Can A Television Network Be A Church? The IRS Says Yes NPR examines previously undisclosed financial records from Daystar Television. Those files raise issues as basic as the definition of "church" and as grand as the role of government in religion.
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Can A Television Network Be A Church? The IRS Says Yes

Listen: Part 1

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  • <iframe src="" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
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From NPR News, this is ALL THINGS CONSIDERED. I'm Robert Siegel in Washington.


And in Dallas, I'm Melissa Block broadcasting all week from member station KERA.

Today, we have the first of two special reports from NPR's John Burnett. He's been investigating the finances of televangelists.

And, John, one of the things you found out is that for the public, it's pretty much impossible to find out how most of these mega-ministries make their money and spend their money.

JOHN BURNETT, BYLINE: That's right, Melissa. Today's most are bigger and richer than ever, but for most of them there is no public accountability. They don't have to tell anything to anybody about how they spend tens of millions of dollars in tax-deductible donations. So we unearthed records right here in Texas that gave us a deep, unprecedented look inside one TV ministry. And what they revealed is eye-opening.

BLOCK: And we'll hear about what you found in those records in just a few minutes. But your investigation also took you beyond the finances of this one religious broadcaster.

BURNETT: It did. We found that the IRS and Congress aren't just going easy on televangelists, they're deliberately looking the other way. And it's not only a question of oversight, it raises issues as simple as what is a church, and as grand as what should the role of government be in religion?

Let's begin with a look at a Christian TV network right there in Dallas-Fort Worth.


BURNETT: This is the look and sound of Christian television today

UNIDENTIFIED MAN #1: And now your hosts, Marcus and Joni Lamb...


BURNETT: A tight band, a stylish stage set, and the 1-800 number at the bottom of the screen soliciting donations. This is Daystar Television. It calls itself the fastest growing Christian TV network in the world. In 2011, Daystar had assets of nearly a quarter of a billion dollars according to court records. The founder and CEO is a dapper, often-tearful Pentecostal minister from Georgia, named Marcus Lamb. He's a spirited preacher and a tireless fundraiser.

MARCUS LAMB: We need you right now to help answer these phones, 'cause heaven is just opening up. Heaven is just opening up. Thank you, Lord. Thank you, Lord. Thank you, Lord...

BURNETT: The network produces its own lineup of popular Christian talk shows and features well-known evangelists such as T.D. Jakes.

T.D. JAKES: I'm going to put away my doubt. I'm going to put away my fear. I'm going to put away my depression....

BURNETT: Daystar is the largest religious TV network in America that's classified as a church with the IRS. The distinction is important because churches are the least transparent of all nonprofits. They're not only tax-exempt but they enjoy special protection from IRS audits, and they don't reveal details of their finances.

I wanted to attend a service. So I went to Daystar's broadcast headquarters in the suburban city of Bedford, between Dallas and Fort Worth. It sits on a green lawn next to a cluster of satellite dishes facing a state highway. I approached the smiling receptionist.

Is there a church service here at Daystar?

UNIDENTIFIED WOMAN: Well, we don't really have a church service. We're - we have a show.

BURNETT: You have a show and not really a church service.


BURNETT: Marcus Lamb declined numerous requests to speak to NPR for this report. Daystar did respond to questions in a four-page letter. In that letter, they pointed out that the IRS has recognized Daystar as a church from the network's inception. The letter also says Daystar regularly conducts marriages, funerals, baptisms and communion just like any other church, yet former employees interviewed by NPR said they could not recall a single instance of this happening.

BILL HORNBACK: It's not a church. I mean they're a television broadcasting company. That's what they are.

BURNETT: That's former IT manager Bill Hornback, sitting outside a Starbucks. I also put the question to Lisa Anderson, former executive assistant to Marcus and Joni Lamb.

Is Daystar a church?

LISA ANDERSON: The way I know a church, I would lean more on the negative.

BURNETT: Why? Why do you say that?

ANDERSON: When the lights are on and the cameras are on, we're a ministry. When those lights are off, cameras are off, it doesn't feel like a ministry.

BURNETT: What does it feel like?

ANDERSON: A business making money.

BURNETT: The IRS has its own definition of a church. It's called the 14-point test. Among the criteria, regular services, Sunday school, ordained ministers and a regular congregation. But it rarely enforces the 14-point test anymore and, in fact, has never challenged Daystar's claim to be a church. In a deposition filed with court records, Marcus Lamb defended Daystar's standing as a church, saying the network's viewers are our congregation.

I asked Washington tax lawyer Marcus Owens, former director of the exempt organizations section at the IRS: Can a TV audience be a church congregation? Owens referred to a case when he was at the service in which that same issue came up.

MARCUS OWENS: That argument did not fly because of the absence of a congregation, a group in the room with the religious leader when the services occurred.

BURNETT: One advantage of being a church is not having to file an IRS Form 990 which is required of other nonprofits, including NPR. 990s tell how the money is made, how it's spent, and the salaries of executive employees. In Daystar's case, without this public information, there's no way for donors to be certain how their money is being used. And they give an average of $35 million a year to the network. This figure comes from six years of audited financial statements included as exhibits in connection with a 2011 employee lawsuit that was dismissed.

NPR inspected a banker's box full of internal Daystar documents the network tried to keep out of the public record, but which a state judge unsealed. We found records of charitable giving at odds with what the network claims, and generous donations to and business dealings with friends. According to the records, Daystar's primary revenue comes from selling airtime to other religious programmers. Its secondary income is donations through pitches like this.

