Church Finances Redux: Why Should The Books Be Opened?

[Analytics]

I'm guessing that many of you are familiar with the financial counselor Dave Ramsey. He has addressed this issue on his website:

Just like a household budget says a lot about a family, the church budget says a lot about a church.

What does your church think about missions? Look at the budget. What does your church think about outreach? Look at the budget. How much is your church spending on operating costs or building programs? Look at the budget.

Larry Burkett used to say, “Show me your checkbook, and I’ll show you your priorities.” The same can be said for churches. Spend 20 minutes looking at your church’s budget, and you’ll quickly be able to tell its priorities. That’s why it’s so important for the church to be open and honest with the congregation.

Demons hide in the dark. When you shine a light, the demons run and the angels smile. Church leaders should always welcome accountability for how they manage the church’s resources (i.e. God’s resources).

The church as a whole—not just the church leaders—must have the opportunity to see the budget. Everyone needs to be involved.

Now some churches say that the church members won’t be able to “grasp” the budget. If you have a large church with a multi-million dollar budget, then that may be the case. Maybe they won’t be able to grasp the budget.

But the church has the right to know how the hard-earned money they give is being used. You don’t have to babysit them and walk them through every single line item, but they have the right to know and you have the responsibility to tell them. Why would anyone want to go to a church that keeps that information secret?

http://www.daveramse...ndmoney_church/

Edited July 13, 2012 by Analytics

[ShawFanX]

My personal opinion is that as a matter of broad public policy any tax exempt organization should make its financial reports public, including all churches. The reason is that people should be able to review charitable organizations to ensure that their donations are being properly used as represented. Because this is my personal preference, I believe the Church should do so as well. If tax exempt organizations desire to not release its financial records, then it may only do upon losing its tax exempt status.

This makes little sense to me as tithing is not tax, nor does tithing represent funds that would have gone to the government had they not gone to the Church. I can choose to pay my tithing or not to pay it. I have full trust in the Church to use it for worthy purposes and projects, and am not at all sure I need the state to protect me from my own decisions here. The state, in other words, really has no business sticking its nose into what a private orginaization does with funds (so long as it is not criminal use) from private individuals who volutarily contribute to that organization of their own free will. If churches per se are exempt from taxation, then there's no reason to single out the LDS Church because it doesn't release its financial records. Its a church, as a church its tax exempt, and its faithful members contribute to it as they see fit based upon the faith and credit they place in its use of those funds. If I see what I believe to be misuse, I can make my problems known, or cease paying tithing.

Setting that public policy issue aside and assuming the tax regulations will not change any time soon, I still believe the members should have a right to view the public finances of the church. It was mentioned above that there is no legal or moral reason to do so, but I respectfully disagree. All money donated to the Church legally belongs to the Church to use as it deems appropriate; however, the money is really being held in trust for the benefit of all members, tithe payers or not.

Then there should be some compelling reason why the Church should be assumed, a priori, to be either incompetant or unethical in its use of those funds. What evidence is there that this has ever been the case in the past?

[ShawFanX]

There is a long, sometimes troubled history of relations between Church and State, both in Britain, the US and elsewhere. Historically, the position of Church was that it had jurisdiction over the European and other Christian States . . . not the other way around. In Britain, the reign of Henry VIII was a time of particular trouble, as the State asserted such control of the the Church that its executive became and still nominally is head of the established Church in Britain.

In any case, it remains, even in so miserable a time as the Obama Administration [i?] that the State has only limited jurisdiction to exercise any kind of regulatory or other power over the Church. At present, that limited jurisdiction empowers the State to ensure that Churches do not conflate their for-profit activities, if any, with their Church-qua-Church activities. The latter the State may appropriately regulate and tax . . . the former the State may not. "The power to tax is the power to destroy" is the watchword here: The feds may not tax states' activities . . . and they may not tax Churches' Church-qua-Church activities. They simply haven't the power.

I think this speaks well to my own concerns regarding the usually poisonous risks associated with bringing govenrment into various concerns private citizens have to steady some percieved ark. The idea as here concieved to use the mailed fist of the state to force the Church to open its books, on pain of losing its tax exempt status, is really, regardless of the words used to describe it, the "sicking" of government upon the Church to force an issue certain critics of the Church want forced, and given LDS history and present political conditions, as USU has already mentioned, unwise.

