Lds Church Issues Statement Re: Church Finances

[smac97]

Here: http://www.mormonnewsroom.org/article/church-financial-independence

COMMENTARY — 12 JULY 2012

The Church and Its Financial Independence

SALT LAKE CITY —

The growth of The Church of Jesus Christ of Latter-day Saints from a fledgling band of frontier Americans to a global faith that blesses the lives of millions is one of the great religious success stories of the 19th and 20th centuries.

From the very beginning, members of the Church displayed a remarkable ability to set aside material things for spiritual goals. One of the earliest Church members, Martin Harris, mortgaged his farm to pay for the publication of the Book of Mormon. Other examples of self-sacrifice among the early Latter-day Saints abound.

Driven from place to place – from Missouri to Illinois to the far reaches of the western frontier – Church members several times abandoned their homes, farms and cottage businesses they had lovingly nurtured. By the time they made the final great trek across the American Plains to the Rocky Mountains, many were already impoverished. Those who came by handcarts because they could not afford wagons are a poignant testimony to that fact.

Brigham Young once remarked that if the Latter-day Saints could have ten years unmolested in the Rocky Mountain Valleys, they would establish themselves as an independent people. Over time Brigham Young’s vision of a thrifty, independent and spiritual people largely came to be realized.

Complete financial independence and freedom from debt would take several decades, however. Historians today point to the early 1900s as the time when the Church finally began to turn the corner and free itself from decades of indebtedness – specifically highlighting a sermon by Church President Lorenzo Snow in which he called on the Latter-day Saints to renew their commitment to the principle of tithing.

Tithing is an ancient biblical principle, and has been practiced by many churches through the centuries. Independent studies show, however, that nowhere else in America today is the principle of tithing so widely and faithfully followed as among members of The Church of Jesus Christ of Latter-day Saints. The vast majority of the income used to manage the Church comes from tithing, not from businesses or investments.

Tithing has thus proved to be an enormous blessing to the Church and its people, along with simple but sound economic principles such as avoiding debt, living within one’s means, and setting aside funds for a rainy day.

The key to understanding Church finances is to understand that they are a means to an end. They allow the Church to carry out its religious mission across the world.

Does the Church own for-profit businesses? Yes. In the Church’s earlier history as it was establishing itself in the remote intermountain west, some of those businesses were necessitated by the simple fact that they didn’t exist elsewhere in the community. Gradually, as private businesses developed and the need for Church-owned businesses diminished, they were sold off, donated to the community or discontinued. Zions Bank and the LDS Hospital system are examples.

Today, the Church’s business assets support the Church’s mission and principles by serving as a rainy day fund. Agricultural holdings now operated as for-profit enterprises can be converted into welfare farms in the event of a global food crisis. Companies such as KSL Television and the Deseret News provide strategically valuable communication tools.

Tithing funds are used to support five key areas of activity:

• Providing buildings or places of worship for members around the world. We have thousands of such buildings and continue to open more, sometimes several in a week.
  
• Providing education programs including support for our universities and our seminaries and institute programs.
  
• Supporting the Church’s worldwide missionary program.
  
• Building and operating nearly 140 temples around the world and the administration of the world’s largest family history program.
  
• Supporting the Church’s welfare programs and humanitarian aid, which serve people around the world — both members of the Church as well as those who are not members.
  

From time to time, some people including journalists 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 of Jesus Christ of Latter-day Saints 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.

On occasion someone will try to estimate the Church’s income and determine how much of that is used to care for the poor and needy. Again, they rarely capture the whole picture. The bedrock principles underlying the Church’s welfare and humanitarian efforts are Christ like service and self-reliance.

Nearly 30,000 bishops who oversee their respective congregations have direct access to Church funds to care for those in need, as they help members achieve self-sufficiency.

At Welfare Square in Salt Lake City, where the Church cans goods for its distribution warehouses, some procedures would be more efficient if automated. Instead, the Church has opted for more labor-intensive production lines that provide opportunities for people to give service and for welfare recipients to work for what they get. This is not the pattern of a commercial business, but it is the pattern for helping people to help themselves. The Church aim is to help individuals to overcome temporal barriers as they pursue spiritual values.

