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Jim Bakker, the televangelist who turned “The PTL Club” into a TV empire and then was sentenced to federal prison over its finances, died Monday, Oct. 5. He was 86. (1)
In the 1980s, PTL drew millions of viewers and millions of dollars a year from followers. In 1988, Bakker was indicted on mail-fraud, wire-fraud and conspiracy charges after an investigation of the ministry’s money. He was convicted and sentenced to 45 years, later reduced to eight. (1)
Decades later, Missouri’s attorney general sued him over claims made on his show that a product called Silver Solution could fight the coronavirus. He settled in 2021, agreeing to $156,000 in refunds without admitting wrongdoing. (1)(2)
I’m a CPA, and I’ve been writing about money for more than 35 years. Bakker’s story is old news. The lesson in it isn’t: generous people are easy marks for anyone who wraps a money pitch in faith, hope or a miracle.
And here’s a fact many donors may not know. Under IRS rules, churches that meet the requirements of Section 501(c)(3) are automatically considered tax-exempt and don’t have to apply for that status — and churches are on the list of exceptions to filing the annual Form 990 return. (3)
Before you send a ministry — or any charity — another dime, here are 5 checks I’d make.
1. Know what you can’t see
The annual Form 990 is how outsiders can see where a charity’s money goes, and you can pull up filed returns through the IRS. (4) Churches, as opposed to some other religious organizations, are excepted from that filing. (3)
That doesn’t mean your church is hiding anything. But it does mean there’s no public annual return for you to check.
So ask. Request the ministry’s annual financial statement and find out what share of donations goes to programs. A group with nothing to hide will hand it over. One that won’t has given you your answer.
2. Look it up before you give
The IRS has a Tax Exempt Organization Search tool. Use it to check whether a group is eligible to receive tax-deductible contributions and to pull up any Form 990 returns it has filed. (4)
The Federal Trade Commission also suggests checking a charity with the BBB Wise Giving Alliance, Charity Navigator, CharityWatch or Candid before you donate. (5) It takes a few minutes.
A TV studio with nice lighting proves nothing. A track record does.
Quick aside — most internet financial advice comes from people who weren’t alive during the last recession. I’ve been writing about money for more than 35 years. Want rock-solid advice? Sign up for the free Money Talks Newsletter. Takes 10 seconds. No fluff. No spam.
3. Never buy a miracle
On Bakker’s show in February 2020, a guest — who acknowledged it hadn’t been tested on the new strain — claimed Silver Solution had been tested on other strains of coronavirus and could eliminate them within 12 hours. (2)
Missouri sued. The 2021 settlement barred Bakker from advertising or selling the product “to diagnose, prevent, mitigate, treat or cure any disease or illness.” (2)
My rule is simple: if a cure is being sold on television, especially with a “gift” or “love offering” attached, ask your doctor before you open your wallet. Real medicine doesn’t come with a donation form.
Staying a step ahead of pitches like this is easier when someone’s watching for them. For example, AARP.
Think AARP is only for people over 50? It’s not — nearly any adult can join. Along with member discounts on travel, dining, eyeglasses and prescriptions, you get the AARP Fraud Watch Network.
At as low as $15 for your first year with auto-renewal, a single use of one benefit can cover the cost. Check it out here.
4. Slow down, and pay with a card
The FTC’s warning fits every pitch, holy or not: scammers pressure you to give right away so you don’t have time to research their claims. (5)
The FTC also says paying by credit card is your safest bet. Scammers often ask you to wire money, buy gift cards or pay with cryptocurrency. And if anyone says a gift card is the only way to give, the FTC says you know it’s a scam. (5)
Today, many of these pitches don’t come on TV. They come by text, email and phone. Scams, phishing texts, and fake calls slip right past traditional antivirus. Services like Guardio block them in real time across your phone, email, and accounts, plus alerts you the moment your data shows up somewhere it shouldn’t.
5. Get the paperwork, because the IRS wants it
Here’s the CPA part. You can deduct a contribution only if you give it to a qualified organization. (6) A gift to an individual, or to a group that doesn’t qualify, gets you nothing at tax time.
For any single gift of $250 or more, you need a written acknowledgment from the charity to back up the deduction. (6) Generally, you have to itemize on Schedule A to deduct charitable gifts. (6) But starting with tax year 2026, non-itemizers can deduct up to $1,000 in cash gifts to eligible charities ($2,000 for married couples filing jointly). (7)
If giving is a big part of your plans — in retirement or in your will — it’s worth building that plan with a pro. And it’s easier than ever to find one. For example, SmartAsset matches you with up to three fiduciary advisors, who are legally required to put your interests first. They can spot tax savings and planning gaps you might miss alone, not to mention offering expert investment advice.
Smart Asset is free, and it’s built for people with $100K+ in investments. The questionnaire takes about 10 minutes and asks for a phone number near the end — you decide whether and when to respond to anyone.
Get matched with a fiduciary advisor
SmartAsset is a matching service, not an advisor, and Money Talks News may be paid for referrals.
My honest take
I’m not telling you to stop giving. Some of the best money you’ll ever spend is money you give away.
But generosity and caution aren’t opposites. The people who sent PTL their checks weren’t foolish. They were trusting. That’s exactly what the wrong people count on.
So give generously — and give with your eyes open. Ask for the numbers, look the group up, never pay for a miracle, and get a receipt. Your faith deserves a ministry that can stand a little scrutiny.
Sources: 1. CBS News/AP; 2. KY3; 3. IRS Publication 1828; 4. IRS; 5. Federal Trade Commission; 6. IRS Publication 526; 7. IRS
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