Now, the IRS, the agent [so-called] of the citizenry in the US, has all the information required by law from the for-profit activities, which the Church has spun off into wholly-owned entities like DMC. If someone were to show cause, they could obtain a Court order for disclosure of the tax returns of those subsidiaries. Just like someone could get your or my tax returns for good and sufficient cause.

The public has NOT LEGITIMATE INTEREST in the Church-qua-Church activities, either jurisdictionally or morally.

Exactly my point: what behavior in the past has the Church engaged in that would indicate such cause now?

[Verum]

In all seriousness, I think it is almost pointless to argue the point (pointless to argue points? ) of whether the church is properly using its finances. If one believes that the church is the only true church and is run by a prophet called by God, any use of church finances under the direction of His prophet would be authorized. The church could decide to put all of its money towards cat food and it would still be defensible as long as the prophet made that decision under God’s direction. And if God does not think it’s appropriate to provide financial transparency, then so be it—it is his will. So, I think the more relevant issue is whether one can discern whether the lack of transparency or use of church funds are actually the result of God’s will to move forward his work, or are they more the goals of men and the institution? I think many people ask themselves, if God were running this church here on Earth through a prophet, is this how we think he would operate? Discerning the will of God can be quite difficult combined with the fact that prophets are not infallible and can be capable of carrying out their own will and not God’s. But even if one believes that the church IS run by a divinely inspired prophet, one has to discern whether the prophet is acting as a man or as God’s mouthpiece in that moment. Joseph Smith made bad investments with member’s money, so church history proves that “true” prophets can make bad decisions with church finances. So when something is revealed as God-inspired that seems inconsistent with the way we think God would be and how he would act coming from someone who may or may not be a prophet, or from someone who IS prophet but may or may not be acting as a prophet at that moment, how can anyone discern? I didn’t really answer anything here, just thinking out loud…

Edited July 13, 2012 by Verum

[cinepro]

In all seriousness, I think it is almost pointless to argue the point (pointless to argue points? J) of whether the church is properly using its finances. If one believes that the church is the only true church and is run by a prophet called by God, any use of church finances under the direction of His prophet would be authorized.

What if one believes that the leaders of the Church are called of God, but also fallible men whom God may at times grant wide latitude into error and mistakes?

It's a little disconcerting to listen to defenders of the Church go on and on for 364 days a year about how fallible our leaders are and how God allows them to implement bad policies and teach false teachings and policies because they have "agency" and such things aren't "core doctrines" or "critical", and then for one day each year when the subject of finances comes up suddenly everything is being done under God's "direction" and "authorization."

[Verum]

What if one believes that the leaders of the Church are called of God, but also fallible men whom God may at times grant wide latitude into error and mistakes?

It's a little disconcerting to listen to defenders of the Church go on and on for 364 days a year about how fallible our leaders are and how God allows them to implement bad policies and teach false teachings and policies because they have "agency" and such things aren't "core doctrines" or "critical", and then for one day each year when the subject of finances comes up suddenly everything is being done under God's "direction" and "authorization."

Cinepro, I completely agree. Keep reading my last post and I think I made the same point. Church history tells us and the church openly acknowledges that they are infallible. Transparency is an appropriate way to protect against the infallibility of managing church funds.

Edited July 13, 2012 by Verum

[rongo]

The books should be kept private for the following reasons:

• None of those clamoring for the "opening of the books" have any legal or moral right to the data contained therein.
  
• None of those clamoring for the "opening of the books" would tolerate or countenance the same level of prurient intrusion into their own affairs.
  
• The publication would increase, not decrease the level of criticism (ignorant and otherwise) levelled against the Church. This is amply demonstrated from history.
  
• The perception (right, wrong, or indifferent) that the Church released its financial information in response to public pressure would encourage others to demand that the Church buckle to their pet agenda as well. This would increase, not decrease the riotous clamor of Babylon against the Church of Christ.
  

