People are free to make their own choices and believe what they want. We respect those rights. But when I read this morning what David A. Nielsen, a former employee of The Church of Jesus Christ of Latter-day Saints, did recently, I was sad, mostly for him and his family.
I couldn’t avoid but thinking about some people in the history of the Church, or even some whom I know personally, who at a certain point of their lives decided not only to leave the Church, but also to attack it. Their lives, in many cases, take a downturn.
Mr. Nielsen, who used to work for the investment arm of The Church of Jesus Christ of Latter-day Saints, filed an IRS complaint last month alleging that the church should be forced to pay taxes on returns made from invested tithing funds and challenging the faith’s investment strategy, humanitarian efforts and tax-exemption status.
The Washington Post was the first to publish a story on the IRS complaint Monday evening, after speaking with Nielsen’s twin brother Lars, who has posted videos on YouTube with a link to documents he said Nielsen took from his former employer to back his claims.
The church responded in a statement released Tuesday morning to this allegations:
“We take seriously the responsibility to care for the tithes and donations received from members. The vast majority of these funds are used immediately to meet the needs of the growing church including more meetinghouses, temples, education, humanitarian work and missionary efforts throughout the world. Over many years, a portion is methodically safeguarded through wise financial management and the building of a prudent reserve for the future. This is a sound doctrinal and financial principle taught by the Savior in the Parable of the Talents and lived by the church and its members. All church funds exist for no other reason than to support the church’s divinely appointed mission.
“Claims being currently circulated are based on a narrow perspective and limited information. The church complies with all applicable law governing our donations, investments, taxes and reserves. We continue to welcome the opportunity to work with officials to address questions they may have.”
The title of the article by the Washington Post is misleading, but I understand that they want to attract readers. The article is titled: Mormon Church has misled members on $100 billion tax-exempt investment fund, whistleblower alleges.
They clearly didn’t get yet the message about the name of the Church, but also to say that the Church “misled members” is a statement that I believe, may “misleads their readers”.
On the other hand i really loved the article by Hal Boyd and Lynn Chapman on the Deseret News, titled The Washington Post says the Church of Jesus Christ has billions. Thank goodness.
I quote here a few very instructive paragraphs:
…the church actually practices what it preaches regarding provident living and self-reliance. They take seriously the biblical story about Joseph and Egypt’s seven years of plenty followed by seven years of famine.
In an age of ballooning federal deficits, massive student debt and failed pension promises, we should perhaps be a bit slower to blow whistles when an organization — once on the brink of financial ruin — actually stays out of debt and saves for a rainy day. This is especially important for a church, a common place to which people turn for help during times of economic distress.
As a nation, and especially as individuals, we would all do well to try harder to model this behavior….
After publishing an exhaustive 1,000-page deep dive into the church’s finances, noted historian and long-time church critic, D. Michael Quinn, characterized the sweeping narrative history of church finances as “an enormously faith-promoting story.” He said that if people understood “the larger picture” on church finances they would “see the church is not a profit-making business.” Yes, the church saves and invests its surplus pennies, but it also helps vastly reduce the debt of college students, gives to the poor regardless of background and supports one of the largest non-governmental welfare programs in the country. Most importantly, it does all this without enriching those at the top.
Another article by Deseret News reminds us that
the church teaches its members to be self-reliant and build a personal or familial reserve. Its leaders say the church follows the same principles.
Presiding Bishop Gérald Caussé referred to those principles last year in a public talk and published later in a book: “The church applies this same principle in its own savings and investments. In addition to food and emergency supplies, the church also sets aside funds each year for future needs. These funds are added to church reserves, which include stocks and bonds, taxable businesses, agricultural interests and commercial and residential property. Investments can be accessed in times of hardship or to meet the emerging needs of a growing, global faith in its mission to preach the gospel to all nations and prepare for the Second Coming of Jesus Christ.”
In 2018 the church published an article on Church Finances that included the following Q&A.
Q&A on Church Finances and a Growing Global Faith
Q: How does the Church use tithes and other funds? Why does the Church need financial resources?
The Church of Jesus Christ of Latter-day Saints was established to preach the gospel of Jesus Christ and invite all to follow Him. This is a broad, worldwide work that requires considerable resources. The Church supports more than 30,000 congregations and maintains thousands of chapels and meetinghouses; it operates employment centers, storehouses, family history centers, seminaries and institutes, schools, universities and other higher education initiatives, and 159 temples around the world (with another 30 announced or under construction). The Church oversees approximately 70,000 missionaries in hundreds of proselytizing, service and humanitarian missions. This work continues to grow, often in areas with significant temporal needs. To accomplish this work, the Church follows the financial principles it teaches: living within a budget, avoiding debt and saving and investing for the future.
Q: Why doesn’t the Church publish its financial information?
The Church is not a financial institution or a commercial corporation. It has no other objective than preaching the gospel and inviting all to come unto Christ. While the Church chooses not to publish the details of its finances, the Church does provide public information on the financial principles it follows, the financial controls in place to protect Church funds and the source and use of these funds. The Church also provides all financial information required by law.
Q: Is the Church a rich church?
Some people occasionally describe the Church as a prosperous organization. However, the strength of the Church cannot be measured by its financial holdings or real estate assets. As President Gordon B. Hinckley said, “When all is said and done, the only real wealth of the Church is in the faith of its people” (“The State of the Church,” 54). The relative current prosperity of the Church only reflects the faith of its members in observing the law of tithing and other guiding principles such as provident living and self-reliance. It is based on the Lord’s promise that “inasmuch as ye shall keep my commandments ye shall prosper in the land.” This promise appears in 18 verses of the Book of Mormon, and Latter-day Saints believe it continues to apply today.
