Dan Peterson's Series on Church Finances and "Transparency"

[pogi]

27 minutes ago, smac97 said:

For my part, I don't object to such verbalizations per se.  Instead, my reservations usually pertain to the time, place, and manner of such verbalizations.  Some are reasoned and constrained and civil.  Some are defamatory, accusatory, and intended to be coercive and to foment ill will against the Church, and to injure its reputation.

Again: Time, place and manner matter.  Motives and intent matter.  

I have no qualms with speaking civilly and in good faith about such things.

100% agree.

27 minutes ago, smac97 said:

Scott wasn't "accusing" anyone.  He was simply saying that he would not.

I think Scott may be concerned about calls for transparency that are presented in bad faith, or which are intended to be coercive, or which are otherwise inappropriate in the time, place and/or manner of their presentation.

Thanks,

-Smac

For my part, all I have said in this thread and the last one discussing this topic is that "knowing how progressive President Nelson has been, I wouldn't be surprised to see more financial transparency at some point in his presidency."  I have explained why I like the idea of transparency and why I think it would be a good idea.  I have not presented anything in "bad faith" or which was "intended to be coercive or otherwise inappropriate in time, place, or manner", yet Scott is obviously concerned about what I have said and is actively coming after me for it... 

[stemelbow]

1 hour ago, CV75 said:

D&C 78 is all about setting up temporal systems in the Church by covenant so “that the church may stand independent above all other creatures beneath the celestial world; That you may come up unto the crown prepared for you, and be made rulers over many kingdoms, saith the Lord God, the Holy One of Zion…”

Do you mean to say this little passage means the Church should be financially independent?  When I read it in context it appears it is saying the Church is independent above all others beneath the celestial world, but not financially.  

I mean, whatever works for you.  That's fine.  I don't care if D&C says anything beyond the notion that the Church should start a store to make money in Missouri.  It's true, though, early on Joseph had in mind a desire to make some profits and that doing so would be a good way to build up the Church.  

1 hour ago, CV75 said:

 

This independence requires, in addition to faith, material sacrifice and consecration (“donations”) of the faithful, self-reliant members of the Church who are both stewards over and beneficiaries of worldly business matters well beyond the Church’s.

 

Who is DavidB?

 

I am.  I just said I am.  Ah well...Let's see so the Church has said its financially independent, meaning it can do all it needs to do with the wealth it has amassed, with it's many business interests and investments.  THat means there is no need for the Church to take in the purported billions each year in tithing--unless of course the goal is for the Church to become even more corporate.  Checking, even though estimates seem low, the Church ranks richer than most countries in the world.  I wonder if at it's current trajectory and all the donations it takes in how far up that list it'll climb.  

[smac97]

5 minutes ago, pogi said:

For my part, all I have said in this thread and the last one discussing this topic is that "knowing how progressive President Nelson has been, I wouldn't be surprised to see more financial transparency at some point in his presidency."  I have explained why I like the idea of transparency and why I think it would be a good idea.  I have not presented anything in "bad faith" or which was "intended to be coercive or otherwise inappropriate in time, place, or manner", yet Scott is obviously concerned about what I have said and is actively coming after me for it... 

Okay.  Seems like you and Scott are both good guys.  I'll let you two hash things out.

I continue to be unclear about what "transparency" means.  It seems like an almost infinitely elastic term.

Thanks,

-Smac

[smac97]

23 minutes ago, rockpond said:

He reaches this conclusion at the end of Part Three:  "When the Church of Jesus Christ of Latter-day Saints invests money that has come into its possession, it isn’t really spending it.  It’s storing those funds for future use."

I differ slightly with him here.  I don't see investing in commercial real estate as storing funds for future use.  The word "storing" to me sounds like you are placing the money somewhere and when you need it you'll go grab it and use it.

Well, yes.  Money invested in real estate is, in essence, "stored."  Real estate isn't going anywhere.  And if the investments are wise, then the money invested in real estate yields a return in the form of increasing land prices (and rents, and production (crops, cattle, etc.)).

This article does a fair job summarizing this concept (and juxtaposes it with "storing" money by depositing it in a bank account):

Quote

Like many charitable groups or scholarship funds, the Church prefers to invest its cash and run operations off generated interest. It’s a good way to run things when you want to be conservative (small c) with your operations and more or less guarantee a set amount of money to keep things going every year.