UNIDENTIFIED MAN #2: If that's you today, if you need a breath-through, if you need a blessing, quickly move to the phone. Quickly move to the phone. Dial that number or go to and click on giving or pledging.

BURNETT: Daystar has built a public image as a generous giver to charitable causes. Indeed, the network has contributed millions of dollars to a trauma center and a home for Holocaust survivors in Israel, a hospital in Calcutta, and ministries that support women in Moldova and children in Uganda. Marcus Lamb trumpeted those donations in a 2009 sermon in Australia.

LAMB: But yet in the last five years, Daystar has written checks of donations to others, to ministries, to churches, to missions, to hurricane relief, to tsunami relief, to hospitals, et cetera, to the tune of $30 million cash.


BURNETT: NPR analyzed six years of Daystar balance sheets. They show the network took in $208 million in tax-deductible contributions and gave away $9.7 million in direct grants, not $30 million. It works out to charitable giving of about five percent of donor revenue.

DANIEL BOROCHOFF: My concern is the disconnect between what Daystar asks that the money be used for and how they actually use it.

BURNETT: Daniel Borochoff is president of, a nonprofit charity evaluator based in Chicago. NPR sent him Daystar documents and asked him to assess the network's charitable giving.

BOROCHOFF: Daystar needs to tell people that only about five percent of their contributions are going towards hospitals, churches, needy individuals.

BURNETT: In its letter, Daystar explains the discrepancy by saying most of the viewer contributions actually go to pay for the costs of foreign satellite transmissions, which the network considers its international mission work.

We wanted to see where the actual cash grants go, who receives Daystar charity. We found that while most of them are individual churches and ministries across America, some of the donations have family connections. According to court records, Daystar gave a total of more than $800,000 to Oral Roberts University, mostly during years when the three Lamb children were enrolled there, to the Christian high school they attended, to the Lamb family church, Gateway Church, to the Christian marriage counselors that Marcus and Joni used, and to the Georgia nursing home where Marcus's father lived before he died.

Moreover, evangelists who bought airtime on Daystar or appeared as guests on the network received more than $500,000. Ministry spending included half a million dollars in sponsorship and expenses for a Christian NASCAR driver, and a $2.3 million loan to Lamb's former special assistant and golfing buddy, to start a church, which defaulted on the loan. There's more donation information on

None of this is illegal. But it raises eyebrows, especially when Daystar publicly asks for money for hospitals and Holocaust survivors. Again, CharityWatch's Daniel Borochoff.

BOROCHOFF: I mean, it would be a lot easier to sort all of this out if Daystar filed a public disclosure document with the IRS like the secular charities. If you want to make a contribution to your father's care facility or your kids' university and that's out there and open for anybody to ask about, it brings a lot of accountability that wouldn't be there otherwise.

BURNETT: Daystar's response: it has always supported like-minded ministries spreading the Gospel and donors are aware and appreciate our stewardship on their behalf. I was curious if Daystar employees know where the money goes. Joyce Wade worked in the prayer department as one of her jobs during her eight years at Daystar before she quit. I showed her the contributions found in the court documents. What's your reaction to that?

JOYCE WADE: Well, I could use the term flabbergasted. I'm almost floored by the amounts I saw, and still wondering why. Why is it that those organizations or whatever can get this much money?

BURNETT: By all accounts, Marcus Lamb is a brilliant businessman who has singlehandedly built Daystar into a Christian media powerhouse. Though Daystar is a quarter-billion-dollar enterprise, former employees say it's run like a family business. Court records from 2011 show the board of directors was composed entirely of Lamb family members and their lawyer - a structure the Evangelical Council for Financial Accountability considers bad governance. Daystar counters that its books are audited by an outside accounting firm every year, and its financials are available to donors.

We were curious how common is this lack of transparency among big TV ministries? At NPR's request, the Trinity Foundation - a watchdog group in Dallas that monitors televangelists - compiled an unofficial list of the nation's 30 largest religious broadcasters. It turns out 22 of the top 30 are designated as churches, meaning they don't have to report anything to anybody, and of those classified as churches, a third of them, including Daystar, hold no regular services. And what of the handful of leading evangelists, like Billy Graham, who choose not to call themselves churches, which means they do open their books to the public?

MARK DEMOSS: I think the simplest reason is the Billy Graham Evangelistic Association is not a church. It's what you might call a para-church.

BURNETT: Spokesman Mark DeMoss says Billy Graham, now 95, was an early proponent of rigorous financial openness in a field in which other ministers often preferred to keep their books private.

DEMOSS: For the Graham organization, the transparency has not been a challenge. Other organizations have figured out that they could classify themselves as a church and avoid filing the form and therefore avoid disclosing some of this financial data.

BURNETT: NPR tried to ask the IRS why any TV evangelist can seemingly call his or her ministry a church and enjoy the cloak of privacy that comes with it, but IRS officials declined repeated requests to go on the record. The truth is Marcus Lamb doesn't have to worry about the agency asking if Daystar is really a church, or looking at its books, says Ole Anthony, president of the Trinity Foundation.

OLE ANTHONY: I'm not concerned about churches that are really churches. But because the IRS is so busy with other things, they've never really looked into whether or not Daystar's a church or not.

BURNETT: And they're not likely to. As we'll hear in the second report tomorrow, the IRS prefers to leave churches alone. John Burnett, NPR News.



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