Finances of The Church of Jesus Christ of Latter-day Saints
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Finances of The Church of Jesus Christ of Latter-day Saints are similar to other non-profit and religious organizations, where the principal source of funding comes from the donations of its members and the principal expense is in constructing and maintaining facilities.
When the church takes in more donations than it pays out in period expenses, it uses the surplus to build a reserve for capital expenditures and for future years when period expenses may exceed donations. The church invests its reserve to maintain the principal and generate a reasonable return and directs its investments into income-producing assets that may help it in its mission, such as farmland- and communication-related companies (see below).
The church has not publicly disclosed its financial statements in the United States since 1959.[2] The church does disclose its financials in the United Kingdom, where it is required to by law.[3] These financials are audited by the UK office of PricewaterhouseCoopers.
The church maintains an internal audit department that provides its certification at each annual general conference that church contributions are collected and spent in accordance with church policy. In addition, the church engages a public accounting firm (currently Deloitte & Touche) to perform annual audits in the United States of its not-for-profit,[4] for-profit,[5] and educational[6][7] entities.
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[edit] History
After the U.S. government confiscated church property under the Edmunds-Tucker Act, the church fell into severe debt. The government had seized most church assets, including tithing money donated by members. As a result, by the time Lorenzo Snow became church president in 1898, the church was $2.3 million in debt.[8]
Snow reiterated the principal of tithing (giving 10% of one's income to the church) and by 1907 the church was completely out of debt and since then has not used debt to fund its operations, even for capital projects.[9]
[edit] Current Source of Funding
The church receives most of its funding from tithes and fast offerings (donations made to be used for the poor). It is estimated that about ten percent of its funding also comes from income on its investments,[10] mostly direct investments.
[edit] Use of funds
The church uses most of its financial resources to construct and maintain buildings and other facilities. The church also spends its funds on providing social welfare and relief and supporting missionary, educational, and other church-sponsored programs.[11] The church does not pay its local leadership, only the upper echelons of leadership (general authorities)[citation needed] and mission presidents[citation needed] receive payments from the church. Some of these leaders receive payments in the form of salaries, others in the form of housing and living allowances.[12][page # needed]
- Construction of facilities.
The church builds additional chapels (structures used for weekly worship and for baptisms) and temples (structures used for other rites and ordinances) as wards and branches of the church are organized. On average, the church builds a little more than one chapel a day. The church built about 40 smaller temples between 1998 and 2001. Currently there are 125 operating temples, 9 under construction, and 4 announced (not yet under construction). (See List of temples of The Church of Jesus Christ of Latter-day Saints.)
- Maintenance of facilities
The church pays to maintain its chapels and temples around the world. These costs include repairs, utilities, grounds maintenance, and specialized custodial work. Members also assist with cleaning local chapels by providing general custodial work. These facilities are cost-centers for the church, and maintaining them represents a siginificant use of the church's income.[13] These facilities are maintained to support the mission of the church.
This is a situation faced by other non-profit organizations. For example, as of 2002 the Archdiocese of Chicago had assets of over $2 billion, half of which was in non-income producing land and buildings. Maintaining the facilities represents what the Catholic Church calls "a huge, huge liability"[14] which threatens the Archdiocese's mission.
- Social welfare and relief.
The church operates a welfare distribution system, as it encourages members to seek financial assistance from family and church first before seeking public or state-sponsored welfare.[15] AgReserves Inc., Deseret Cattle and Citrus Ranch, and Farmland Reserve, Inc. are part of its welfare distribution system. Welfare resources are distributed by local bishops but maintained by the Presiding Bishop. See Preparedness. It also sends relief aid to victims of natural disasters such as earthquakes, tsunamis, hurricanes and others around the world. The relief effort has been recognized through many organizations and political leaders, including the United States leaders in reaction to the Hurricane Katrina relief effort by the church.
- Other programs.
The church also spends much of its money collected through tithing on missionary, educational, and other programs which the church considers to be within its mission. Although the families of Mormon missionaries (usually young men ages 19 - 21 or young women ages 21 - 23) generally pay $400 a month for missions,[16] additional general funds of the church support missionaries unable to pay for their own missions, mainly in less-developed countries. These missionaries are expected to repay the assistance they received when they are able to do so. Additionally, the church provides a mission office and mission home for each of its 340 missions and pays for television advertising offering free copies of the Book of Mormon, the Bible, church videos, etc. The church also owns and subsidizes education at its three universities (see Church Education). Throughout the world, it also supports Scouting programs for young men.[17] In addition, it supports its Seminary and Institute programs with tithing money.