So how do you invest that money? Well, you could buy real estate, you could invest in stocks and bonds, or you could put the money in the bank. Each one of those has a downside (real estate market could crash, company could be caught up in a scandal or release a caffeinated drink, etc.). The safest, of course, is a bank, but the funds are only insured up to $250,000, and they don’t pay very much in interest (a little over a percent right now).

And what will the bank do with the money? Invest it in real estate and stocks and bonds, taking a large percentage of the interest generated for their time and efforts.

Why not invest the money yourself, which removes the bank’s portion, giving you more to help with your goals? That’s basically what the Church did with the City Creek Mall, with the added bonus of giving them control over the downtown area. Plus helping generate jobs for those hired by the mall isn’t a bad benefit, either.

Thoughts?

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I think it would have been more accurate for Peterson to have said that they are "growing it for future use".  More specifically, they are investing in long-term assets that will produce income over many years while also (hopefully) growing the principal as well.

Which, if true (and I think it is), is superior to merely "storing" money (such as in a bank account).  Right?

Quote

The Church is always receiving more tithing money - it has a fairly steady, reliable source of revenue.  But, I agree with him that it would be extremely foolish for church leaders to not keep healthy reserves in place.

Yes.  Moreover, the Church's utilization of tithes is segregated from the use of revenues from for-profit ventures.  That is, the latter could be used for just about anything, but use of the the former (which are sacred funds) has more constraints, I think.  

Quote

Quote

Times of economic downturn, when unusual strains will be placed upon Church resources, will be precisely the times when tithing and other voluntary donations will also decline and when saved reserves will be of most urgent value.

The problem I see with this statement is that when it comes to commercial real estate (Peterson has been referring to the City Creek investment), those "reserves" will not be readily accessible during an economic downtown. 

But they will likely be existing, yes?  Perhaps the focus is more on preserving and cautiously growing the capital, rather than spending ("access{ing} it").  Hence the above-article's statement: "Like many charitable groups or scholarship funds, the Church prefers to invest its cash and run operations off generated interest. It’s a good way to run things when you want to be conservative (small c) with your operations and more or less guarantee a set amount of money to keep things going every year."

Quote

And the income from those assets will decrease for the same reason that tithing and voluntary donations decrease. 

Yes, but then they'll rebound when the economy improves.  The money "stored" in real estate investments will have weathered the storm.

Quote

If the US were to have a serious recession, Church owned properties like the South Loop apartment tower in Chicago, CityLine in Texas, 111 Main and City Creek in SLC would be likely to see occupancy and lease rates drop.  Finding buyers for those properties during a recession could also prove difficult.

But are these properties being financed?  Or are they owned outright?  If owned outright, then the urgency of "finding buyers ... during a recession" lessens.  The Church doesn't have monthly mortgage obligations to meet, and hence can afford to wait until the recession ends and buyers become more available.

Thanks,

-Smac

Edited December 12, 2019 by smac97

[rockpond]

5 minutes ago, smac97 said:

Well, yes.  Money invested in real estate is, in essence, "stored."  Real estate isn't going anywhere.  And if the investments are wise, then the money invested in real estate yields a return in the form of increasing land prices (and rents, and production (crops, cattle, etc.)).

Yes.  And I went on, in my comments, to make that point.

5 minutes ago, smac97 said:

This article does a fair job summarizing this concept (and juxtaposes it with "storing" money by depositing it in a bank account):

Thoughts?

I agree.  I thought my comments made it clear that I think there is wisdom in investing and then operating off interest while preserving capital.

5 minutes ago, smac97 said:

Which, if true (and I think it is), is superior to merely "storing" money (such as in a bank account).  Right?

As has been pointed out already, you can't (or shouldn't) store the amount of funds the church has in a bank account... at least not over the long term.  Some form of investment needs to be done.  Whether any particular investment is superior to having just parked the funds in bonds (for example) is something that we'd need more data to discern.

5 minutes ago, smac97 said:

Yes.  Moreover, the Church's utilization of tithes is segregated from the use of revenues from for-profit ventures.  That is, the latter could be used for just about anything, but use of the the former (which are sacred funds) has more constraints, I think.

For me, any profit gained from investments that had their origin in sacred funds remains sacred.  So, for the most part, I do not distinguish between money the church has as a direct result of tithes and offerings vs money coming from for-profit ventures.

