In January 2005 the National Committee for Responsive Philanthropy released a white paper titled, "Funding the Culture Wars: Philanthropy, Church and State". Absent from the report was the National Christian Foundation, even though it had poured more money into evangelical groups over the past four years--more than $385 million-- than the combined donations of the 37 groups on NCRP's list. NCF was also missing from the Foundation Center's Top 50 U.S. Foundations Awarding Grants for Religion, circa 2003. The combined total donations from these 50 foundations were $300.5 million. That same year NCF alone gave out more than $113 million, far outstripping such well-known benefactors to the Religious Right as the DeMoss, Devos, Maclellan, Prince, Coors and Leininger private foundations.

NCRP president Rick Cohen said the reason the National Christian Foundation was missing from their list was because their report only covered private foundations. The NCF is a different creature entirely--a public charity donor advised fund.

When Terrill A. (Terry) Parker, a seasoned Atlanta tax lawyer, created the National Christian Charitable Foundation in 1982 his method was so cutting edge that he sought a ruling from the Internal Revenue Service to ensure it was legal.

The NCF touts itself as "a non-profit, law firm, accounting firm and trust company all rolled up inside a foundation", a "Christian ministry" devoted to teaching "valuable ways to invest dollars into God's Kingdom, rather than surrendering those dollars to the federal government."

Cohen asked if he could see more about NCF, so a volume of documents were sent to his office. After several days Cohen was back on the phone. He was either excited or distressed.
"I haven't seen anything like NCF in all the years since I began been monitoring charities," he said. "They've created a money making machine far beyond anything. There's certainly nothing comparable on the progressive side, nothing that comes close to generating this amount of capital."

Cohen was struck by the layers of interlocking relationships with the Religious Right. "This isn't just coordination--these are the same people running the whole thing."

"It's a one-stop shop for conservative funders," he continued. "Here's a place to park their money and put it to work. These people have discovered every conceivable mechanism to generate capital. Its unparalleled."

In 2004 NCF was ranked by the Chronicle of Philanthropy as sixth among the 88 largest donor-advised fund in the nation, a position it has held for the past four years. With over $450 million in assets, NCF is well behind the commercial funds of Fidelity Investments and Vanguard. Fidelity tops the Chronicle's list with $3 billion in holdings. In 2004 NCF paid out $220 million in grants nearly doubling the amount they disbursed the year before.

Earlier this year, in an interview with Philanthropy , the magazine of the conservative Philanthropy Roundtable, NCF president David Wills set out the reasons for NCF's phenomenal growth. "There are two factors," he said. "First is the continued rise in the number of complex gifts we handle. Increasingly, people aren't only asking, `Should I give to charity?' They're also asking, `What is the wisest way for me to give?' And while the number of groups serving donors is on the rise, NCF is one of the few with extensive experience serving donors who want to give from sources other than cash or publicly traded stocks."

The NCF defines their donor-advised fund as "a vehicle by which individuals or organizations make an irrevocable, tax-deductible contribution to an organization, then recommends to that organization how the gift should be distributed to charities. The gift from the donor is invested, creating an opportunity for the gift to grow. Donor advised funds at The National Christian

Foundation are called Giving Funds." The NCF requires a minimum contribution of $10,000 to open a fund.

The IRS has no legal definition for donor-advised funds. In its report to Congress on nonprofit accountability, the Independent Sector described them as " a fund created by an irrevocable gift to a the charitable organization, in which the donor (or adviser designated by the donor) has the right to provide non-binding recommendations to the charitable organization regarding distributions from the fund and, less commonly, the investment of its assets. The charitable organization that owns the fund...has a fiduciary obligation to ensure that donor-advised assets are used exclusively for charitable purposes."

The sweet attraction of donor-advised funds is their tax deductions of "up to 50% of adjusted gross income for cash contributions and 50% of adjusted gross income for securities or other assets." In a private foundation these deductions are 30% and 20%. Aside from cash, these donations can include real property, public and privately held stocks, limited partnerships, business interests and other non-liquid assets. As a bonus these funds virtually guarantee anonymity for the donor.

In April 2005 the Senate Finance Committee began hearings on charitable reform. IRS Commissioner Mark Everson sat before the Senators and testified that pockets of abuse were spreading among the 1.8 million US not-for-profits. Everson was most troubled by the rampant donor-advised funds, their supporting organizations, and the stunning inflation of deductions and executive compensation these charities were producing. The IRS chief described "a gathering storm" of tax abuse that had prompted his investigators to launch probes into 200 charities .

