Public financial benefits should imply public financial disclosure for non-profit entities. Agree or disagree?

[Kenngo1969]

I'm inclined to agree with you, Amulek, not because I have any particular savvy when it comes to accounting or finance or anything like that, but, I've been on the board of directors of a non-profit and on an advisory board for a government agency.  Here's the thing when it comes to disclosure: All the disclosure in the world isn't going to change the fact that a person doesn't know what he doesn't know.  He may say, Well, yes, based on what I see here, it appears that things are going well, that this organization is being well-managed, or whatever have you, but rarely, if ever is it what a person or an entity charged with oversight sees that's the problem; it's that he doesn't know what he doesn't know.

[RevTestament]

1 hour ago, Freedom said:

What is the source of this ethic? You are suggesting that there is a predetermined standard that the church is somehow compelled to follow but is not. Is there some link you could provide?

The source is majority agreement. That is how most ethics in private entities are established. So no, it is not "predetermined." If the majority vote for it, the entity is bound by it. I'm not sure if that has a legal leg to stand on though, as the Church is organized as a corporate sole.

[Storm Rider]

On ‎10‎/‎19‎/‎2017 at 11:25 AM, Five Solas said:

Non-profit entities including churches get to use public services (e.g., roads, police, fire protection) without fully paying for them (because they pay less taxes, generally speaking).  That means they enjoy a benefit at the general public’s expense. 

Since they receive a public financial benefit, do they not have some ethical (if not legal) obligation to disclose something about themselves back to the public?  It could look something like this (published by my church, jump to page 23 for the financial disclosures): http://www.downtowncornerstone.org/prospectus

In the UK, such disclosure is a legal requirement.  The LDS Church must disclose (perhaps to the chagrin of some LDS).  I suspect eventually that will be the case in the US.  But between here and there, don’t you think such information should be disclosed voluntarily? 

For the sake of this poll, let’s say “basic financial information” consists of two numbers: Gross Revenue and Gross Assets.  No individual salary information, nothing that would compromise personal privacy—just two numbers, that’s it.

If not, why not?

--Erik

PS.  And please don’t say “because the critics will never be satisfied”—that’s a pretty lame excuse and in any event, I doubt critics are the ones driving policy in the CoB.  Slippery-slope arguments are pretty lame too. 

;0)

_________________________________________________________

For there is nothing hidden that will not be disclosed,
and nothing concealed that will not be known
or brought out into the open.

--Luke 8:17

Nope, don't agree with your position in any degree.  I can see where State sponsored churches may have a responsibility to disclose financial information. However, we don't have state sponsored religions of any kind in the US. 

More importantly, our nation, up until the present, has recognized churches as having a social benefit to the nation. In this capacity they benefit the entire society regardless if one attends a specific church or not - we benefit as a result of a more civil society.  I recognize that today's brainwashed youth do not see any benefit of any form of organized religion. However, I hope in time even the most dim-witted will awaken to what is most often staring them in the face as they continue to blindly, with open eyes, evaluate the actual meaning of a social good. 

Jack Weinberg almost had it right; it just needed to be reversed:  Don't trust anyone under the age of 30 - it rings true today. This is the group that demands free speech....as long as what you say is something they agree with in total. This is the same group that belittles, violently, anyone that dares to have thoughts that do not measure up to their vaunted superior moral standards.  They are also the same group that has no understanding of history - unless it has been revised to meet their standards - and is ready to crucify anyone that dares talk about actual history. 

Well now; that is my soapbox discussion for today.  Run along little children and resist any influence to drag you about by your nose. It is time to think, listen, evaluate all on your own.

[Five Solas]

On 10/19/2017 at 11:30 AM, Jane_Doe said:

Providing a public service == the public has a right to dig through every inch of your finances?    NO!

For all those Americans complaining about a non-profit not having transparent books, may I suggest that you're missing complaining about the real elephant in the room (the lack of transparency in US government finances).  

Actually, your government is very transparent, Jane_Doe, and at all levels (federal, state, local).  The problem, as another poster (Stargazer) wrote, is complexity.  We're talking about 300+ million people here--so yeah, it doesn't lend itself to a spreadsheet very well. 