Paraphrasing a Hugh Nibley quote off the top of my head (about critics insisting that having the gold plates today would settle everything), and applying it to critics who insist that "opening up the books" would settle everything, prove there's nothing to hide, etc. . . .

"It would do nothing of the sort. Having the plates (opening up the books) would settle nothing, and would be extremely disruptive. Scholars (critics) would endlessly squabble over what the plates (the "books") say."

[Heide]

The problem with this is two-fold: first and foremost, you should do your due-diligence before donating the money, not afterward.

Second, once the money has left your hand, you have no legal right to dictate how it is spent. It's not yours anymore.

Again, this is precisely backwards.

I agree with you completely. But here is the issue: how do you perform due diligence on a tax exempt organization if the books are closed? For a publicly held corporation, there are mandatory disclosure rules that are publicly filed so anyone can due their due diligence by reviewing the financial statements. For a privately held corporation, it can only solicit investments from qualified investors that must meet very specific requirement and a baseline wealth. Charitable organizations on the other hand can solicit money from everyone, rich or poor, educated or illiterate, without any duty to disclose their information. And to be clear, solicitations for donations are investments by other means. it is how charitable organizations raise capital because they are specifically prohibited from selling securities.

What is perplexing is that for publicly held corporations, the disclosure rules are there to prevent fraud. The qualified investor rule exists to prevent fraud to all except those presumed sophisticated enough to make risky investments with high return failure rates. Yet, we allow charitable organizations freedom to solicit without regulatory oversight from people over whom they they a position of trust, which position of trust creates a class of people susceptible of fraud.

To be clear, I am not talking about the Church, but rather charitable organizations generally.

[yootaw]

I agree with you completely. But here is the issue: how do you perform due diligence on a tax exempt organization if the books are closed?

I also agree. You indicated that you weren't talking about the church. For me, this is the key issue regarding donations to the church. The church does not provide the information that would allow for an informed decision regarding paying tithing (my opinion only -- I understand and respect that others donate more out of a principle of faith).

[selek1]

I agree with you completely. But here is the issue: how do you perform due diligence on a tax exempt organization if the books are closed? For a publicly held corporation, there are mandatory disclosure rules that are publicly filed so anyone can due their due diligence by reviewing the financial statements. For a privately held corporation, it can only solicit investments from qualified investors that must meet very specific requirement and a baseline wealth. Charitable organizations on the other hand can solicit money from everyone, rich or poor, educated or illiterate, without any duty to disclose their information. And to be clear, solicitations for donations are investments by other means. it is how charitable organizations raise capital because they are specifically prohibited from selling securities.

What is perplexing is that for publicly held corporations, the disclosure rules are there to prevent fraud. The qualified investor rule exists to prevent fraud to all except those presumed sophisticated enough to make risky investments with high return failure rates. Yet, we allow charitable organizations freedom to solicit without regulatory oversight from people over whom they they a position of trust, which position of trust creates a class of people susceptible of fraud.

To be clear, I am not talking about the Church, but rather charitable organizations generally.

As was pointed out before, charitable organizations are subject to government scrutiny in order to maintain their tax-exempt status.

Many are further audited by services which exist specifically to rate charitable organizations on their performance- items such as how much of the donated dollar actually reaches the intended recipient, how the money is spent, and various accounting practices.

In the case of the Church, the annual reports are audited by an independent firm which reviews the expenditures and ensures they are done in compliance with both the law and the Church's own guidelines.

Contrary to the myth, there is considerable, consistent, and detailed auditing and oversight of the Church's financial practices to ensure the funds are handled in a legal, responsible, and ethical fashion.

The question then becomes this: do you trust the auditors and the stewards? If not- why not?

In the last seven decades, there has not been a single credible allegation made that the Church's funds have been mishandled by anyone higher than a Stake President.

In the last seven decades, there has not been a single complaint or allegation made by any government agency regarding the Church's accounting practices.

Not one.

So- the watch dogs (both government and private) are satisfied. There have been no credible allegations of systemic problems or abuse.

So- what reasonable basis is left for suspicion- let alone for prurient allegation?