"I think there are some really bad ones out there," said Dr. Frances R. Hill, a professor at University of Miami School of Law. A tax and campaign finance specialist , Hill has testified numerous times before both House and Senate committees on non-profit abuses.

"These are ones where the donor is not giving up control of their assets in the fund. They're just using it as a tax shelter, just trafficking in charitable funds. And these funds--apart from the commercial ones--reside in community foundations and the community foundations are sacred cows, one has to tread carefully. As for the good ones, we sometimes find there are some bad ones behind them."

With donor-advised funds, the emphasis is on "advised." The final decision of where the money goes is not up to the donor, but subject to approval by the foundation.

At their web site one learns that "when you choose to work with NCF, you get a partner that shares your Biblical perspective on giving. NCF never supports ministries that are antithetical to the Christian cause, and our board of Directors strongly adheres to conservative Christian principles."

More specifically, the NCF "seeks to advance the principles of the Christian religion by providing distributions to Christian beneficiaries who, in the discretion of NCCF's Board of Directors, hold to doctrines and beliefs which include the following: (a) there is but one true God; (b) the Bible is the infallible Word of God delivered to man through Divine inspiration; (c) Christ is the Son of God and is equal with God and the Holy Spirit; and (d) the only hope for the salvation of any person is faith in the shedding of Christ's blood as atonement of sins, Christ's death on the cross and Christ's bodily resurrection."

Millions of dollars flow from NCF into every major and minor ministry, broadcaster, policy tank and advocacy group on the Christian Right. Since 1999 James Dobson's Focus On The Family has received more than $10 million. The Family Research Council, co-founded by Dobson and led by Tony Perkins, was awarded $4 million. NCF was even more generous to Campus Crusade For Christ, founded by Religious Right pioneer Bill Bright and to Atlanta's star evangelist, Egyptian-born Michael Youssef's Church of the Apostles and his international broadcast ministry Leading The Way with each receiving $22 million.

The Religious Right legal powerhouses-- the Alliance Defense Fund and the American Center for Law and Justice-- lapped up $2.7 million. Another $1.5 million was channeled from Atlanta into "creation science" proselytizers--The Discovery Institute, Answers In Genesis and Institute for Creation Research. NCF's gift list to the politically charged Religious Right goes on and on--from the predominant groups headed by Dobson, Chuck Colson, D. James Kennedy, Gary Bauer, Don Wildmon, Ted Haggard, Beverly LaHaye and Jerry Falwell to the outright theocratic ministries led by Christian Reconstructionists Gary Demar, Doug Phillips and Mark Rushdoony.

Millions more have gone to global evangelical Christian efforts out of the USA. Especially favored are ministries targeting countries within what they call the "10/40 Window" that frames Africa, the Middle East, South Asia and India. NCF has put more than $2 million into SAT-7, the satellite broadcasting system for evangelical proselytizing that targets the Middle East and Iran and millions more into Youssef's Leading The Way broadcasts in Arabic and Farsi.

Then there are those on NCF's gift list that one might not readily associate with the foundation's pledge to exclusively support groups that proclaim "the gospel of Jesus Christ." These include The American Conservative Union, The Heritage Foundation, Cato Institute, Free Congress Foundation, Accuracy In Media, The Federalist Society, Judicial Watch, The Center for Public Justice, The Capital Research Institute, the American Foreign Policy Council, The Center for Libertarian Studies and The Ludwig von Mises Institute. NCF is also consistently generous to the groups within the State Policy Network, an extension of Weyrich's American Legislative Exchange Council. The SNP has 40 state-based right-wing organizations in 37 states that are linked to Focus On The Family, The Heritage Foundation and Free Congress Foundation. NCF has spread more than $3 million among 11 of these groups, with half that amount going to the Georgia Public Policy Foundation.

The founders and directors of NCF along with their biggest donors either sit on the boards or are veteran leaders of organizations receiving NCF's largesse. Some are members of the media-shy Council For National Policy, the elite 400 of the religious and political right who convene behind closed doors to strategize and implement their agendas. In an interview last March with CSPAN's Brian Lamb, architect of the Religious Right, Paul Weyrich described the secretive group as "where the big doers meet the big donors to get things done."