5 minutes ago, smac97 said:

But they will likely be existing, yes?  Perhaps the focus is more on preserving and cautiously growing the capital, rather than spending ("access{ing} it").  Hence the above-article's statement: "Like many charitable groups or scholarship funds, the Church prefers to invest its cash and run operations off generated interest. It’s a good way to run things when you want to be conservative (small c) with your operations and more or less guarantee a set amount of money to keep things going every year."

They will be existing but during a recession will likely produce less income.

5 minutes ago, smac97 said:

Yes, but then they'll rebound when the economy improves.  The money "stored" in real estate investments will have weathered the storm.

Ideally, yes.  But there are no guarantees.  Maintenance and property taxes don't go away during recessions.

5 minutes ago, smac97 said:

But are these properties being financed?  Or are they owned outright?  If owned outright, then the urgency of "finding buyers ... during a recession" lessens.  The Church doesn't have monthly mortgage obligations to meet, and hence can afford to wait until the recession ends and buyers become more available.

We're told that the church does not go into debt.  I assume, but don't know, that this applies to the activities of Property Reserve and other for-profit institutions controlled by the Church.  But let's assume that the properties are owned outright with no mortgage obligations to meet.  My point was not that the Church was at risk of losing the properties to foreclosure.  My point was that the capital invested in a commercial property is not "stored" and accessible during times of economic downtown (as I understood Peterson to be suggesting).

In short:

• The Church investing in real estate and operating from that investment income is great, in my view.
• The Church relying on the capital invested in properties during times of recession is not a good idea.*

*To be clear, I do not think that Church leaders are relying on pulling capital out of real estate during a downtown but it seems to be how Peterson is presenting it, IMO.

[Calm]

20 minutes ago, smac97 said:

But are these properties being financed?  Or are they owned outright?  If owned outright, then the urgency of "finding buyers ... during a recession" lessens.  The Church doesn't have monthly mortgage obligations to meet, and hence can afford to wait until the recession ends and buyers become more available.

And they can then have the option use more accessible funds during a recession because postrecession they can, if necessary, replace the expended funds with the real estate investments.  They won't be fearful of the recession placing them in financial distress in the future if they use any funds to help others or even just continue the current missions/projects of the Church.

[rockpond]

4 minutes ago, Calm said:

And they can then have the option use more accessible funds during a recession because postrecession they can, if necessary, replace the expended funds with the real estate investments.  They won't be fearful of the recession placing them in financial distress in the future if they use any funds to help others or even just continue the current missions/projects of the Church.

I fully agree with this.  But Peterson didn't present it that way.  Maybe he is trying to keep it really simple but I think he isn't properly presenting the Church's position on this as I can't imagine that those who have been hired by Church leaders to oversee investments are thinking that capital parked in commercial property will be accessible during times of economic downturn.  That said, I want to be clear that I am not disagreeing with the Church investing in real estate, I just disagree with part of the "why" given by Peterson.

[CV75]

56 minutes ago, stemelbow said:

Do you mean to say this little passage means the Church should be financially independent?  When I read it in context it appears it is saying the Church is independent above all others beneath the celestial world, but not financially.  

I mean, whatever works for you.  That's fine.  I don't care if D&C says anything beyond the notion that the Church should start a store to make money in Missouri.  It's true, though, early on Joseph had in mind a desire to make some profits and that doing so would be a good way to build up the Church.  

I am.  I just said I am.  Ah well...Let's see so the Church has said its financially independent, meaning it can do all it needs to do with the wealth it has amassed, with it's many business interests and investments.  THat means there is no need for the Church to take in the purported billions each year in tithing--unless of course the goal is for the Church to become even more corporate.  Checking, even though estimates seem low, the Church ranks richer than most countries in the world.  I wonder if at it's current trajectory and all the donations it takes in how far up that list it'll climb.  

The Church has not said it is financially independent. The verse says, “the church may stand independent.” Repeating your argument from a standpoint of misapprehension doesn’t address that. I recommend consulting an Institute Manual if more instruction and perspective is desired.

Yes, the Church has quite a large “storehouse” which expands as the stone rolls forth to become a great mountain and fill the whole earth. Do you also believe Daniel was a megalomaniac?