[Hawkmoon]

I'm glad to see that the same arguments from yesteryear are still being endlessly debated in this corner of the net... I must say I found it a bit tedious before, and expect little to change now. With that said-- I find this whole debate even more tedious than most. The concept is really quite simple:

If you believe the Gospel is true, and, by extension, the LDS Church-- there are zero issues. Why? Because tithing is not about whether the Church uses it in a way you deem appropriate, but rather it is about faith and obedience.

So, if you do NOT believe the Gospel is true, then, of course, you think it should be transparent so the Church can be exposed for what you believe it is... false.

In the end, it is rather simple-- if you believe then you will pay tithing without such strings attached. OTOH, If you must include strings-- then you probably shouldn't pay tithing. Of course, if you neither believe nor pay tithing then perhaps you should simply be quiet, and let others waste their money as they see fit?

Edited July 14, 2012 by Hawkmoon

[ERayR]

My personal opinion is that as a matter of broad public policy any tax exempt organization should make its financial reports public, including all churches. The reason is that people should be able to review charitable organizations to ensure that their donations are being properly used as represented. Because this is my personal preference, I believe the Church should do so as well. If tax exempt organizations desire to not release its financial records, then it may only do upon losing its tax exempt status.

Are you one who raises a hue and cry,about separation of church and state, when churches express their views on legislation involving moral issues? If so how can you justify the the above statement?

[Analytics]

So, if you do NOT believe the Gospel is true, then, of course, you think it should be transparent so the Church can be exposed for what you believe it is... false.

Few critics think that way, and you are totally missing the point. As a general principle, every church or organization that solicits donations from the public should provide their audited financial reports to anybody who asks. That is simply the right thing to do, irrespective of whether or not I or anybody else agrees or disagrees with the organization’s mission and how it goes about pursuing it.

Unitarian churches ought to disclose their financials to everybody who asks. Evangelical Churches ought to disclose their financials. NPR radio stations ought to. The United Way ought to. The Red Cross ought to. Harvesters Food Bank ought to. And the Mormon Church ought to.

I have no reason to believe that any of these organizations are doing anything unscrupulous with their money. But that doesn’t change the fact that like all organizations that ask for donations from the public, they ought to provided audited financial reports to anybody who asks, because doing is the right thing to do.

[tyler90az]

The books should be kept private for the following reasons:

• None of those clamoring for the "opening of the books" would tolerate or countenance the same level of prurient intrusion into their own affairs.
  

This reason for not opening the books irks me a little bit. Not that you said it or that I have not heard it from other people. The reason is that the statement released by the Church contradicts this. In the statement, it says the members are the Church, which is true. That does not jive well with the fact that people say they want to keep their information private. At the very least they should release more information to the members. Which if you are going to do that you might as well open the books completely.

[CASteinman]

This reason for not opening the books irks me a little bit. Not that you said it or that I have not heard it from other people. The reason is that the statement released by the Church contradicts this. In the statement, it says the members are the Church, which is true. That does not jive well with the fact that people say they want to keep their information private. At the very least they should release more information to the members. Which if you are going to do that you might as well open the books completely.

Why?

Why should members of the Church have access to this information?

It is not their stewardship to know such things and the law of Tithing does not give them any such rights.

So why?

[ERayR]

Few critics think that way, and you are totally missing the point. As a general principle, every church or organization that solicits donations from the public should provide their audited financial reports to anybody who asks. That is simply the right thing to do, irrespective of whether or not I or anybody else agrees or disagrees with the organization’s mission and how it goes about pursuing it.

Unitarian churches ought to disclose their financials to everybody who asks. Evangelical Churches ought to disclose their financials. NPR radio stations ought to. The United Way ought to. The Red Cross ought to. Harvesters Food Bank ought to. And the Mormon Church ought to.

I have no reason to believe that any of these organizations are doing anything unscrupulous with their money. But that doesn’t change the fact that like all organizations that ask for donations from the public, they ought to provided audited financial reports to anybody who asks, because doing is the right thing to do.