In December 1982, six months after the Council For National Policy's first meeting, NCF was co-founded by Atlanta tax attorney Terry Parker, bible-based investment adviser Ron Blue and the late Christian financial pundit and CNP charter member Larry Burkett.  Burkett, who died from cancer in 2003, began his service in the Christian Right in the 1970s as financial director with Bright's Campus Crusade For Christ. In 1994 Dobson and Burkett, along with Bill Bright, D. James Kennedy, Gary Bauer and Donald Wildmon formed the Alliance Defense Fund and installed Allan Sears as its director. All were members of the CNP.

NCF board members Jim Blankemeyer and Anthony Wauterlek are also CNP members. In addition, Wauterlek serves as a director of Focus On The Family board, joining with eight other CNP members including Dobson and his wife, Shirley. In 1998 David Wills left Focus On the Family where he was director of fundraising to become president of NCF.

Until 2001, Ron Blue was on the board of the Family Research Council. In 1999 he served as financial director for FRC chief Gary Bauer's ill-fated campaign for the GOP Presidential nomination. He currently serves on Bright's Campus Crusade For Christ board.

In 2003 thirty percent of NCF's total revenues came from five donors who collectively contributed $54.774 million, more than doubling the amount this same quintet provided the year before. Ron Blue serves on the board of the leading donor to NCF-- The Maclellan Foundation, headed by insurance billionaires CNP member Robert H. Maclellan and his cousin Hugh O. Maclellan, Jr.

Tax law and non-profit experts who reviewed NCF documents and their structure for this story were taken aback by this half-billion dollar, multi-layered money machine. Frances Hill described it as "a blending of capitalist entrepreneurship, Christian values and political muscle."

J.J. McNab, a leading charitable and insurance analyst who recently testified before the Senate Finance Committee on donor-advised funds, described NCF as "Enron-like in its complexity."

"Its' complexity is a big red flag," said McNab. "Why so complex? Why so many layers, so many supporting organizations and murky connections?"

After reviewing NCF documents, Frances Hill was stunned by the maze.

"It may be they are trying to hide money trails, " she said. "Such as every time they engage in a transaction there is a fee that benefits a financial adviser or broker. This complexity also is a conflict of interest signal. It's utterly and completely unnecessary. I haven't heard of anything quite like it."

The huge fees paid by NCF to founder and board director Ron Blue's company for investment management astonished Hill. Between 1999 and 2003 RB & Co.was paid at least $2.4 million, including payments of $751,584 in 2000 and $730,481 in 2001. Asked whether such an amount was excessive and raised the specter of "self-dealing", NCF director of marketing Steve Chapman replied that "all of NCF's dealings with our investment managers are treated completely equally, including our dealings with Ronald Blue & Company (RB&Co), and all of NCF's dealings with RB&Co. have been arm's-length transactions. Also, Ron Blue retired from RB&Co. approximately two years ago."

Blue's retirement occurred after the payments in question. During those years RB &Co. principal vice-president Russell Crosson also served as president of the NCF board, which paid him $218, 500 in salary and benefits. Another NCF board member, Anthony Wauterlek, just happened to be the chairman of RB & Co. board of directors. Wauterlek also serves on Dobson's Focus On the Family, a major recipient of NCF funding.

Unraveling NCF's elaborately constructed web of supporting organizations, local community affiliations, marketing partnerships and interlocking directorates is a daunting exercise. As one tax attorney observed, following the money that moves within it would be impossible without subpoena powers.

NCF's five major supporting organizations are National Christian Foundation Support, National Christian Real Property, National Christian Foundation Trust, Hope For the Heart and Provision Foundation. NCF has at least 22 other supporting organizations. They range from small family foundations to large ones housed among their twenty local community foundation affiliates scattered across sixteen states from Massachusetts to California. All of these are driven by NCF's "complex giving" strategy of donor-advised funds and charitable annuities.

The Dallas-based Hope For the Heart is primarily funded by June Hunt, Christian radio personality and sister of Nelson Bunker Hunt, legendary underwriter of the John Birch Society, the CNP, Campus Crusade For Christ and numerous other Christian and far right organizations. In 2003 Hope For The Heart showed $4.8 million in contributions, $4.5 of that came from June Hunt and her Ruth Foundation. The bulk of this was used to pay for airtime, contract labor and other expenses for Hunt's Hope For the Heart radio program. The beauty part for Ms Hunt's enterprise was that as a public charity supporting organization she gained a much greater tax exemption than allowed as a private foundation, including elimination of capital gains taxes.