- Volunteer Labor
The church tempers its cash expenses through the use of volunteer labor. As of 1995, the church's human resources department estimated that the 96,484 volunteers (not including 50,000 full-time missionaries) serving at the time contributed services with an annual value of $360 million.[9]
[edit] Assets
The church's gross assets were estimated in 1996 at more than $30 billion.[1] (This figure represents only one side of the balance sheet and does not include current liabilities for maintenance, although the church incurs virtually no long-term liabilites.[9]) The church responded at the time that that figure was "grossly exaggerated."[18] Whatever the actual figure, about two-thirds of it is made up of non-income-producing facilities and the land they sit on, including thousands of meetinghouses and over 120 temples the church operates world-wide, as well as educational institutions (mainly Brigham Young University).[10]
The remaining assets include direct investments in for-profit businesses managed through Deseret Management Corporation. Although the church is a tax-exempt organization, its for-profit entities generate "unrelated business income" that is subject to federal, state, and local income and other taxes.
The church's holdings include:
- AgReserves Inc. - the largest producer of nuts in America.[1]
- Beneficial Financial Group - An insurance and financial services company with assets of $3.1 billion.[19][1] This is 5% of the size of Thrivent Financial for Lutherans, a religious-oriented nonprofit investment company for Lutherans of any denomination in the United States, which has holdings of over $60 billion and some 3 million participants.[10][20]
- Bonneville International Corporation - the 14th largest radio chain in the U.S.[1]
- Deseret Morning News - a daily Utah newspaper, second-largest in the state.[21]
- Farmland Reserve Inc. - 228,000 acres (923 km²) in Nebraska,[22] and over 312,000 acres (1,260 km²) in Florida (dba Deseret Cattle and Citrus).[23]
- Hawaii Reserves, Inc. - Miscellaneous church holdings in Hawaii. Along with the Polynesian Cultural Center (the leading for-profit visitor attraction in Hawaii[24]) and Brigham Young University-Hawaii, Hawaii Reserves generated revenue of $260 million for the Hawaii economy in 2005.[25]
[edit] Notes
- ^ a b c d e Biema, David Van. Kingdom Come. Time Magazine, Vol. 150 No. 5, August 4, 1997. Retrieved 2006-09-02
- ^ Stack, Peggy Fletcher. "Order to release financial data has LDS Church, courts on collision course". Salt Lake Tribune. July 13, 2007. http://www.sltrib.com/themix/ci_6364841. Accessed 13 July 2007.
- ^ The Church of Jesus Christ of Latter-day Saints, Great Britain Financial Statements - provided by the Charity Commission based on the Charities Act
- ^ "Why Deseret Trust Company?" http://www.lds.org/deserettrust/why.html. Accessed 15 May 2007.
- ^ Belo Corp Form 8-K. http://sec.edgar-online.com/1995/04/10/00/0000950134-95-000692/Section3.asp. Accessed 16 May 2007.
- ^ "Financial Planning". finserve.byu.edu. http://finserve.byu.edu/files/archives/Handouts/November%202005/Finance%20Section%20Draft%207-Without%20Requirements.doc. Accessed 16 May 2007.
- ^ "Finance". accredit.byu.edu. See page 9 of pdf document available at http://accredit.byu.edu/resources/selfstudy/Standard_7.pdf?lms=30. Accessed 16 May 2007.
- ^ "Lorenzo Snow". http://www.historyofmormonism.com/lorenzo_snow.html. Accessed 29 May 2007.
- ^ a b c Hinckley, Gordon B. "Of Missions, Temples, and Stewardship". Ensign. November 1995, p. 51.
- ^ a b c Mormon Inquiry article
- ^ Church Finances. newsroom.lds.org.
- ^ Ostling, Richard N. and Joan K. (1999). Mormon America: The Power and the Promise. San Francisco: Harper.
- ^ Hinckley, Gordon B. "The Widow's Mite". BYU Speeches. 17 September 1985. See [1].
- ^ "Catholic Church Finances". Religion & Ethics Newsweekly. PBS.org. Episode no. 545. 12 July 2002. Catholic Church Finances. Retrieved on 2007-04-10.
- ^ The Stake President’s Role in Welfare Services - General Conference Oct 1978
- ^ Acts of Faith: 2005 The News & Observer
- ^ History of Scouting in the Church. Retrieved on 2007-11-07.
- ^ Hinckley, Gordon B. (November 1997). "Latter-day Saints in Very Deed". Ensign 27 (11): 85. Retrieved on 2008-02-22. “A recent magazine article praised us as a well-run financial institution of great wealth. It grossly exaggerated the figures.”
- ^ Financial Information. beneficialfinancialgroup.com. Beneficial Financial Group. Retrieved on 2006-01-25.
- ^ Thrivent.com Facts. Thrivent Financial Facts. Retrieved on 2007-04-10.
- ^ Deseret News Publishing Company is a Subsidiary of Deseret Management Corporation a for-profit corporation affiliated with the Church[2].
- ^ Duggan, Joe, Mormon land holdings rise. Lincoln Journal Star 2004-10-03.
- ^ Deseret Cattle and Citrus Ranch east of Orlando, Florida is the world's largest beef ranch, and the land is worth an estimated $858 million. (Biema, 1997)
- ^ History from Polynesian Cultural Center website
- ^ Pacific Business News (Honolulu), 6 March 2007. http://www.bizjournals.com/pacific/stories/2007/03/05/daily29.html. Accessed 8 March 2007.
