It was founded founded in Monroe, LA in 1983 by its President, Nancy Alcorn.
The charity is not affiliated with the Catholic order, the Sisters of Mercy, who sometimes use the term "Mercy Ministries" in relation to their own work.
The July 2005 issue of Focus on the Family's magazine Brio and Beyond quotes Mercy Ministries' president Nancy Alcorn as saying, in reference to the first Mercy Ministries resident to give birth, "I sensed the Lord say, ‘If you will be obedient, this will be the first of hundreds of babies saved from abortion because girls have a practical way that they can come and choose life.’" Alcorn has stated that Mercy Ministries also welcomes girls who are "struggling with their sexual orientation."
On 4 June 2008, following allegations of abuse, Mercy Ministries Australia announced plans to close its Sunshine Coast facility, citing "strategic and resourcing issues." On 1 August 2008, The Tennessean reported that Mercy Ministries Founder and President, Nancy Alcorn stated that the Sunshine Coast home lacked the financial and personnel resources to provide quality service. Alcorn said she agreed with a decision to close the Sunshine Coast home down, and said "What we are trying to do is to get back to the level of excellence and professionalism." "If there is a gross violation of the Mercy vision and a refusal to change — then we have the right to take action." "We have a right to tell them they can no longer use our name.
In addition to decision-making classes to help pregnant clients choose whether to parent their child or place their child, Mercy Ministries also runs an adoption agency, for clients who choose to put their child up for adoption. .
One of Mercy Ministries’ core principles is to take no government funds, due to concerns that this would oblige it to modify its program to satisfy government requirements regarding the separation of church and state, although residents in the Australian program who qualify for Centrelink payments are required to contribute those to Mercy Ministries for the duration of their stay.
Gloria Jean's Coffees is a major corporate sponsor of Mercy Ministries Australia. "Gloria Jean’s Coffees chose to support Mercy Ministries because there is a need in Australia for a dedicated charity that helps women with these difficult issues," said Peter Irvine, co-founder of Gloria Jean's Coffees and former executive director of Mercy Ministries Australia . Nabi Saleh, sits on the Hillsong Church Board. Mercy Ministries' programs are advertised in pamphlets available at Gloria Jean's outlets in Australia, though the organisation's connection to the Hillsong Church is not mentioned.
Mercy Ministries Australia has denied the allegations. Peter Irvine, a director of Mercy Ministries Australia and co-founder of Gloria Jean's Coffees, quoted a 95% success rate and insisted that residents received daily counselling from qualified professionals. Irvine asserted that Mercy Ministries has received "overwhelming positive feedback from graduates, their families and the community" and that residents were made aware of the details of the programs before they joined. His statement has since been revised to weekly counselling sessions, with a success rate of 90%.
On 16 April 2008, the Australian Democrats announced that the Australian Competition and Consumer Commission (ACCC) would be investigating Mercy Ministries Australia over possible breaches of Australian trade practices law, including the allegations that it mislead clients into believing that the program would provide professional medical and psychiatric care for their patients, and that it was free of charge.
Several of Mercy Ministries' Australian corporate sponsors publicly severed their connection with Mercy Ministries in the wake of the allegations.
On 18 July 2008, LIVENEWS.com.au reported that ‘Mercy Ministries’ is in serious trouble, and that three former residents told the website "they were left in a worse state after going to stay at Mercy Ministries" despite the group's "promise of free treatment". One said "she quickly became disheartened after 'free' meant signing over her Centrelink payments to the group and 'treatment' didn’t include proper access to doctors, psychologists and social workers. I spent months there and the only 'therapy' I had was prayer readings and an exorcism".
On 1 August 2008, The Tennessean quoted a member of the South Australian Parliament as stating that Mercy Ministries is "a particularly bad example of a money-making cult, posing as a Christian-based counseling service." Nancy Alcorn, Founder and President of Mercy Ministries, told the newspaper that she was disturbed that Mercy Australia asked girls to sign over their unemployment benefits. Despite advertising that their service was free, Mercy Australia had a standard policy of requiring residents to sign over payments from Centrelink, the Australian government's social security agency. "Taking those funds, it sends the wrong message," she said. "This is their money."
As well as many residents making official complaints about their treatment at Mercy Ministries Australia some former Nashville residents have also spoken about being required to take part in group prayer sessions for casting out demons. One former resident stated she was warned after the exorcism that if her eating disorder persisted, the demons would return.
Demonic oppression is also addressed in a series of books by Nancy Alcorn that Mercy recently published. And in a sermon posted on Youtube, Alcorn claimed Mercy's approach to be superior to conventional psychology, which often relies on psychotropic medication. She said that girls with issues like sexual promiscuity or eating disorders have opened themselves up to demonic activity. "Secular psychiatrists want to medicate things like that," she said. "But Jesus didn't say to medicate demons, he said to cast them out.
Former resident Naomi Johnson has gone on record as saying that all residents, regardless of their reason for entering the program, were repeatedly made to watch educational videos from ex-gay spokesperson Sy Rodgers, and that they were also issued what staff referred to as “separation contracts” to prevent any close emotional or lesbian relationships from forming between residents.
LGBT publication SX News has reported that then Executive Director of Mercy Ministries Australia, Peter Irvine, confirmed Mercy Ministries' "non-acceptance of GLBTIQ lifestyle and abortions. and that "Mercy Ministries doesn't support the gay lifestyle." However, in an 18 March 2008 interview, Irvine insisted that “Mercy Ministries does not target any group, including the gay community, and does not have an anti-gay program.” Mercy Ministries maintains that conversion therapy is not a part of the its program.