Also located in Texas is the NCF Trust, which operates out of the Houston offices of Ronald Blue Company. It handles NCF's limited partnerships, sales of corporate holdings and other business interests along with non-publicly trade securities. In 2003 NCF Trust held a little more than $6 million in limited partnerships and nearly $300,00 in non-publicly traded securities.

Real estate is sequestered in NCF Support and NCF Real Property. These include commercial properties, family farms, real estate developments and other properties spread across the country from California to Mississippi. In 2003 NCF Real Property had net assets of $6.8 million with $2.2 million going over to NCF. NCF Support assets were at $16.4 million. Just a little over a million of that went to NCF proper. In that year's IRS filing NCF Support reported a $100,000 real estate transfer made to NCF Trust, but claimed that NCF Trust had no relation to NCF Support even though the two organizations shared the same board members.

This wasn't the only instance of misleading reporting from NCF that year. In Part II, Line 22 Grants & Allocations section of its 990, NCF listed 27 "Security Transfers Out" that totaled just over $6 million. There was no indication where this money went.

When asked about this, NCF replied: "From time to time, NCF issues grants in like kind to 501 c 3 organizations. This particular grant of securities was made to the Christian Stewardship Foundation." The registered name is the Foundation for Christian Stewardship in Irvine, California, one of NCF's local Christian foundation affiliates. Along with this recent revelation, NCF reported $5.9 million going to the FCS that year. It's unclear if those were separate donations or the same donation reported twice.

"How would anybody know where that money went?" said Rick Cohen. "There are no details. They totally failed in their reporting. If you hadn't asked, nobody would know."

Another oddity cropped up in 2002 on NCF's Form 990 Grants list. The foundation reported $3.9 million going to The McCamish Group, the Atlanta based for-profit corporate insurance company headed by Christian Right subsidizer, Henry "Hank" McCamish.

NCF claimed that the "3.9 million grant was actually a gift in like kind to Leading the Way, a 501 c 3 public charity in Atlanta, Georgia. The 990 grant listing inadvertently picked up the name of the donor advised fund." Leading The Way is right-wing evangelist Michael Youssef's global television and radio ministry. McCamish sits on Youssef's board of directors and Youssef holds a chair on the McCamish Foundation board.

Given the millions moving from the McCamish Group's corporate donor advised fund in this single transaction, it appears that McCamish is one of the five big donors who account for 30% of NCF's revenues. It would also explain why Youssef has reaped about $30 million from NCF over the past five years.

Relationships between NCF and McCamish's business interests surfaced a year earlier with a $5.9 million donation from NCF to The Pathway Foundation in Atlanta. Until this windfall, the foundation had been dormant for five years, during which time it was known as the National Foundation for Charitable Giving. The nearly six million dollar infusion from NCF jump started Pathway and accounted for 99% of its total assets. The Pathway Foundation is located in the offices of the Magner Network, a subsidiary of The McCamish Group, at One Buckhead Plaza in Atlanta. Its executive director is Charles Buchholz, vice-president of Magner Network. Buchholz also sits on Pathway's board of directors along with William Weathers of the McCamish Foundation and Daryl Heald of The Maclellan Foundation.

According to its web site, The Magner Network "provides Internet powered sales-enabling services to financial institutions and financial advisers. Magner Network offers a suite of Internet-based products and services that support attractive financial markets which have substantial revenue generating potential, but require focused expertise."

One of those is Directgiving.com, which Magner pitches as "an integrated web-based charitable giving platform, which allows financial advisers to create customized charitable giving programs for their clients in the areas of Donor Advised Funds and Charitable Gift Annuities. These programs provide clients with tax efficient charitable gift programs while allowing advisers to continue to receive revenue from the gifted asset. This market is estimated to exceed $16 billion in annual gift potential."

Directgiving.com's vehicle is the Pathway Foundation where clients can make "an irrevocable, tax-deductible contribution of cash or securities valued at $50,000 or more to The Pathway Foundation for Charitable Giving... Each donor's contributions are used to fund a Charitable Gift Annuity that is then invested in a combination of professionally managed investment funds and annuities from highly rated insurance companies selected by The Pathway Foundation for Charitable Giving."