Published numbers related to our humanitarian efforts include only dollars spent directly on humanitarian service. The Church absorbs the administrative costs. Furthermore, these numbers do not reflect the Church’s extensive welfare and employment services that serve many thousands worldwide. They also do not represent Deseret Industries thrift stores that provide vouchers to other charities for their use, donations to food pantries, or humanitarian-or welfare-focused missionary service or support given to aid other relief organizations in their missions. Hundreds of thousands of hours of donated service underpin Church programs such as these.

The Church exists to improve the lives of people across the world by bringing them closer to Jesus Christ. The assets of the Church are used in ways to support that mission. Buildings are built for members to come together to worship God and to be taught the gospel of Jesus Christ. Missionaries are sent to invite people to come to Christ. Resources are used to provide food and clothing for the needy and to provide ways for people to lift themselves up and be self-reliant. What is important is not the cost but the outcome. As former Church President Gordon B. Hinckley said, “The only true wealth of the Church is in the faith of its people.”

Those who attempt to define the Church as an institution devoted to amassing monetary wealth miss the entire point: the Church’s purpose is to bring people to Christ and to follow His example by lifting the burdens of those who are struggling. The key to understanding the Church is not to see it as a worldwide corporation, but as millions of faithful members in thousands of congregations across the world following Christ and caring for each other and their neighbors.

______________

Interesting stuff. A few thoughts:

1. The article's statement on the Church owning for-profit businesses is interesting: "Today, the Church’s business assets support the Church’s mission and principles by serving as a rainy day fund. Agricultural holdings now operated as for-profit enterprises can be converted into welfare farms in the event of a global food crisis. Companies such as KSL Television and the Deseret News provide strategically valuable communication tools."

2. The article's statement about attempts to valuate the Church's assets are interesting, but I would like to see more.

3. I liked the article's statement about how much the the Church spends on humanitarian purposes and how often media groups misstate these amounts is interesting.

I think this will generate a lot of discussion in the near future.

Thanks,

-Smac

[Calm]

From the very beginning, members of the Church displayed a remarkable ability to set aside material things for spiritual goals.

Sounds like a response to Bloomberg's presentation of the Church emphasizing material things.

[sjdawg]

I thought the statement was very well done.

[KevinG]

Those of you who have served in leadership positions know how robust and disciplined the accountability and accounting is in the church. I have been a contributor of these funds when able and a recipient of them when I needed. The opportunity to give and to receive help have both been growth opportunities for me. This is very well stated.

[Analytics]

Two thoughts. First, I thought this was interesting:

“Today, the Church’s business assets support the Church’s mission and principles by serving as a rainy day fund.”

This implies that the church uses some of the money it collects for the listed missions, and saves the rest by investing it in the “rainy-day fund” that consists of for-profit businesses. This vindicates the critics who have claimed that the for-profit businesses were in fact capitalized with tithing money.

Second, the fact remains that until the church discloses its financial statements to its members and other interested parties, interested parties will continue to speculate on what the financial statements reveal.

[Maureen]

Here: http://www.mormonnewsroom.org/article/church-financial-independence

...The key to understanding the Church is not to see it as a worldwide corporation, but as millions of faithful members in thousands of congregations across the world following Christ and caring for each other and their neighbors....

If this is how the LDS church defines itself, then members might need to stop using the over-used line of "The church is perfect, but the members are not." It looks like the LDS church has finally realized that the Church is its members.

M.

Edited July 12, 2012 by Maureen

[wenglund]

Two thoughts. First, I thought this was interesting:

“Today, the Church’s business assets support the Church’s mission and principles by serving as a rainy day fund.”

This implies that the church uses some of the money it collects for the listed missions, and saves the rest by investing it in the “rainy-day fund” that consists of for-profit businesses. This vindicates the critics who have claimed that the for-profit businesses were in fact capitalized with tithing money.

Congratulations. You got it exactly backwards.

Second, the fact remains that until the church discloses its financial statements to its members and other interested parties, interested parties will continue to speculate on what the financial statements reveal.

There will always be busybodies minding other people's business regardless what the Church chooses to do. You are a case in point.

