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Printed from the Charlotte Observer - www.CharlotteObserver.com
Posted: Sunday, May. 24, 2009

Surging ministry, growing questions

By Ames Alexander and Tim Funk
Published in: Local News

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First of two parts.

INDIAN LAND, S.C. - As Easter approached, the ad ran repeatedly on the Inspiration Network: David Cerullo, clutching a Bible, told viewers they, too, could receive prosperity, physical healing and other blessings God gave the ancient Israelites.

All they had to do, the televangelist said, was send $200 or more.

“Go to your phone,” he said. “Sow your Passover offering and watch God do what he said he would. … Call now.”

Pitches like this have transformed the Charlotte-area cable network into one of the world's fastest-growing Christian broadcasters, beaming into more than 100 countries on five continents. They've also helped turn Cerullo, Inspiration's CEO and on-air host, into a wealthy man.

He brings home more than $1.5 million a year, making him the best-paid leader of any religious charity tracked by watchdog groups. His salary dwarfs those of executives leading far larger religious nonprofits.

David and Barbara Cerullo live in a 12,000-square-foot lakefront home in south Charlotte – complete with an elevator and a 1,100-square-foot garage. Their grown children also receive substantial salaries.

His network, with a budget of nearly $80 million last year, sprang from the remnants of Jim Bakker's PTL Club. Cerullo and his colleagues have raised much of the money by repeating this on-air assertion: God brings financial favor to those who donate.

Cerullo says he's heard from many people who've “reaped a harvest” after contributing.

But some donors are disillusioned. Rebecca Mills, 54, of north Mississippi, gave about $400 two years ago. Money was tight. But it was a time when she was recovering from breast cancer and trying to get closer to God.

The more she read the Bible, the more she wondered why she'd written those checks: “I could just … tell that what they were saying wasn't right.”

Much of the money sent by people like Mills is now funding the City of Light, a 93-acre campus in northern Lancaster County, S.C., where the network's plans include a sophisticated training and broadcast center.

Taxpayers also are helping to pay for it. Eager to bring jobs to a county with 19 percent unemployment, South Carolina offered the network incentives worth up to $26 million to land the campus – a deal that has been questioned by economic development experts.

Cerullo said he works hard for his salary and has turned down recommendations that he be paid more. He said his appeals to donors are based on God's promises in the Bible, and that 80 cents of every dollar donated is spent to spread the Gospel.

“Ours is an organization based on accountability, based on integrity, based on trust,” the 56-year-old minister told the Observer. “We've proven that in the last 18 years over and over again.”

Rise of a broadcast power

The son of a well-known evangelist, David Cerullo didn't grow up wanting to follow his father's path.

As a teenager, he planned to be a doctor. But, at his parents' request, he agreed to try Oral Roberts University, a Christian school in Oklahoma. There, he said, he began to feel God point him in another direction.

“In that still small voice in my spirit,” Cerullo said, “I felt God suggest to me, ‘Look, change your major to business, and I have other plans for you.'”

After graduating with a business degree, he joined his father's ministry and eventually helped run it. He was ordained in 1974 by the Assemblies of God, but said that even today, “I am probably more comfortable in a roomful of CPAs and lawyers and bankers than I am in a roomful of preachers.”

His father, Morris, grew up in a Jewish orphanage in New Jersey and converted to Christianity at age 14. Later, Morris Cerullo staged worldwide crusades in which, his Web site says, “the lame walk, the blind see, the deaf hear.”

The Inspiration Network launched in 1990, when Morris Cerullo paid $7 million to buy the assets of PTL's cable television network out of bankruptcy. David Cerullo became president.

Throughout most of the 1990s, INSP differed from many other religious TV stations: It didn't ask for donations on the air. Instead, it generated revenue by selling advertising and airtime for programs produced by other ministries.

That changed in 1999. David Cerullo decided Inspiration should create its own programs to spread God's word. “We started to put a face on the network,” he said.

That required money, so the network began soliciting donations from the public. Increasingly, it came to rely on “prosperity preachers” – guest evangelists who told viewers that God favored those who donated.

The gifts grew rapidly, from about $200,000 in 1999 to about $40 million last year.

The influx of money has created a powerhouse of religious broadcasting.

The ministry's flagship Inspiration Network carries a variety of programming, from shows featuring controversial evangelists John Hagee and Benny Hinn to Christian hip-hop videos and an adventure show for children. Twice a day, the network airs its homegrown “Inspiration Today!” show, in which Cerullo and other evangelists ask for contributions.