And now, I'm going to make a shameless plug--for something I think is really cool.  Former Microsoft CEO, Steve Ballmer, has founded his own non-profit, The Ballmer Group, with the intention of making the abundance of government data accessible, navigable, aggregatable, and filterable--for analysis.  USAFacts.org was released earlier this year, and is worth at least a few minutes of your time.  It's also a bit of a showcase for the latest Microsoft analytics technology, "Power BI."  Self serving? (Ballmer is still the largest shareholder.)  Okay, maybe a little.  But it's still really cool.  

Perhaps this will even change your point of view (and many others who lack trust in their public institutions & suppose the same as you).  In which case, Ballmer will have done our society a real service.   

:0)

--Erik

[Pete Ahlstrom]

I think it's a no-brainer to require meaningful financial disclosure of churches and charities that get tax breaks

[Amulek]

Why? That isn't the norm for any institution in our country aside from publicly traded companies. Requiring publicly traded companies to provide financial statements is understandable because these companies are seeking public investment though public markets, and shareholders have a right to be informed.

But we don't make private for-profit companies disclose anything publicly, or pretty much anyone else either. I don't see why churches ought to be treated any differently.

[Freedom]

On 10/20/2017 at 6:05 PM, RevTestament said:

The source is majority agreement. That is how most ethics in private entities are established. So no, it is not "predetermined." If the majority vote for it, the entity is bound by it. I'm not sure if that has a legal leg to stand on though, as the Church is organized as a corporate sole.

In other words, there is such ethic so this entire thread is moot. 

[Pete Ahlstrom]

2 hours ago, Amulek said:

Why? That isn't the norm for any institution in our country aside from publicly traded companies. Requiring publicly traded companies to provide financial statements is understandable because these companies are seeking public investment though public markets, and shareholders have a right to be informed.

But we don't make private for-profit companies disclose anything publicly, or pretty much anyone else either. I don't see why churches ought to be treated any differently.

Then shouldn't the public benefit of a tax break be taken away? Isn't this the distinction? Private for profit companies don't usually live off of public largess like non-profits and churches do. How much do you think the mormon church saves each year by not having to pay taxes? 

[RevTestament]

10 hours ago, Freedom said:

In other words, there is such ethic so this entire thread is moot. 

?? Um, no. A corporate sole is essentially used by non-profit religious organizations. There is one office holder and shareholder - no board of directors, etc. Assuming the Church is still organized like this, there is no fiduciary ethics involved from a legal standpoint. The sole is not bound by any laws other than general laws. The sole does not have to do anything other than file a tax return really. He does not have any duty to report revenue, expenditures, income/loss, or other financial info other than to the IRS. While the Church may vote for such disclosure, I believe there is no law which would require it even if so desired by the Church body. Nevertheless, as a general societal expectation, I think a Church vote would create a perceived requirement of disclosure. Hopefully, that clears it up for you. However, the Church does have other entities which are for profit. I don't know how they are organized.

[Sleeper Cell]

10 hours ago, Pete Ahlstrom said:

Then shouldn't the public benefit of a tax break be taken away? Isn't this the distinction? Private for profit companies don't usually live off of public largess like non-profits and churches do. How much do you think the mormon church saves each year by not having to pay taxes? 

The OP specifically mentioned police and fire services among the public benefits that churches receive without “fully paying for them.“  Do you really consider providing such vital emergency services to be some sort of governmental “largess?”   

As for the roads (the OP’s other example), a major source of funding comes from the taxes on gasoline (which, in my experience, are included in the price per gallon, with no special treatment for anyone).  For that matter, doesn’t virtually all the “church use” of  the roads consist of members (who are already fully taxed for their use of the roads)  driving to and from church? 

That said, I would not object to a “benefits assessment district” roads tax (which would be applicable to all property owners, including churches).   Such districts are (at least in theory) intended to tax each property owner differently, according to the benefit that property owner actually receives from the roads.  But I would object to a tax that would be imposed on some churches and not on others, based on their willingness to give up some of their rights.  

