[NPO] Christian Brotherhood Newsletter Ministry

[Dan Prives]

I have been astounded by the recent news about the Christian
Brotherhood Newsletter Ministry. Last month a jury returned a
$14.7 million verdict of misappropriation of funds against
ministry founder Rev. Bruce Hawthorne and some family members.

What astounds me about this case is that:

-- there is nothing illegal about the business model,

-- it's not subject to insurance regulation and

-- it qualifies as a charity.

Subscribers to the newsletter pay a fee, which is used by pay
subscriber medical bills. But it's a "newsletter subscription,"
not insurance. The founder took an "administrative fee" of 1/12
of the subscription price. But eventually $4 million a month
was coming in, and the founder was creating for-profit spin off
businesses and putting his family on the payroll.

It started in the early 1980s, but problems didn't become
apparent until the late 1990s. It took from 1997 to 2002 to put
the ministry into receivership and until now to bring the case
to trial.

"Investigations alleging fraud began in the late 1990s, but
neither federal, state nor local agencies found anything on
which to charge Hawthorn or his family. The charity did pay the
IRS $750,000 to settle a claim, but no one involved in the
charities has personally been accused of tax evasion." [Akron
Beacon Journal article, link below]

My question continues to be how can this go on for so long,
involving such large amounts of money, with so little recourse?
Aren't there supposed to be laws regulating both charities and
insurance to protect the public from exactly this kind of
abuse? And why does a $2 million misappropriation at United Way
get so much attention, while this $14 million misappropiation
passes without comment?

By the way, it appears that Christian Brotherhood Newsletter
Ministry continues to operate. [See web site links below.]

[Just a side note: here's another instance where long tenure of
leadership is associated with a charity gone wrong.]

Regards,
Dan Prives
"Infrastructure consulting for
nonprofits $5 million to $50 million"
Baltimore, Maryland

Christian Brotherhood Newsletter Ministry

Home page:
http://www.christianbrotherhood.org/index2.html

How does the Christian Brotherhood Newsletter Ministry work?
http://www.christianbrotherhood.org/h/how.html

News articles:

Health Ministry Fraud Alleged
Ohio seeks $16 million in damages against Christian Brotherhood Newsletter.
By Chuck Fager
Christianity Today
Posted 3/9/01
Google cache:
http://216.239.39.104/search?q=cache:s_MwBeZusMYJ:www.christianitytoday.com/ct/2001/005/8.23.html

Minister testifies in his defense
Founder of Barberton Rescue Mission faces cross-exam next week
By Phil Trexler
Akron Beacon Journal staff writer
Posted on Sat, May. 15, 2004
http://www.ohio.com/mld/ohio/2004/05/15/news/local/8673718.htm
[Very interesting self-justification!]

Minister, family liable in suit
Jury assigns more than $14 million in damages for misuse of charity donations
By Phil Trexler
Akron Beacon Journal staff writer
Posted on Wed, May. 26, 2004
http://www.ohio.com/mld/beaconjournal/news/local/8761925.htm

[MrQuietGuy]

Not Insurance???

Would you pay $135 per month for an 8-page newsletter when most of the space
is dedicated to claiming they are not insurance?
When there are different payment amounts depending on how much "help" you
can get, yet all amounts get the same newsletter?

Tom M.

"Dan Prives" <deep...@avagara.com> wrote in message
news:mailman.1.1086457...@rain.org...