Generous pay

As their networks grew, David Cerullo and his wife built a comfortable life. Their home, in a gated south Charlotte community, is valued at $1.7 million, real estate records show.

Few nonprofit leaders are paid more than Cerullo. In 2007, he received roughly $1.52 million in base pay, along with other compensation totaling about $69,000, according to the ministry's IRS filing.

Guidestar, which monitors nonprofits, compiles a database on thousands of charities – including 13,000 religious organizations that filed IRS returns for 2006, the last year with complete records. None of the faith-based groups paid their leaders more than the Inspiration Network.

Even religious nonprofits with vastly larger budgets pay their presidents substantially less, the Observer found. The Christian Broadcasting Network, founded by Pat Robertson, has a budget roughly four times larger than Inspiration's. Compensation to CBN's president totaled $344,000 in 2007.

Concern about Cerullo's salary prompted Wall Watchers, which monitors religious charities, to issue a “donor alert” to caution people about giving to the Inspiration Networks.

“That amount of salary is outrageous and out of sight,” said Rodney Pitzer, research director for the Matthews-based group.

Cerullo declined to discuss Wall Watchers' warning.

His family is also on the payroll. His wife, Barbara, received about $198,000 in total compensation in 2007, according to Inspiration's IRS return. Son Ben, daughter Becky and their spouses, who also work there, received a total of nearly $400,000, according to a network spokesman.

Barbara heads Inspiration's women's ministry. Ben, ordained by his grandfather's ministry, oversees youth efforts. Becky is starting a network aimed at 18- to 34-year-olds. Becky and Barbara are not ordained ministers.

IRS rules prohibit nonprofits from paying “unreasonable compensation” to officials. But the agency examines the returns of fewer than 8,000 of the 1.8 million tax-exempt organizations each year.

A paid independent consulting firm recommends the salaries of Inspiration's executives, including Cerullo, according to spokesman John Roos. The board of directors makes the final decision.

Cerullo said he and his wife, both of whom sit on the board, recuse themselves from discussions about his salary and abstain from the votes.

For a while, though, that arrangement apparently left just one board member to decide his salary. From late 2005 to 2008, the board consisted of only three members, including Cerullo and his wife.

The board expanded to four members last year and to six members this year, officials say. Today, the board is chaired by Cerullo and includes a fundraising expert and a neighbor who helps run a communications firm.

Cerullo says he earns his pay, typically working 60 to 80 hours a week. He oversees four cable networks, a ministry and a television production company, all while playing a key role in developing the City of Light complex, he said.

The board received a recommendation that he be paid “substantially” more, Cerullo said, but he turned down the additional money because “I am blessed beyond my imagination … I don't need it. I don't want it. I won't take it.”

He said he knows of other religious nonprofits that pay their CEOs more, but he wouldn't identify them. He also declined to share a salary survey used to set his pay. But he said that study looked at compensation for cable network CEOs, church pastors and ministry leaders.

Cerullo said the “average preacher” probably would not have the business know-how to do what he does, and that his salary is still below what his peers earn at cable networks such as Discovery and CNN.

Cerullo's staff is also well-paid. More than 25 of the network's 330 employees collected more than $100,000 in 2007, the IRS filing shows.

Roos, Inspiration's senior vice president for marketing, said the network examines national salary averages before setting any employee's pay.

“This is a high-tech, very specialized (operation),” he said. “… That comes with a price tag.”

Still, two larger religious broadcasters, Trinity Broadcasting Network and CBN, had fewer employees earning six-figure salaries, records show.

Inspiration has chosen not to join the 1,385-member Evangelical Council for Financial Accountability (ECFA), which sets standards for governance and fundraising by Christian charities. “I don't believe in organizations that set themselves up to create burden with very little benefit,” Cerullo said.

U.S. Sen. Charles Grassley, R-Iowa, who is investigating the finances of six other televangelists, questioned why any religious nonprofit would decline to join ECFA, which he likens to a Good Housekeeping seal of approval.

Grassley would not comment specifically about the Inspiration Network, but told the Observer that leaders of religious nonprofits should be careful not to use viewers' donations to adopt “filthy rich” lifestyles. Grassley wants to know whether some nonprofits are violating the spending rules that allow them preferential tax treatment.