Thanks, -Wade Englund-

[ERayR]

Two thoughts. First, I thought this was interesting:

“Today, the Church’s business assets support the Church’s mission and principles by serving as a rainy day fund.”

This implies that the church uses some of the money it collects for the listed missions, and saves the rest by investing it in the “rainy-day fund” that consists of for-profit businesses. This vindicates the critics who have claimed that the for-profit businesses were in fact capitalized with tithing money.

Second, the fact remains that until the church discloses its financial statements to its members and other interested parties, interested parties will continue to speculate on what the financial statements reveal.

Wrong implication. When it comes to church statements you always seem to have comprehension problems. HERE IS WHAT WAS SAID:

Today, the Church’s business assets support the Church’s mission and principles by serving as a rainy day fund. Agricultural holdings now operated as for-profit enterprises can be converted into welfare farms in the event of a global food crisis. Companies such as KSL Television and the Deseret News provide strategically valuable communication tools.

Broken down:

Today, the Church’s business assets support the Church’s mission and principles by serving as a rainy day fund. Meaning: Today(now) the for profit businesses are not necessarily used for church purposes as enumerated but are held as a rainy day fund for a time when charitable donations may not cover everything.

Agricultural holdings now operated as for-profit enterprises can be converted into welfare farms in the event of a global food crisis. Meaning: The time may come when a global food crisis may necessitate converting present day for profit agricultural enterprises to welfare farms to feed the needy.

Companies such as KSL Television and the Deseret News provide strategically valuable communication tools. Meaning: For profit communication companies are presently valuable church communication tools.

NOTHING about taking charitable donations to invest or support the for profit ventures.

Edited July 12, 2012 by ERayR

[Calm]

Notice the date for the quote as well as the talk referencing it. This is nothing new.

In 1946, Elder Albert E. Bowen had some thoughts on this scripture which struck a familiar chord in my heart. He said:

“The only way the Church can stand independent is for its members to stand independent, for the Church IS its members.

http://www.lds.org/general-conference/print/1982/04/employment-challenges-in-the-1980s?lang=eng Edited July 12, 2012 by calmoriah

[KevinG]

If this is how the LDS church defines itself, then members might need to stop using the over-used line of "The church is perfect, but the members are not." It looks like the LDS church has finally realized that the Church is its members.

M.

I think that statement would be better said, "the Gospel is perfect, the Saints are not."

[Calm]

This implies that the church uses some of the money it collects for the listed missions, and saves the rest by investing it in the “rainy-day fund” that consists of for-profit businesses. This vindicates the critics who have claimed that the for-profit businesses were in fact capitalized with tithing money.

Where does it say anything about tithing supporting businesses? It states instead that business are used to support the church either now or in the future from savings the businesses contribute to.

[KevinG]

Only 5 posts before someone started crowing on about how the LDS church should open its books to the public. That was faster than I had anticipated.

Let's see how long it takes before the topic gets mired down in minutiae about what the church spends its money on and how they can do better followed by calls for evidence to prove the non-substantiated accusations.

[KevinG]

Where does it say anything about tithing supporting businesses? It states instead that business are used to support the church either now or in the future from savings the businesses contribute to.

It doesn't. In fact donations and profits flow back and forth to support the entire enterprise, but the bottom line is the enterprise supports the mission and the sum total of assets and income flow towards that mission.

[Scott Lloyd]

Two thoughts. First, I thought this was interesting:

“Today, the Church’s business assets support the Church’s mission and principles by serving as a rainy day fund.”

This implies that the church uses some of the money it collects for the listed missions, and saves the rest by investing it in the “rainy-day fund” that consists of for-profit businesses. This vindicates the critics who have claimed that the for-profit businesses were in fact capitalized with tithing money.

I don't see how your conclusion follows. I see nothing in the article that could justify the assumption that the tithing money is converted into business expenditures. On the contrary, the very clear message I get is that the business holdings are there to be channeled into ecclesiastical purposes should the emergency arise.

[Calm]

I think that statement would be better said, "the Gospel is perfect, the Saints are not."

And in fact if one goes to lds.org one can see it is the doctrine of the Church (in other words the Gospel) that is said to be perfect, not the Church as a whole.

