Saturday, September 20, 1997

Separate Chuch and State? But not at the bottom line

By MICHAEL O'CONNOR Abilene Reporter-News

Church treasurers take note. The next time a prospect decides to join the church, you might want to run a credit check and ask for bank records.

This may sound ludicrous, but after a district judge ruled that Cedar Bayou Baptist Church has to turn over more than $20,000 in offerings given by a member who went bankrupt, the actions might be prudent.

One of Leland Collin's creditors decided that the money had been given to the church to keep it out of their hands, and the firm sued to retrieve it. The implications of the judge's ruling are disturbing.

I can certainly understand the creditor's frustration. Collins didn't buy something tangible the creditor can seize and sell at auction to recoup some of its losses. And Collins may well have given the money to the church rather than surrender it to his creditors. But unless the church took the money knowing the reasons behind the contribution, then surely some other accommodation could have been made that would have provided an equitable solution to the problem.

Perhaps Cedar Bayou is an exception, but the money they received likely was spent for the needs of the church and giving it back will place a substantial burden on the congregation. Even in large congregations with huge operating budgets, 20 grand is nothing to sneeze at.

And what will this mean for other churches and nonprofit organizations? Were I to go bankrupt, will my creditors then be able to go to my church and demand it turn over the money I donated? Will they be allowed to sue the United Way for the money I give through the company? (To be honest, the United Way would have little to fear from such a suit. One of the directors could probably refund the money from whatever he had in his wallet.)

If Collins made the donations merely to shield the money from his creditors, he made a bad choice. And I assume the judge had some evidence that this was the case. If Collins had that much money to give to the church, he should have used it to pay his debts - an obligation that is clearly delineated in the scriptures.

But the court's action puts churches and other nonprofits in the position of having to be suspicious of every large donation that comes their way. How are they to know if the gift is motivated from philanthropy or chicanery? Will they need to retain such gifts for a significant period of time and watch the bankruptcy filings in the paper? And how long a period would that be?

I suspect the ruling will be appealed, and I hope it will be overturned. Otherwise the possibility of a chilling effect on giving to nonprofits looms rather large.

Michael O'Connor is Online Editor for the Abilene Reporter-News and is an ordained United Methodist minister. He can be reached at Box 30, Abilene, TX 79604 or online at religion@abinews.com