welcome whistleblowing is a much larger task.

“You have to talk about it all the time,” Utnage said, and communicating transparency has to be done with both staff and the congregation.

“We need to have a culture where if I’m caught, my first answer is going to be, ‘I expected that,’” Utnage advised. This kind of culture is open and safe, especially for a whistleblower. Moral failure is a betrayal. Conversely, Utnage admonished that when leaders don’t act on a whistleblower’s tip “you basically say ‘I’m going to betray the person who came to me,’ and you say you have an open culture, but it’s not.”

Utnage said this open culture goes to the very heart of what it means to be the church. “We almost have to bend over backwards more to keep our culture of integrity, which includes an expectation that we will lovingly, graciously, but honestly, authentically blow a whistle.”

This content is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. "From a Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers and Associations." Due to the nature of the U.S. legal system, laws and regulations constantly change. The editors encourage readers to carefully search the site for all content related to the topic of interest and consult qualified local counsel to verify the status of specific statutes, laws, regulations, and precedential court holdings.

ajax-loader-largecaret-downcloseHamburger Menuicon_amazonApple PodcastsBio Iconicon_cards_grid_caretChild Abuse Reporting Laws by State IconChurchSalary Iconicon_facebookGoogle Podcastsicon_instagramLegal Library IconLegal Library Iconicon_linkedinLock IconMegaphone IconOnline Learning IconPodcast IconRecent Legal Developments IconRecommended Reading IconRSS IconSubmiticon_select-arrowSpotify IconAlaska State MapAlabama State MapArkansas State MapArizona State MapCalifornia State MapColorado State MapConnecticut State MapWashington DC State MapDelaware State MapFederal MapFlorida State MapGeorgia State MapHawaii State MapIowa State MapIdaho State MapIllinois State MapIndiana State MapKansas State MapKentucky State MapLouisiana State MapMassachusetts State MapMaryland State MapMaine State MapMichigan State MapMinnesota State MapMissouri State MapMississippi State MapMontana State MapMulti State MapNorth Carolina State MapNorth Dakota State MapNebraska State MapNew Hampshire State MapNew Jersey State MapNew Mexico IconNevada State MapNew York State MapOhio State MapOklahoma State MapOregon State MapPennsylvania State MapRhode Island State MapSouth Carolina State MapSouth Dakota State MapTennessee State MapTexas State MapUtah State MapVirginia State MapVermont State MapWashington State MapWisconsin State MapWest Virginia State MapWyoming State IconShopping Cart IconTax Calendar Iconicon_twitteryoutubepauseplay