What full name does DavidB stand for? That is rhetorical; I only ask to demonstrate that either a) double standards for transparency are typically one-sided and biased, or b) transparency can have its reasonable good-faith limits.

[CV75]

54 minutes ago, smac97 said:

Okay.  Seems like you and Scott are both good guys.  I'll let you two hash things out.

I continue to be unclear about what "transparency" means.  It seems like an almost infinitely elastic term.

I think that is because it is part of the intersection of political-financial dialogue, whether that be in expressing confidence and trust in terms of votes or investment. I take D&C 78 to describe more of a covenant-financial relationship, so this is where the Church is coming from. Some approach Church covenants like they do their politics (and I use that term broadly, where the governance they seek to influence according to their ambition can relate to familial, community, company, governmental or other entities).

[smac97]

34 minutes ago, rockpond said:

For me, any profit gained from investments that had their origin in sacred funds remains sacred.  So, for the most part, I do not distinguish between money the church has as a direct result of tithes and offerings vs money coming from for-profit ventures.

I think the Church, however, does make that distinction.  

Sounds like we largely agree with DCP.

Thanks,

-Smac

[rockpond]

33 minutes ago, smac97 said:

I think the Church, however, does make that distinction.

If they could show that the funds used to enter into the investments did not arise from the faithful sacrifice of members, I might agree with them. 

Quote

Sounds like we largely agree with DCP.

I’ve outlined the few minor points where I disagree with how he has described things.  But aside from that I agree so far.  I am going to continue reading the remaining parts and will share my thoughts here. 

Edited December 12, 2019 by rockpond

[stemelbow]

56 minutes ago, CV75 said:

The Church has not said it is financially independent. The verse says, “the church may stand independent.” Repeating your argument from a standpoint of misapprehension doesn’t address that. I recommend consulting an Institute Manual if more instruction and perspective is desired.

Sure it does.  See here

This article describes the history of how it achieved financial independence.  

56 minutes ago, CV75 said:

 

Yes, the Church has quite a large “storehouse” which expands as the stone rolls forth to become a great mountain and fill the whole earth. Do you also believe Daniel was a megalomaniac?

huh?  I"m not sure what you're asking me, or why or what megalomaniac has to do wtih it.  

56 minutes ago, CV75 said:

 

What full name does DavidB stand for? That is rhetorical; I only ask to demonstrate that either a) double standards for transparency are typically one-sided and biased, or b) transparency can have its reasonable good-faith limits.

 

I've said exactly nothing about transparency.  

[CV75]

44 minutes ago, stemelbow said:

Sure it does.  See here

This article describes the history of how it achieved financial independence.

I see what you mean. Part of the formula to remain financially independent is to continue receiving donations; in that way she is still dependent on the faith of the members (as pointed out in several places in the article).

huh?  I"m not sure what you're asking me, or why or what megalomaniac has to do wtih it.  

From the last paragraph of this article: "Those who attempt to define the Church as an institution devoted to amassing monetary wealth miss the entire point..."

I've said exactly nothing about transparency.

Except that part about "full disclosure..." As has been pointed out, "transparency" seems like an almost infinitely elastic term.

 

[stemelbow]

32 minutes ago, CV75 said:

I see what you mean. Part of the formula to remain financially independent is to continue receiving donations; in that way she is still dependent on the faith of the members (as pointed out in several places in the article).

Come again?  The Church is financially independent because it depends on the billions it takes in each year from tithing?  I mean whatever floats boats and all of that.  The term has some murkiness to it, you'll find many define it differently anyway.  I just thought the notion funny--"we're financially independent.  We can operate at our current pace, building and all of that without taking in donations.  But we need donations."  That's more of what it came off as to me. 

Quote

From the last paragraph of this article: "Those who attempt to define the Church as an institution devoted to amassing monetary wealth miss the entire point..."

It is interesting.  The Church being a lucrative corporation with tons of wealth and power, is no different than any other large corporation on this front, it seems to me.  If you think Amazon is only about amassing wealth you miss the entire point.  Indeed go read the very mission statements that drive them.  

For instance:

Quote

Our vision is to be earth's most customer-centric company; to build a place where people can come to find and discover anything they might want to buy online.

https://www.thebalancesmb.com/amazon-mission-statement-4068548

Any corporation out there who says "we aren't doing this for any reason other than to get more money.  We don't care about customers, patrons, or members at all", will certainly fail.