  

 

[Amulek]

17 hours ago, Pete Ahlstrom said:

Then shouldn't the public benefit of a tax break be taken away? Isn't this the distinction? Private for profit companies don't usually live off of public largess like non-profits and churches do.

The two types of entities operate under completely different paradigms. The primary reason for profit companies exist is to earn a profit for the owners of the company. Whereas nonprofit organizations (including churches) are formed for the common good of the public.

Why should the pubic want to tax an organization which is already trying to help the public to begin with? Because we think the government would be more efficient at distributing aid to communities than the organizations that exist in those very communities? Hardly. Taxing those groups would only undermine their ability to fulfill the mission they were created to accomplish. 

Plus, the idea of taxing nonprofits is just a complete non-starter, politically. You would be shutting down local women's shelters, soup kitchens, etc. all across the country if nonprofits were required to pay taxes. And that's assuming (quite generously) that you are able to get around the constitutional problems with regulating churches to begin with. 

 

Quote

How much do you think the mormon church saves each year by not having to pay taxes? 

No idea. We could probably make pretty good estimates about things like property taxes (assuming, for the sake of argument that we discount things like depreciation, operating costs, etc.), but how would you go about handling corporate income tax for a church? Seriously. That is not a trivial question, and it's one that doesn't have an obvious answer, yet it is invariably the sort of thing that people calling for taxation on nonprofits haven't even begun to think about. 

Edited October 22, 2017 by Amulek

[thesometimesaint]

11 hours ago, Pete Ahlstrom said:

Then shouldn't the public benefit of a tax break be taken away? Isn't this the distinction? Private for profit companies don't usually live off of public largess like non-profits and churches do. How much do you think the mormon church saves each year by not having to pay taxes? 

You've never heard of corporate welfare?  No idea. But the Church does pay taxes on its profit making businesses.

[Pete Ahlstrom]

21 minutes ago, Sleeper Cell said:

The OP specifically mentioned police and fire services among the public benefits that churches receive without “fully paying for them.“  Do you really consider providing such vital emergency services to be some sort of governmental “largess?”   

As for the roads (the OP’s other example), a major source of funding comes from the taxes on gasoline (which, in my experience, are included in the price per gallon, with no special treatment for anyone).  For that matter, doesn’t virtually all the “church use” of  the roads consist of members (who are already fully taxed for their use of the roads)  driving to and from church? 

That said, I would not object to a “benefits assessment district” roads tax (which would be applicable to all property owners, including churches).   Such districts are (at least in theory) intended to tax each property owner differently, according to the benefit that property owner actually receives from the roads.  But I would object to a tax that would be imposed on some churches and not on others, based on their willingness to give up some of their rights.  

  

 

Why should a church be tax exempt then?  Isn't it because the church supposedly gives the public a benefit and the public is simply paying for that benefit in the form of no taxes from the church?  Shouldn't the public then be able to verify that the benefit to the public is actually being met?  Should a conservative church be allowed to hoard money?  Or should that tax exempt church be required to justify the hoarding in exchange for getting the tax break?

[Pete Ahlstrom]

6 minutes ago, thesometimesaint said:

You've never heard of corporate welfare?  No idea. But the Church does pay taxes on its profit making businesses.

Yes, but would that tax burden be higher if it wasn't able to use the tax exempt entity?  We don't know due to non-disclosure.  As for corporate welfare, that should be eliminated except in a few circumstances where a fledgling industry needs time to grow, etc.

[Pete Ahlstrom]

20 minutes ago, Amulek said:

The two types of entities operate under completely different paradigms. The primary reason for profit companies exist is to earn a profit for the owners of the company. Whereas nonprofit organizations (including churches) are formed for the common good of the public.

Why should the pubic want to tax an organization which is already trying to help the public to begin with? Because we think the government would be more efficient at distributing aid to communities than the organizations that exist in those very communities? Hardly. Taxing those groups would only undermine their ability to fulfill the mission they were created for to accomplish. 

