Focus on the Family Withstands Liberal Group’s Attack

October 2007

Dear Friends:

If you’re old enough to earn money, you’ve probably filled out a few tax forms in your day. And you’ve likely resonated with the common wisdom that the only certainties in life are death and taxes, or that "The Lord giveth and the IRS taketh away." In fact, the longer you’ve been paying taxes, the more likely you are to crack a smile at one of the millions of tax jokes that have emerged over the years. Here are a few of my favorites:

“Worried about an IRS audit? Avoid what’s called a ‘red flag.’ That’s something the IRS always looks for. For example, say you have some money left in your bank account after paying taxes. That’s a red flag.”—Jay Leno

“The Internal Revenue Code is about 10 times the size of the Bible—and unlike the Bible, contains no good news.”—Don Rickles

“We contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.”—Sir Winston Churchill

Focus on the Family, like all other nonprofit 501(c)(3) organizations, has always maintained a unique relationship with the IRS. The laws governing nonprofit organizations can be complex, and I have no desire to recount them here. You’re probably aware that one of the primary rules governing our operations is that we are forbidden from endorsing political candidates for public office or political parties through Focus on the Family. Throughout our history, we have complied with these regulations. We believe in the rule of law and in the importance of following, to the letter, every aspect of it, whether it is the tax code or workplace regulations as outlined by the Occupational Safety and Health Administration (OSHA). We are called by Scripture to do that.

However, there is a vocal contingent on the political Left that has, for many years, tried to argue that in speaking out on the great moral issues of our day, particularly abortion and homosexuality, Focus on the Family and other religious organizations are somehow engaging in illegal activity. This issue came to a head in late 2005 when two leftist groups, Citizens for Responsibility and Ethics in Washington (CREW) and Americans United for the Separation of Church and State, falsely accused Focus, and me in particular, of electioneering by endorsing candidates for political office.

Specifically, CREW sent a 99-page document to the Commissioner of the IRS demanding “an immediate Internal Revenue Service investigation into multiple activities on the part of Focus on the Family, a nonprofit corporation exempt from taxation pursuant to Internal Revenue Service code, 501(c)(3), which require revocation of its tax-exempt status and the imposition of appropriate taxes and penalties, along with such additional proceedings as the IRS may deem appropriate. As set forth more fully below, Focus on the Family has engaged in prohibited electioneering by openly endorsing candidates for public office . . . .”1 That’s quite an accusation!

CREW’s document further asked the IRS to “conduct a full-scale investigation to determine whether there are other instances where Focus on the Family and James Dobson, in his role as chairman of the organization, engaged in prohibited electioneering. We further request that based on the known instances where Focus on the Family has engaged in prohibited electioneering, the IRS revoke the organization’s tax-exempt status, impose all applicable fines and penalties and pursue all other available civil and criminal remedies against those involved . . .”2

These charges would have been laughable if not for their sweeping implications. In its 99-page treatise, CREW repeatedly accused Focus on the Family of criminal activity and demanded that the IRS shut us down. Not to be outdone, the Rev. Barry Lynn of Americans United for the Separation of Church and State issued a similarly dire pronouncement. Rev. Lynn argued that Focus on the Family’s efforts to keep voters apprised of the critical moral issues facing the nation in the 2004 election represented “a blatant effort by Dobson to build a partisan political machine based in churches . . . He has made it abundantly clear that electing Republicans is an integral part of his agenda and he doesn’t mind risking the tax-exemption of churches in the process.”3

Like the CREW document, Rev. Lynn’s statement was full of distortions and outright lies concerning Focus on the Family’s objectives and motivations. Never in more than 30 years of ministry have I or anyone here at the ministry stated or even implied that it is our desire to get Republicans elected to office! I have, on occasion, endorsed candidates in my capacity as a private citizen.4 Time and again, we have made it clear that our concern is not so much the political process but moral issues such as abortion and homosexuality that are, for better or worse, being played out in the arena of public policy. That is a critical distinction that Rev. Lynn and his cronies consistently fail to grasp.