[bluebell]

This implies that the church uses some of the money it collects for the listed missions, and saves the rest by investing it in the “rainy-day fund” that consists of for-profit businesses. This vindicates the critics who have claimed that the for-profit businesses were in fact capitalized with tithing money.

I'm not getting how that statement implies that the critics are correct.

If the profits from Deseret Books, for example (a church business asset), are used as a 'rainy day fund', how does that mean that tithing money was used?

Second, the fact remains that until the church discloses its financial statements to its members and other interested parties, interested parties will continue to speculate on what the financial statements reveal.

I think we can all agree that for many critics, short of annoucing we really are as horrible as they have claimed, nothing will ever be enough to stop the speculation or criticism.

As a member, i completely accept that fact, and am pretty o.k. with it.

[Scott Lloyd]

If this is how the LDS church defines itself, then members might need to stop using the over-used line of "The church is perfect, but the members are not." It looks like the LDS church has finally realized that the Church is its members.

M.

...The key to understanding the Church is not to see it as a worldwide corporation, but as millions of faithful members in thousands of congregations across the world following Christ and caring for each other and their neighbor

I see the portion I have bolded as the operative part of the quote which, perhaps, you are missing. To the extent that the members uphold the ideals and teachings of the Church, they are the Church.

Edited July 12, 2012 by Scott Lloyd

[Calm]

interested parties will continue to speculate on what the financial statements reveal.

I suspect even if they were to reveal them a significant number of critics would still speculate due to believing the Church had lied in those statements.

[ERayR]

If this is how the LDS church defines itself, then members might need to stop using the over-used line of "The church is perfect, but the members are not." It looks like the LDS church has finally realized that the Church is its members.

M.

Huh. I think that line is the gospel is perfect...

Edited July 12, 2012 by ERayR

[Ariarates]

"Agricultural holdings now operated as for-profit enterprises can be converted into welfare farms in the event of a global food crisis."

Wow, their heads must have really hurt to come up with that one...

Drive by insults often result in thread bans.

[Scott Lloyd]

From the article:

Companies such as KSL Television and the Deseret News provide strategically valuable communication tools.

This resonates with me as one employed by a Church-owned media company. Within the last couple of years especially, I have observed the Church's media voices recommitting themselves to championing in a secular arena the values that Church members and others of similar ideals hold dear.

[guerreiro9]

This does appear to be a direct response to the Bloomberg article "How the Mormons Make Money" as it addresses many of the same issues. I do not make a habit of reading Bloomberg, can anyone comment on whether their articles tend to be of the same journalistic quality (or lack there of in this case) as this article. It really surprised me that Business magazine would release an article so full of assumptions and conjecture. Is that common in this area?

It would seem that in the interest of providing an accurate picture of a financial entity you would either avoid any financial references when data is not available, or you would provide a statement from the entity allowing them to explain their actions (such as the article given above) when you are going to make assumptions about their behavior.

In the interest of fairness the article in the OP does not provide much financial data either to backup its claims, but it does better explain the motivations behind some of its actions. Something like this would have been good to include along with the Bloomberg article.

[Yep]

Another statement along the same lines:

　Joseph Fielding Smith - Answers to Gospel Questions: Volume 3

Why Do the Authorities of the Church Engage in Business?

Question: "While I was conversing with a gentleman who does not belong to the Church, he raised the question, 'Why is it that the Authorities of the Church engage in business that belongs strictly to the business world?' He said this practice is contrary to the custom throughout the Christian world and is so out of harmony with the spiritual and religious needs of the members that it brings upon us universal criticism. He also felt that it was wrong and that the Church Authorities should devote their entire time to the teaching of the gospel and the spiritual welfare of the members as ministers do in other churches. This problem is new to us and we would like to receive the answer."