Plus, the idea of taxing nonprofits is just a complete non-starter, politically. You would be shutting down local women's shelters, soup kitchens, etc. all across the country if nonprofits were required to pay taxes. And that's assuming (quite generously) that you are able to get around the constitutional problems with regulating churches to begin with. 

 

No idea. We could probably make pretty good estimates about things like property taxes (assuming, for the sake of argument that we discount things like depreciation, operating costs, etc.), but how would you go about handling corporate income tax for a church? Seriously. That is not a trivial question, and it's one that doesn't have an obvious answer, yet it is invariably the sort of thing that people calling for taxation on nonprofits haven't even begun to think about. 

How about we see what the church is doing finance-wise first and then perhaps the taxation issue will be easy to solve?  Perhaps it isn't a taxation issue at all?  Maybe the church doesn't need 10% from its members because it has stock-piled billions over the last 30 years and has no plan on how to use the money to benefit society other than to continue to hoard?

[Kenngo1969]

17 hours ago, Pete Ahlstrom said:

I think it's a no-brainer to require meaningful financial disclosure of churches and charities that get tax breaks

Erik and Mr. Ahlstrom:

It seems to me that, by the standard in play here, apparently, any person or organization which benefits from public works such as roads, public buildings, sewers, and so on, is bound to disclose that person's or that organization's finances.

Yes, I benefit from public works.  No, that does not mean that my tax returns are any of your business.

Thanks,

-Ken

P.S.: Smac97 made the same point earlier in the thread.  Your silence seems telling.

Edited October 22, 2017 by Kenngo1969

[bluebell]

Except as it applies to following the law, I don't see how financial transparency (or not) has moral implications either way.    

[Kenngo1969]

14 hours ago, Pete Ahlstrom said:

Then shouldn't the public benefit of a tax break be taken away? Isn't this the distinction? Private for profit companies don't usually live off of public largess like non-profits and churches do. ...

Arguably (while I recognize that whether the benefit provided by any given non-profit is commensurate with the tax relief it receives is certainly arguable) since what churches and non-profits do already benefits the public, essentially, taxing such entities would be the equivalent of double-taxation.  In any event, the more money churches and other non-profits pay in taxes, the less they can devote to their publicly-beneficial missions.

[Freedom]

5 hours ago, RevTestament said:

?? Um, no. A corporate sole is essentially used by non-profit religious organizations. There is one office holder and shareholder - no board of directors, etc. Assuming the Church is still organized like this, there is no fiduciary ethics involved from a legal standpoint. The sole is not bound by any laws other than general laws. The sole does not have to do anything other than file a tax return really. He does not have any duty to report revenue, expenditures, income/loss, or other financial info other than to the IRS. While the Church may vote for such disclosure, I believe there is no law which would require it even if so desired by the Church body. Nevertheless, as a general societal expectation, I think a Church vote would create a perceived requirement of disclosure. Hopefully, that clears it up for you. However, the Church does have other entities which are for profit. I don't know how they are organized.

You said that the source of the ethics is majority agreement. since there is no majority agreement that disclosure is required, there is no ethical duty. Yes, there could be a vote, but until a vote is held, there is no ethical duty. 

[Five Solas]

3 hours ago, Kenngo1969 said:

Erik and Mr. Ahlstrom:

It seems to me that, by the standard in play here, apparently, any person or organization which benefits from public works such as roads, public buildings, sewers, and so on, is bound to disclose that person's or that organization's finances.

Yes, I benefit from public works.  No, that does not mean that my tax returns are any of your business.

Thanks,

-Ken

P.S.: Smac97 made the same point earlier in the thread.  Your silence seems telling.

At least a couple of you are endeavoring to tie any non-profit disclosure with individual disclosure.  But this thread isn't about individual disclosure, and I'm actually a strong advocate for individual privacy.  I personally think President Trump (not to be political, I'm just picking a well-known illustrative example) is fully entitled to keep his returns to himself and I would not favor legislation mandating otherwise.  Likewise, I wouldn't support someone on public assistance being required to make personal public disclosures. 

There's no "slippery slope" (as I cautioned in my OP) to be argued here.  One does not follow the other--much like private company disclosure doesn't follow public company disclosure requirements in the for-profit world. 