But there is an even more sinister agenda here. As much as organizations like CREW and Americans United for the Separation of Church and State would like to bring Focus on the Family down, the aforementioned statements were designed to accomplish an even more diabolical objective: the silencing of all churches from speaking out on the critical issues of our day. Barry Lynn’s statement, in particular, explicitly states that churches that engage in voter-education initiatives (again, a perfectly legal, non-partisan activity) risk losing their tax-exempt status. This assertion is patently false, and Rev. Lynn should know it. His statement is simply designed to bully and intimidate unsuspecting churches into silence.

But what of the IRS? Needless to say, allegations of the sort put forth by CREW are taken very seriously. In response to the complaint, the IRS engaged in an inquiry of Focus on the Family. We cooperated fully with the investigation, of course, and members of our staff spent literally hundreds of hours responding to IRS questions and requests for documents, e-mails, magazine articles, radio transcripts, and so on. The IRS left no stone unturned in its quest to discover whether or not CREW’s allegations had any merit.

I’m pleased to report that the IRS answered that question with a resounding “no.” Let me cut to the chase: The IRS’s year-long review revealed that Focus on the Family was guilty of absolutely none of the trumped-up charges brought forth by CREW.

The IRS’s final report stated:

“Our examination revealed that Dr. Dobson’s reported remarks did not occur in publications of Focus on the Family, did not occur at functions of Focus on the Family, and did not involve Dr. Dobson suggesting that he was speaking as a representative of Focus on the Family. As such, we are closing our examination without any change to our recognition of Focus on the Family as an organization described in section 501(c)(3).”

An accompanying letter from the Department of the Treasury stated:

“We are pleased to inform you that our examination for the above period(s) disclosed that your organization continues to qualify for exemption from Federal income tax. Accordingly, we have accepted your return(s) as filed.”

Jim Bopp, an Indiana attorney who specializes in tax law and serves the ministry on a consultancy basis, summed up the findings best when he said:

“This is a huge victory for Dr. Dobson and Focus on the Family. No ministry is more careful than this one in complying with the complex Federal and state laws regulating non-profit organizations. The fact that the IRS did such a thorough review, and found no violations, is a credit to Dr. Dobson, the Focus on the Family compliance team, and their desire to be a law-abiding organization.”

In sharing this news with you, it is not my intention to gloat or brag. On the contrary, we are humbled and gratified by the IRS’s findings. However, I do feel it is important that you hear the truth straight from the “horse’s mouth.” When the IRS investigation was launched, newspapers and media outlets across the country trumpeted the news that Focus was being audited. But now that the audit is complete and we have been cleared of any wrongdoing, the media has suddenly lost interest. That is to be expected, I suppose. Most people would rather read about scandal and turmoil. The truth can be boring.

If nothing else, I want to assure you that Focus on the Family remains as committed as ever to operating with integrity and professionalism at every level of the organization. This impacts not only our compliance with tax guidelines but also our fundraising principles, employment policies, business practices, and so on. We have no interest in bending the rules, bucking the system, or seeing how much we can get away with before we get caught. Every day, this organization fights to promote biblical values, and we don’t want to do anything that would embarrass or reflect negatively on the cause of Christ. We’re fallible, of course, and we will make mistakes at times. But we will never waver in our determination to walk the straight-and-narrow and to follow the principle set forth in 1 Peter 2:16-17(NIV): “Live as free men, but do not use your freedom as a cover-up for evil; live as servants of God. Show proper respect to everyone: Love the brotherhood of believers, fear God, honor the king.”

In closing, I’d like to share the ministry’s fundraising guidelines with you. It’s possible that you have heard these principles stated on our radio program in the past or read them in a Focus on the Family publication. However, I think it’s important to restate them here as they not only relate to our recent dealings with the IRS but also encapsulate our commitment to being “above reproach” in every aspect of the ministry.