Answer: The idea that ministers of religion should depend on a salary and donations furnished by their congregations comes out of a long practice in the religious world. It was not so in the beginning when ministers labored with their hands for a living and blessed the people by encouraging words and spiritual counsel. In the true Church in ancient times this modern system was not the custom. The fact is that the Church of Jesus Christ of Latter-day Saints has many functions, not merely that of delivering discourses and giving counsel. From the very beginning the servants of the Lord depended upon their own industry for their support. Paul furnished a good example of this, for he practiced his trade as he traveled from place to place among the members of the Church without depending on the members. He did not receive a salary for his preaching. fn

Abraham, who because of his faithfulness was promised that the blessings of the gospel and the priesthood should descend through his lineage to the latest times, was a stockman, tending herds and flocks for his support and the support of those who depended upon him. It may be thought that Abraham's concern was solely with his family, but a more careful reading of the scriptures will reveal that he was at the head of a great company, and from it he was able to muster a force large enough to defeat the invading kings and rescue Lot from them. It was the same with the prophets in Israel. We do not read of any of them being employed with a salary, but they labored with their hands. The Lord commanded Moses to teach the Israelites to be industrious and show them the way.

THE LORD'S PEOPLE WERE INDUSTRIOUS

All through the ages the Lord taught his people to be industrious, and he gave them revelation from time to time directing them in matters of this kind. The idea that in the Church of Jesus Christ of Latter-day Saints the Authorities are breaking the rules and engaging in selfish enterprises for the purpose of getting wealthy, is an erroneous notion. The Lord taught his people by revelation through the Prophet Joseph Smith, that the members of the Church should be industrious and that their leading brethren should set an example in that direction.

It is, however, by divine revelation that the industries among the Latter-day Saints have been developed, and their leading men have set before them this example. It is by divine commandment that President Brigham Young and his brethren established the first commercial department store that was to be found in the borders of the United States.

Did they do this with the thought in mind of becoming wealthy? Verily, no. The propelling thought back of it was to give employment, to furnish the members of the Church the necessities of life at reasonable rates and thus be benefited and protected from those who came to sell goods at excessive profits.

It was by revelation that Israel in the days of Moses and the prophets were required to build and cultivate the land and be industrious. It is by that same kind of inspiration that modern Zion has been built and prospered.

COMPENSATION COMES FROM INVESTMENTS

Thoughts, such as these expressed by this gentleman, come through misunderstanding. Is it not better for the Authorities of the Church to receive compensation out of these industries and investments than to take it out of the tithing of the people? I am informed that the General Authorities of the Church are in no way paid out of the tithing of the Latter-day Saints. The tithes are used for the purposes for which they were originally intended. The compensation coming from these investments help to pay for the building of chapels, temples, and other edifices, thus lessening the burden that otherwise would be placed upon the people. When the true condition is thoroughly understood, the criticism which so frequently arises should cease.

Unfortunately there are those who seem to take delight in offering criticism and in finding fault without knowing the true conditions. Perhaps other churches would be better off, spiritually and temporally, if their ministers assisted the members in establishing industries and thus helped them financially to better their conditions. It can be said also that the officers of the Church of Jesus Christ of Latter-day Saints who labor without salaries coming out of the pockets of the members, are just as spiritually minded, have just as good judgment and wisdom in directing the temporal as well as the spiritual welfare of the people, as are any of the ministers who spend their entire time in what may be called spiritual counsel. For instance, the bishops of our wards and the presidents of our stakes and other officers give their time freely without any monetary compensation paid by members of the Church. It is equally true that the young men and women who are distributed over the face of the earth as missionaries of the Church pay their own way, or their parents do. We do not have a paid ministry, yet these brethren put in as much time in spiritual and Church duties, as do ministers of other denominations who devote their entire time, and in addition, they are under the necessity of earning their own living by their daily employment in industry. They do this because they have an abiding testimony of the divinity of the work the Church requires of them.

[KevinG]

"Agricultural holdings now operated as for-profit enterprises can be converted into welfare farms in the event of a global food crisis."

Wow, their heads must have really hurt to come up with that one...

Given the number of times the church has poured money and food into disaster areas and the individual Saints I know that opened their food storage up to locals during earthquakes and local disasters that statement is perfectly consistent with the way the Latter-day Saints operate.

[KevinG]

It really surprised me that Business magazine would release an article so full of assumptions and conjecture. Is that common in this area?

If by "this area" you mean the media. Yes, yes it is.