So please stay focused on the topic and give that specious argument a rest.   

--Erik

[Five Solas]

6 hours ago, Amulek said:

... The primary reason for profit companies exist is to earn a profit for the owners of the company. Whereas nonprofit organizations (including churches) are formed for the common good of the public.  ...

Then doesn't the public have a right to know at least something about organizations formed for their "common good"--organizations that the public effectively subsidizes with their own taxes (e.g., paying for the fire station, its personnel & equipment kept online 24/7--in case the church building should ever have the need). 

By what logic is the citizenry to be kept completely in the dark, Amulek?  Do you (or others here) imagine disclosure requirements in the UK have killed off non-profit and religious organizations in that country? 

--Erik 

[Amulek]

6 hours ago, Pete Ahlstrom said:

How about we see what the church is doing finance-wise first and then perhaps the taxation issue will be easy to solve? 

Says the guy who, clearly, has never even looked at a corporate tax return.

 

Quote

Perhaps it isn't a taxation issue at all? 

Huh?

 

Quote

Maybe the church doesn't need 10% from its members because it has stock-piled billions over the last 30 years and has no plan on how to use the money to benefit society other than to continue to hoard?

Of course! That's why President Monson wan't at Conference. He was too busy hanging out with his buddy:

 

Edited October 22, 2017 by Amulek
Fixed typo

[Amulek]

2 hours ago, Five Solas said:

Then doesn't the public have a right to know at least something about organizations formed for their "common good"--organizations that the public effectively subsidizes with their own taxes (e.g., paying for the fire station, its personnel & equipment kept online 24/7--in case the church building should ever have the need). 

Well, fires have this tendency to not extinguish themselves once they have finished burning down a church, so it kind of makes sense for a city to have a fire department which covers the entire municipality - even if there happen to be some individuals who aren't paying taxes. And again, I don't really think it makes sense to talk about these sorts of services as being a subsidy. Congregants are typically members of the community; they are paying taxes for civil services like fire and police already. Why should they pay for them twice? 

If that's really what bothers you though, you can take it up with your government representatives. In some jurisdictions, fire taxes are based purely on square footage, and apply to all property owners. It would possible to make a neutral law that would cover churches and other nonprofits if there was the political will to do so. As I mentioned before though, I think that in most places that is going to be a non-starter. Once your local battered women's shelter starts telling the media about how many mothers they had to turn away because the city started charging them all these new service fees, the desire to make that happen is going to evaporate. 

 

Quote

By what logic is the citizenry to be kept completely in the dark, Amulek?  Do you (or others here) imagine disclosure requirements in the UK have killed off non-profit and religious organizations in that country? 

The logic is that there is no compelling need for the public to know about a church's finances. Church's aren't seeking public investment through publicly regulated markets. They are completely voluntary organizations. If you don't like a church's level of transparency then there is a simple solution to your discomfort - don't be a member of that church. 

 

Edited October 23, 2017 by Amulek
Spelling

[Tacenda]

On 10/21/2017 at 7:40 PM, Pete Ahlstrom said:

I think it's a no-brainer to require meaningful financial disclosure of churches and charities that get tax breaks

I agree, and I believe Pres. Hinckley told a reporter that it's members do know the financial disclosures, or maybe he just stated that it belongs to those that made the contribution but didn't mention that they actually have no information.

President Hinckley: "WELL, WE SIMPLY THINK THAT THE…THAT INFORMATION BELONGS TO THOSE WHO MADE THE CONTRIBUTION, AND NOT TO THE WORLD. THAT'S THE ONLY THING. YES."

. 

 

 

 

[clarkgoble]

Arguably the non-profits are paid for by individuals who did pay taxes thus paying for the roads.  I can see wanting to distinguish between classes of non-profits, thus avoiding companies that are set up just to pay large salaries to people. But ideally they exist as a way for individuals to pool resources after they've paid taxes. Now I can see wanting to exclude charitable donations as an exemption. However honestly most people just take the default exemption anyway so they don't itemize charitable donations.