This is simply ridiculous. These organizations provide financial statements to the IRS and other regulatory agencies. They are often audited and if anything is wrong the regulatory agencies take care of the problems. When one donates to one of these organizations they "give" it to them. That is what charitable giving is. You relinquish claim. Charitable giving should be done when one agrees with the mission and purpose of the organization not because of a financial statement. If they are accomplishing their stated mission and you agree with that mission then give and get out of the way and let them operate. If you don't then just get out of the way.

[ERayR]

This reason for not opening the books irks me a little bit. Not that you said it or that I have not heard it from other people. The reason is that the statement released by the Church contradicts this. In the statement, it says the members are the Church, which is true. That does not jive well with the fact that people say they want to keep their information private. At the very least they should release more information to the members. Which if you are going to do that you might as well open the books completely.

This is simply ridiculous. These organizations provide financial statements to the IRS and other regulatory agencies. They are often audited and if anything is wrong the regulatory agencies take care of the problems. When one donates to one of these organizations they "give" it to them. That is what charitable giving is. You relinquish claim. Charitable giving should be done when one agrees with the mission and purpose of the organization not because of a financial statement. If they are accomplishing their stated mission and you agree with that mission then give and get out of the way and let them operate. If you don't then just get out of the way.

[tyler90az]

This is simply ridiculous. These organizations provide financial statements to the IRS and other regulatory agencies. They are often audited and if anything is wrong the regulatory agencies take care of the problems. When one donates to one of these organizations they "give" it to them. That is what charitable giving is. You relinquish claim. Charitable giving should be done when one agrees with the mission and purpose of the organization not because of a financial statement. If they are accomplishing their stated mission and you agree with that mission then give and get out of the way and let them operate. If you don't then just get out of the way.

If I looked at the Church as just an organization I donate to, then I understand that perspective.

I look at the Church as my life and something that could affect my family forever(if I choose). The peace of mind that would come from a financial statement would be invaluable. It would make me more willing to teach my children the gospel without reservations.

[ERayR]

If I looked at the Church as just an organization I donate to, then I understand that perspective.

I look at the Church as my life and something that could affect my family forever(if I choose). The peace of mind that would come from a financial statement would be invaluable. It would make me more willing to teach my children the gospel without reservations.

Pardon me but a financial statement is a poor reason to teach your children the gospel. The gospel should be taught to your children because you agree with its precepts and have received a personal witness from the Holy Ghost.

[tyler90az]

Pardon me but a financial statement is a poor reason to teach your children the gospel. The gospel should be taught to your children because you agree with its precepts and have received a personal witness from the Holy Ghost.

That does not jive well with what the church teaches. I have been told to study and think it out in my mind(etc.). That is actually a part of the Church I am grateful for. Without a financial statement I do not have all the pieces to study it out in mind.

[tyler90az]

That does not go well with what the church teaches. I have been told to study and think it out in my mind(etc.). That is actually a part of the Church I am grateful for. Without a financial statement I do not have all the pieces to study it out in mind.

[treehugger]

I think the books should be kept closed.

1. people will make the statement of Judas "couldn't the oil be sold and the money use to feed the poor". And as we are taught, it is not believed Judas had any real concern for the poor.

2. people will say "That is not what I gave tithing for".

All in all, there isn't much good to come of opening the books.

[ERayR]

That does not go well with what the church teaches. I have been told to study and think it out in my mind(etc.). That is actually a part of the Church I am grateful for. Without a financial statement I do not have all the pieces to study it out in mind.

Out of curiosity what will a financial statement tell you about the truthfulness of the gospel of Jesus Christ.

[tyler90az]

Out of curiosity what will a financial statement tell you about the truthfulness of the gospel of Jesus Christ.

It just looks really bad when the finances are not released. Like I stated earlier, it looks like they are hiding something to people. I don't believe anything is wrong with the finances so it would show me nothing. It would just give me peace of mind regarding the Church. Similar to how a security system would give me peace of mind, even know it is not necessary.

Knowledge>belief

[yootaw]

As soon as I start soliciting donations, then my finances relative to the donations ought to become public, or at least available to those who donate. Until then, my finances ought to remain private. This seems like a clear difference between personal finances and church finances. I don't think we need to know all of the details, but more than just "trust us". Even if the trust is fully deserved.