Additionally, some people may try to attach a monetary value to the Church in the same way they would assess the assets of a commercial corporation. Such comparisons simply do not hold up. For instance, a corporation’s branch offices or retail outlets have to be financially justified as a source of profit. But every time the Church builds a place of worship, the building becomes a consumer of assets and a financial obligation that has to be met through worldwide member donations. The ongoing maintenance and upkeep, utilities and use of the building can only be achieved as long as faithful members continue to support the Church.
Q: Does the Church pay taxes?
The Church of Jesus Christ of Latter-day Saints pays all taxes that are required by law. Latter-day Saints believe in “obeying, honoring, and sustaining the law” (Articles of Faith 1:12). Worldwide, the Church and its affiliated entities pay applicable taxes and other governmental levies. In the United States, where churches and other nonprofit organizations are generally exempt from federal and state income tax, the Church pays taxes on any income it derives from revenue-producing activities that are regularly carried on and are not substantially related to its tax-exempt purposes. Church-affiliated entities that are organized as for-profit corporations pay regular federal and state corporate income taxes on their net income. The Church and its affiliated entities also pay property taxes on property that is not used for religious, educational or charitable purposes, including taxes on undeveloped land and properties held for investment or commercial purposes. Government fees, levies and assessments are paid in connection with the development of Church property. The Church also pays federal and state employer taxes and withholds and remits employee payroll taxes. Where applicable, the Church and its affiliated entities pay state and local sales and use taxes.
Q: What controls are in place to prevent the misuse of funds?
Church leadership is very aware of the sacred nature of Church resources and takes great care to ensure that tithes and other funds are used prudently and are protected from misuse. Any person found misusing sacred tithes or other donations is subject to Church discipline.
The expenditure of Church funds is approved by the First Presidency, the Quorum of the Twelve Apostles and the Presiding Bishopric. These senior leaders counsel together and make decisions to allocate funds. Additionally, certified professionals perform regular audits to ensure strict adherence to standard accounting principles and Church policies. Auditors are also called locally to perform periodic audits in wards and branches following detailed guidelines and processes provided by the Church.
Q: Does the Church have investment reserves? What kinds of investments does the Church possess?
The Church maintains diversified reserves — including common stocks and bonds, interests in taxable businesses, commercial and residential real estate and agricultural properties — to provide financial support for the Church’s ongoing and future operations. These funds are invested solely to support the Church’s mission to preach the gospel to all nations and prepare for the Lord’s Second Coming. Some Church investments, such as agricultural interests, preserve and enhance Church resources but may also be deployed to meet acute needs.
Q: Does the Church have resources invested in the stock market?
Yes. These funds are part of the financial reserves that allow the Church to address needs as it continues to grow and administer programs around the world. Each year, the Church sets aside a portion of its funds to save and invest.
Q: How does the Church choose stocks and bonds in which to invest?
The Church strives to be a good steward of these resources and has certified professionals invest Church funds in a broad and diversified manner. Professional financial advisers select and manage specific investments.
Q: Where does the money for the Church’s reserves come from?
The vast majority of Church operations are funded through the sacred tithes and offerings given by members. The Church operates within its means and sets aside a portion of its funds each year. The Church follows the financial principles it teaches: living within a budget, avoiding debt, and saving and investing for the future.
Q: Why does the Church maintain financial reserves when there are so many unmet humanitarian needs currently in the world?
The Church has spent billions of dollars over the past few years to meet welfare and humanitarian needs around the world. We anticipate that these needs will continue to increase over time. Church affiliated, for-profit entities also contribute to The Church of Jesus Christ of Latter-day Saints Foundation, which gives to various charitable causes. Church members donate their own time and resources to support many other charitable endeavors. This is part of the Church’s divine mission.
In addition to humanitarian and welfare efforts, Church financial reserves provide resources to sustain the Church’s future growth as prophecy is fulfilled that the gospel of Jesus Christ will be taught and the Church established in all nations of the earth until the Savior’s return. Ever-increasing financial means are needed to preach the message of Jesus Christ throughout the world, build and operate a fast-growing number of temples and houses of worship, and provide educational and other opportunities to lift people out of poverty and promote self-reliance.
Q: Why does the Church ask members with limited means to donate 10 percent of their income as tithing?
Latter-day Saints believe that God promises and provides spiritual and temporal blessings to those who follow His commandments, including the commandment to tithe. Tithing is a spiritual principle through which the Lord funds His Church. The Church is acutely concerned with helping individuals rise out of poverty; it dedicates significant resources toward educational, humanitarian and welfare efforts aimed at helping people achieve personal self-reliance. Paying a full tithe is an act of faith and obedience to God’s commandments. Those who choose to pay tithing often attest to the blessings that come from their decision.
Q: How and when are Church reserve funds used?
Historically, when resources have been scarce or when there have been demands associated with growth, reserve funds have been available to assist in supporting the operations of the Church.
Reserve funds provide for the future. Church financial reserves assure resources will be available to sustain the Church’s future growth as prophecy is fulfilled that the gospel of Jesus Christ will be taught and the Church established in all nations of the earth until the Savior’s return. The Church anticipates building additional chapels and temples. Welfare and humanitarian efforts will continue to increase. Missionary work, education needs and other programs to benefit people around the world will require additional resources. Whether Church funds are from reserves or directly from the tithes of members, all are used for the singular purpose of supporting the mission of the Church. Reserve funds exist for no other reason.