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SGM Uses “Strategic Global Projects” to Fraudulently Raise Money

The financial demise of Sovereign Grace Ministries is obvious to anyone who has studied the audited financial statements from 2012 and 2013 and the budget for 2014.  Here are some lowlights. 

  • Contributions dropped from 4.8 million in 2011 to 3.2 million in 2012 to 1.8 million in 2013.  That’s a 63% decrease over two years. 
  • Total assets went from 6.2 million in 2011 to 4.9 million in 2012 to 3.4 million in 2013.  That’s a 45% decrease over two years. 
  • 2.0 million dollars of the remaining assets are locked up in the Sovereign Grace Ministries 17,125 square foot facility back in Gaithersburg, MD that is in the Covenant Life Church building! 
  • Ironically, Sovereign Grace Ministries paid $115,034 in 2013 for a leased facility in Louisville, KY.  Next year the rent goes up to $158,382. 
  • Product sales (books, music, etc.) dropped from $689,000 in 2011 to $467,000 in 2012 to $367,000 in 2013.  That is a 47% decrease over two years. 
  • The 2014 budget projects a deficit of $329,400. 

The vast majority of revenue comes from two sources.  Mandated giving from the SGM churches and voluntary contributions from individuals.  The 2014 budget estimates 1.2 million in giving from the churches.  That is dismal and it will decrease as more churches leave or become poorer due to declining memberships.  Thousands of people have left churches that remained in SGM. 

Furthermore, most of the wealthy and numerical large churches have left Sovereign Grace Ministries since 2012.  That’s one reason contributions are down 63% over two years.  For example, Covenant Life Church contributed $854,228 to SGM in 2011.  C.J. Mahaney’s unwillingness to reconcile cost SGM dearly.  Covenant Life Church was a huge asset in more ways than one.       

Of course, these are just numbers.  They don’t tell the whole story.  What they represent are a gargantuan loss of trust in the leadership of Sovereign Grace Ministries.  And behind that loss of trust is incalculable pain and disillusionment that has contributed to shipwrecking of many people’s faith.    

And yet everything is good to great in Sovereign Grace Ministries according to SGM management.  The accounting firm Aronson LLC has audited SGM for as long as I can remember.  I worked with them in the past.  Here’s what they said in the last paragraph in “Notes to Financial Statements” contained in the 2013 audit.  

SGM has been in a process of evaluation and reorganization, which has left the association smaller, but SGM management believes strengthened and well positioned for the future.  (Dec 20, 2013)

You will never hear any “bad news” out of Sovereign Grace Ministries.  Only promises of peace and prosperity like Old Testament false prophets.

Last year, SGM did not attempt to raise funds from individuals so great the loss of trust.  This year they are back at it.  In order to do this they produced a fund raising brochure called “Hope Abounding.” 

The brochure highlights “Strategic Global Projects” in Cuba, the Philippines, South Korea, Zambia and Mexico.  Far more time and attention is given to these five projects as a motivation for giving than anything else in the brochure!  It’s a fundraising gimmick. 

Mark Prater, Tommy Hill, et al. know they can raise far more money by drawing attention to World Missions than Jeff Purswell teaching nine students in the Pastors College or Bob Kauflin making another album.  But this is a fraudulent way to raise money.

What Prater and Hill don’t tell prospective donors is the budget for World Missions has been cut from $973,285 in 2012 to $364,553 in 2013 to $173,100 in 2014.  That’s a reduction of $800,185 over two years.  In other words, SGM is investing next to nothing in World Missions this budget year and yet World Missions is hyped in the fund raising brochure.  It’s a scam. 

For example, here’s what the “Hope Abounding” brochure says about Cuba and yet the brothers and sisters in Cuba will receive very little money and assistance.  They are being taken advantage of by SGM.

Sovereign Grace has been working with pastors in Cuba since 2001.  Over the years, we have formed a key partnership with Iglesia Pentecostal Gracia Soberana, a union of churches led by Manolito Fonseca.  In partnership with Iglesia Pentecostal Gracia Soberana, we have been able to help train pastors throughout the entire island.  This training includes teaching pastors how to preach expository sermons, build churches, reach out to communities and care for other pastors.  We have also helped them to purchase a tract of land which includes a working farm and hopefully a future Bible school.  Giving to this project will enable us to continue sending theological training teams and to invest in the working farm that helps supply funds and food for our Christian brothers and sisters in Cuba. 

People should also know that Palm Vista Community Church in Miami Lakes, Florida decided to leave SGM last Sunday.   Al Pino and Jim Britt are two of the pastors there.  Al led our involvement in Cuba from the beginning in 2001.  Jim has been extensively involved also. 

The churches and pastors in Cuba are primarily joined to these men, not to SGM as an organization.  The partnership between Palm Visa and Sovereign Grace has ended.  I imagine the same is true for Iglesia Pentecostal Gracia Soberana and Sovereign Grace.  

Given this development, Mark Prater and the Executive Committee have a responsibility to inform everyone in SGM since Cuba is highlighted in the fund raising brochure.   I doubt that will happen.  As a result, people with continue giving money to SGM with outreach to Cuba in mind never knowing they are no longer affiliated with SGM.   

The World Missions budget of 178k was approved by the Executive Committee and affirmed by the national Council of Elders.  The Council of Elders is comprised of one representative from each church – typically the senior pastor.  All of these men used the misleading promotional piece in order to raise funds for the 3.5 million budget.  That is unscrupulous.

If Mark Prater, the Executive Committee, the national Council of Elders, and the Leadership Team were honest they would have made it clear in “Hope Abounding” that SGM is hardly giving any money to World Missions in 2014!  Therefore, don’t give to SGM with that misconception in mind!  Instead, give to SGM in order to the cover the estimated budget deficit of $308,000 for our practically defunct Pastors College! 

One last point.  It is a marketing ploy to refer to these international involvements as “Strategic Global Projects.”  If they were strategic global projects, Sovereign Grace Ministries would be investing strategic global money! 

Instead, Cuba, the Philippines, South Korea, Zambia and Mexico are being used to raise “global money” to fund SGM in the United States.  These five nations will receive next to nothing in aid or assistance.

SGM is desperate for cash but this is a deplorable way to raise it!


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