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nor were the legal merits of the whistleblower’s claims examined with much scrutiny.
I think that legally, churches in the United States are given significant freedom from regulators. The laws that apply here are very vague and essentially give the church the ability to do what it wants as long as the money is plausibly dedicated to the mission of the church. (as an aside, I think that if we said that the money was in preparation for the 2nd coming this would satisfy the requirement that the church’s money is used to further the church’s mission. I think that we do not take that approach publicly to avoid the following headline: “Mormons amass obscene wealth to prepare to withstand the end of days”) For the church to amass this wealth and invest it tax free is certainly legal. However, the lawmakers do not seem to have envisioned a church quite as “industrious” as ours when the laws were made. Soooo the church is taking full advantage of the legal loopholes/freedoms afforded by the law and is in some ways testing and stretching the boundaries.
We may see a day when the law is changed to limit the amount of rainy day or emergency funds that churches can stash away tax free. If that ever happens, Ensign Peak would make a good “exhibit A” for why such a regulation would be needed. This hypothetical scenario might force the church to separate Ensign Peak and/or start paying taxes on some part of the money. I think that is what the whistleblower’s manager was referring to in the 60 minutes clip when he said that Ensign Peak could lose its tax exempt status if the size of the investment were more widely known.
At the same time, I do not think that there is much appetite for changing the law. It could easily be painted as an attack on religious liberty.
Remember this unsourced justification for the church’s need for secrecy that was published in the Deseret News just 3 months ago? Quote:The church said it wanted to maintain the privacy of its holdings. Some church officials said previously that they wanted to avoid church members following church investments as a roadmap for personal investing because they might not be appropriate to their circumstances.
Let’s just say that it has not aged well as more information has come to light.
I think the reason they want confidentiality in church holdings is that if everyone knew just how much money the church has, they would reduce their donations. The reason given above appears to be a sanitized reason. SilentDawning wrote:
I think the reason they want confidentiality in church holdings is that if everyone knew just how much money the church has, they would reduce their donations. The reason given above appears to be a sanitized reason.
I agree SD. I think that’s why the church goes to “great lengths” (quoting the SEC) to conceal how much money they have, how much they make, and what they spend it on.
That doesn’t exactly build trust with the membership. On one hand the church requires big sacrifices in time and money, but on the other hand, is unwilling to be transparent about their holdings. Not very equitable in my view. SilentDawning wrote:That doesn’t exactly build trust with the membership.
It really doesn’t. Leaders should be on an apology tour kissing people’s butts but all we’re going to get is indignant excuses.
SilentDawning wrote:On one hand the church requires big sacrifices in time and money, but on the other hand, is unwilling to be transparent about their holdings. Not very equitable in my view.
Unwilling to be transparent and unwilling to match the sacrifices that members make. The church is stingy with its resources. Ward budgets are a joke.
Gordon B Hickley made a comment about church finances at a conference once. He made a comment that most of the church’s assets are in property which is very expensive to maintain. Looking at this from an accounting perspective, he seems to have inadvertently misclassified our buildings as cost centers when they are really profit centers. Tithing funds can be traced to chapels/meetinghouses and temples, which then have their own expenses. I would argue that tithing more than covers the costs of running and maintaining such buildings, making each of the buildings a profit center. Granted, in the non-profit world, we don’t refer to surpluses as profit, but rather, as proceeds, but the point is the same.
Regarding ward budgets — I was once very ticked when I was a HPGL in one ward. We had more families to home teach than we could handle given a low activity rate. I then resorted to sending letters to people we couldn’t reach — once a month. Our Bishop indicated they made a difference because people he met with that were less active would refer to them, that they read them, and that they made a difference. I later asked if we could fund the letters out of the ward budget as I was paying $50 a month in stamps and envelopes to send the letters. The Bishop refused. That bothered me a I was paying tithing, and fast offerings, and the extra $600 year when I was the sole breadwinner with a young family was a burden.
And you can imagine my chagrin when I heard the Bishop sent unspent budget money back to the stake at the end of the year.
There are many times when I feel the church’s priorities are misplaced. I think we are partly influenced by the financial troubles in our history, which, being a gerontocracy, are times that are still vivid in the minds of our leaders. But still, I agree that it seems unfair that the church would be so untransparent, and well, at times, stingy with its funds while being so demanding that members sacrifice so much to be in good standing.
nibbler wrote:
Roy wrote:
I don’t remember the church asserting that. What I think you may be remembering is that specific projects (like the mall) were not funded by tithing contributions. I think this is largely correct. Let’s say that half of the money is direct from tithing contributions and the other half is growth on those invested tithing dollars. The church could spend 50 billion without touching the original tithing seed money. To put it another way, until the balance in the investment account dips below the amount of all tithing money invested then the church can accurately say that no “tithing dollars” have been used for XYZ.
I’ve probably mentioned this before but I’d love for the church to give me the paltry sum of $100 million dollars. I’d stick it in a one year CD earning 4% or so. In a year I’ll give back their $100 million, not one penny less.
That $4 million that magically appeared in my account? I’m going to hold on to that because the money the church gave had nothing to do with it.
To your very last comment Nibbler, you could argue that any return on surplus tithing invested is also tithing money. It was generated by tithing principal so in my view it’s source was tithing money.
Here’s a great panel discussion on the subject. The fine the SEC gave the church and EPA was nominal (as a % of its size) because it didn’t violate the spirit of the law, which was to prevent a fund of that size to manipulate markets and take over boards.
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