The Pathway Foundation essentially functions as a subsidiary to the multibillion dollar insurance company The McCamish Group. Pathway's board of directors includes executives from the McCamish company and one from The Maclellan Foundation, headed by the majority shareholders of Unumprovident one of the world's largest insurance providers. With two powerhouse insurance companies dominating the Pathway Foundation, the question on the table is: Which "highly rated insurance companies" will be selected by Pathway for Directgiving's clientele?

When asked about their $5.9 million donation to Pathway and its apparent service as a vehicle for The McCamish Group's for-profit subsidiary, NCF gave an eight-word reply that failed to address the issue:--"The Pathway Foundation is a public grant making charity."

But there appear to be fault lines in NCF's Kingdom building. After reviewing documents, Frances Hill found three of them, any one of which could crater the enterprise.

 "One is their emphasis on contributions of non-liquid assets-- property, stock in a family business-- that they urge." she said. "That's a red flag. There's nothing wrong with non-liquid assets but the valuation on them better be right. The contributors could be getting a tax break beyond their value."

"Then there is the question of related parties, members of the board who are contributors or contractors," she continued. "These related parties can acquire excess benefits... the amount of money paid to Mr. Blue and his company is the example here. Plus you have the NCF Trust run out of his company's Houston office. That kind of relationship is dangerous when there is this kind of benefit. If there is inurnment it could result in loss of the entity's exempt status. This isn't really a good thing, this is not a best practice for a public charity."

"Third, there are the huge amounts going to things like Focus On the Family and other religious right policy groups," Hill noted. "Is any of this money ending up fueling political campaigns? That would cross the line with Rule 170. You can advocate public policy but you can't cross over with the donations fueling elections. With this money machine they must make certain that their donees don't enter partisan electoral campaigns. It may be that this is being worked as an end run around federal laws. When you have big time donors, in this, there are no limits on their contributions."

"It seems to be a business," said Hill from her office in Washington. "Where does the charity stop and the business begin? It's unclear. This is the face of modern charity. There may be nothing wrong going on here. But who knows? With this magnitude and density, can the IRS even figure this out?"

Whether you are seeking investors for the Kingdom or the Dow, target marketing is imperative. At the high end is The Gathering, a 400-member invitation-only club of wealthy Christian donors who conference annually and make several retreats a year to consider where to put their money. It was founded in 1985 in Arlington, Virginia and is now headquartered in Tyler, Texas. NCF president Terry Parker is chairman of their board and headlines their monthly newsletter with an "Ask Terry" column. To qualify for an invitation to this elite group " an individual, family or their foundation should be giving a minimum of $200,000 annually to Christian ministries or have the capacity to do so."

The second-tier marketing extension for NCF is Generous Giving, which targets those evangelicals populating suburbia and exurbia who can afford to jump into a donor-advised fund with a minimum $10,000 gift. Generous Giving was bankrolled and is guided by the Maclellan Foundation--one of the top five donors to NCF. Hugh Maclellan serves as chairman of Generous Giving's board of directors that includes NCF's CEO David Wills and three other members of the Maclellan Foundation board.

Generous Giving holds annual conferences plus regional gatherings--from Kansas City to Hong Kong--throughout the year. These conferences are altar calls for evangelicals to put their assets into the Christian right money machine. They feature Maclellan, Blue, Wills and Christian Right torchbearers like Chuck Colson who pump the gathered givers with exhortations titled "The Church Is at War: The Clash of Civilizations" and "Changing the Culture with Generous Giving."

NCF relentlessly plows deeper in the fields with Ron Blue's Christian Financial Professionals Network; Burkett's Crown Financial Ministries, The Christian Medical and Dental Association and dozens more. In 2003 NCF sank over $1.115 million into these groups, with almost all of that going to Generous Giving.

"The pooling of their resources is incredible, said McNab. "These are very smart people who have put together a very powerful network. This is about multi-layer marketing, kind of like Amway."

"This is what's called an aggressive accommodation charity--in this case accommodating evangelical Christians, especially those on the right." McNab continued. "And it is a huge growing segment. This is about recruiting financial advisers and pulling them in with their clients to NCF. They are marketing and recruiting down the food chain and bringing them into the network. I see this as an attempt to build an empire."

-END-
[A much shorter version of this story appeared in Mother Jones magazine, December 2005 issue.]