1. This ministry belongs to God, not to James Dobson. It is neither a monument to his ego nor a legacy to his memory. Focus on the Family does not bear his name . . . the buildings do not belong to him . . . we have not founded a James Dobson University. Dr. Dobson is merely a fellow servant in the work of the Kingdom.
2. The Lord has apparently chosen to place His mantle of approval on the ministry of Focus on the Family. Nevertheless, He gives and sometimes takes away. If He ever closes the doors to this work, we will accept His leading and yield the outcome to Him. Until then, we will devote every ounce of energy to the task at hand.
3. One of the ways we can discern the Lord’s will regarding the continuation of our work is through the support He sends (or doesn’t send) from His people. Therefore, during lean times we will make our obligations known to our friends—but we will not squirm, scratch or claw for contributions. We will never resort to what we consider to be disrespectful and dishonorable methods of fundraising, even when the needs are serious.
4. We will ask people not to support Focus on the Family or any other Christian program until their obligations to the local church have been met. The church is the first line of defense for the family.
5. We will not operate the ministry at a deficit. Although from time to time it is necessary to borrow funds for large capital expenditures, such as for a new building, we will seek to repay the loans as soon as possible.
6. We consider the contributions we receive to be “blood money,” sent from loving people who have sacrificed to make their gifts possible. Our obligation, therefore, is to spend that money conservatively and wisely in continuing the ministry. We have no limousines or airplanes or condos in Hawaii. Every penny is stretched as far as possible to serve the needs of today’s families.
7. We will receipt all donations, showing the fair market value of any materials requested and sent, in order to help contributors determine the tax-deductible portion of their gifts. (The U.S. Internal Revenue Code permits donors to deduct the amount they give to Focus on the Family in excess of the value of materials received from the organization. Receipts for Canadian donors are issued in accordance with Canadian law.)
8. When we make a purchase, we will pay the invoice within 30 days, if possible. We do not intend to use the vendor’s money.
9. We will not try to raise more money than we need.
10. Dr. Dobson will not be the primary fundraiser.
11. Dr. and Mrs. Dobson have accepted no salary for their work throughout the past 30 years. Furthermore, they pay a portion of the radio airtime expenses to compensate for the publicity that increases their book sales in stores. When their books are offered to our listeners, they waive all royalties to allow Focus to obtain the lowest possible price from the publisher. When they use secretarial or staff assistance for personal reasons, they compensate the ministry for that support.
12. Focus on the Family® and Focus on the Family Action™ will not sell, lease or rent their mailing lists or any of your confidential information to any outside organization or individual. However, we may need to disclose personal information as required by law—such as a law, regulation, court order, subpoena, search warrant in the course of a legal proceeding or in response to a law enforcement agency request; to enforce our Terms of Service or site rules; or to protect the safety and security of our visitors and our sites.
13. We will conform to the standards established by the Evangelical Council for Financial Accountability (ECFA) and the Canadian Council of Christian Charities (CCCC)—organizations created to ensure ethical fundraising and administration practices.

To summarize, we will try to remember always that Jesus Christ is our possessor and our dispossessor. He ordained and blessed this ministry. It belongs entirely to Him.

Another thought about fundraising: Many people who listen to our broadcasts and are assisted by our various ministries have told us that they want to know when there is a particular financial need. When that occurs, we seek to explain the situation without overstatement or pressure tactics. Frankly, this is one of those times at the end of our fiscal year when contributions have been insufficient to meet our budgeted obligations. If there are those among my readers who can help us through this squeeze, we would certainly appreciate your generosity. For those who cannot give at this time, we ask that you pray for this ministry and for all of us who are trying to serve the cause of Christ in this regard.

Thank you, friends, for your confidence in this ministry. Your prayers and support are blessings that we do not take for granted. We will continue to make every effort to earn and retain your trust for as long as the Lord enables us to keep our doors open. God’s blessings to you all.

Sincerely,

James C. Dobson, Ph.D.
Founder and Chairman