“I saw (PTL's) Jim Bakker treating his organization like a personal ATM,” said Grassley, the ranking Republican on the Senate Finance Committee, which helps shape the nation's tax laws. “Any religious organization ought to get away from that impression.”

‘Debt cancellation!'

Emotional on-air pitches generate much of the money used to pay network salaries. In March, Morris Cerullo appeared on Inspiration's “camp meeting” with a message to fire up prospective donors.

“Is anybody ready for the greatest financial breakthrough you've ever experienced in your life?” he asked.

The elder Cerullo, a Pentecostal minister, at times appeared to speak in tongues. His gravelly voice periodically rising to a shout, he urged members of the audience to fill envelopes with $900 donations.

“When you sow for your financial anointing, the windows of heaven are going to open for you,” he said. “ … In the next nine months, you are going to experience more financial blessings than you've ever experienced in your life! One hundred-fold! Debt cancellation!”

Soon, these words appeared on the screen: “Call now with your $900 offering and receive God's debt cancellation.”

Until about four years ago, the elder Cerullo had served as an unpaid member of the network's board.

Like other prosperity preachers who raise money for INSP, Morris Cerullo has been criticized for his fundraising methods. In 2005, he was indicted in California for tax evasion, but the charges were later thrown out.

David Cerullo says he believes in his father – and that good things will happen to donors. He said he has gotten many letters and e-mails from contributors who “received what I would call a harvest.” He declined to name them.

“I don't back off … the concept that seeds produce harvest,” he said. “It's naturally accurate. It's biblically accurate. It's spiritually accurate…. The Bible says give, and then what? Then it will be given unto you.”

Laura Gamble is among those who believe her seeds have yielded fruit. The 69-year-old Easley, S.C., resident said she's a regular viewer and contributor. She believes her donations have had something to do with improvements in her health, she said.

“I just got out of the hospital, and I'm having a good recovery,” she said. “It's God looking out for me.”

Donors fuel rapid growth

Texas televangelist Mike Murdock, Morris Cerullo and the other ministers raising much of the network's money adhere to a much-criticized brand of evangelism called prosperity gospel, which holds that God rewards them and their faithful donors with financial prosperity. With the Inspiration Networks and other broadcasters spreading their messages around the globe, those prosperity preachers have in recent years watched their audiences swell.

The financially desperate are among those most likely to be drawn to such pitches, experts say.

Janet Gibbens, 60, of Northern California, was holding down odd jobs and barely making ends meet about five years ago when she saw Morris Cerullo on the Inspiration Network. She'd been reading Cerullo's books and listening to his preaching for years. When he called himself a prophet of the Lord, she believed him.

On the air, the elder Cerullo urged viewers to donate to the network – and then prepare to receive “financial blessings that would stagger the imagination,” she recalled.

“I wanted to have something more than this poverty,” she said. “If I coughed up the $200 … He was God's emissary, you know. If you did that in obedience, the sky was the limit.”

So she sent about $200 – all that remained in her bank account, she said.

But her financial situation never improved. About three years ago, she began reading information that caused her to doubt the claims of the people she had trusted. Her faith in those ministers evaporated and was replaced by rage. She now wonders why she ever believed Cerullo's claims. “It's almost like a brainwashing, that they can convince you to give all your money,” she said.

In recent years, the debate over the prosperity gospel has been the subject of cover stories in national magazines, theological conferences and Grassley's Senate inquiry. Critics say preachers who espouse it – from PTL's Jim and Tammy Bakker in the 1980s to Missouri-based Joyce Meyer today – distort the Bible to justify their luxurious lifestyles.

“If that was Christ's message, then I want to know why he wound up on the cross. That's not prospering,” said the Rev. Mike McDonald, pastor at Broad Street United Methodist Church in Mooresville. “He warned against seeking material gain – often quite explicitly.”

The Rev. Michael Horton, a California theology professor who edited “Agony of Deceit,” a book that examines the claims of fundraising televangelists, said such appeals lead to “a kind of Ponzi scheme.”

“Certainly it works out very well for whoever's at the top,” he said.

One former Inspiration employee, who asked not to be named, said many of the network's donors were elderly people of limited means who hoped that giving to the network would help them “turn their own situations around.”

She said she valued the network's mission of saving souls, but was troubled by the growing number of on-air promises that God would bring good things to donors.

“That teaches people that the things of God are for sale,” she said. “I just have a problem with that. That stuff's not for sale.”

Staff researcher Maria David contributed.

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