 

Quote

Except that part about "full disclosure..." As has been pointed out, "transparency" seems like an almost infinitely elastic term.

Great.  But there was no part that I said anything about "full disclosure" either.

 

[Amulek]

On 12/11/2019 at 10:48 AM, smac97 said:

Dr. P makes some pretty good points, some of which we have discussed here.  I'm hoping you folks will read them and post your thoughts/observations/responses.

Overall, I thought it was an enjoyable piece. Mostly, it focused on breaking down one specific criticism: That the church spends more money on malls than it spends on the needy (with the backdrop of the discussion being City Creek Center).

I thought he did a good job of pointing out the equivocation used by critics on what is meant by the word "spend," and why one may expect to see significant differences between how the church is run today, as opposed to what may have been done in the primitive church. 

He didn't really touch on "transparency" very much other than to note that he's open to the idea of the church being a bit more open, but it didn't sound like he was complaining about the current state of affairs either. And he seems to have a pretty good idea of what would naturally come about if even abbreviated numbers were to come out: people would endlessly pour over the numbers looking for ways to criticize the church for how/where it was spending its monies. 

 

[rockpond]

Continuing my reading and analysis of Peterson's posts... (not that anyone needs to care what I think but since people are responding, I'll continue) --

Part Five:  He cites some Biblical examples of fiscal management.  I can't imagine anyone could see this part as being disagreeable.

Part Six:  Peterson responds to the anonymous complaint that "Jesus never bought stocks or invested in a shopping mall."  He goes on to explain why the financial management of today's church cannot possibly be compared to the primitive church.  And he's correct.  I did like this sentence, wittily crafted by Peterson -- "In my judgment, the inability of the apostles to effectively guide a widely dispersed international church, first because of poor communications and in the end because they were dead, was a principal reason for its demise."

Part Seven:  Here he takes on the issue of financial transparency, which is an area of interest to me.

First, I appreciate that he acknowledges that he understands the complaint and that this complaint doesn't always come from critics.  Here's the quote:

Quote

I must say that I understand the complaint.  I get it.  My impression is that the most vocal critics of the Church’s relative lack of financial transparency tend to be disaffected critics who don’t contribute financially anyway but there are manifestly some exceptions to that, and I get it.

Since I am one of those who falls into the "exception", I appreciate that he makes note of this.

This is also where he makes the comment about an unnamed senior church leader that wanted to open up the finances (at least more than they are/were).  Here's the quote...

Quote

I happen to know of a very senior Church leader, now deceased, who wanted to make Church finances more open.  For what little it’s worth, I would have supported that.  I don’t know how far he would have gone, but I can certainly understand the inclination to open things up a bit.

It's already been discussed and I don't really have more to add.

He concludes by explaining why he is happy about paying tithes (to contrast the Jana Reiss article).  I too am happy each month when I pay my tithes.

 

Edited December 13, 2019 by rockpond

[rodheadlee]

6 hours ago, stemelbow said:

Come again?  The Church is financially independent because it depends on the billions it takes in each year from tithing?  I mean whatever floats boats and all of that.  The term has some murkiness to it, you'll find many define it differently anyway.  I just thought the notion funny--"we're financially independent.  We can operate at our current pace, building and all of that without taking in donations.  But we need donations."  That's more of what it came off as to me. 

It is interesting.  The Church being a lucrative corporation with tons of wealth and power, is no different than any other large corporation on this front, it seems to me.  If you think Amazon is only about amassing wealth you miss the entire point.  Indeed go read the very mission statements that drive them.  

For instance:

https://www.thebalancesmb.com/amazon-mission-statement-4068548

Any corporation out there who says "we aren't doing this for any reason other than to get more money.  We don't care about customers, patrons, or members at all", will certainly fail.

 

Great.  But there was no part that I said anything about "full disclosure" either.

 

I'm happy to be able to tithe to the church and partake of what they are building with their financial Independence.

Do you think Amazon is going to feed and clothe me when I'm having a hard time?

Can Amazon offer an eternal structure that they're building?

[stemelbow]

9 hours ago, rodheadlee said:

I'm happy to be able to tithe to the church and partake of what they are building with their financial Independence.

Do you think Amazon is going to feed and clothe me when I'm having a hard time?

Can Amazon offer an eternal structure that they're building?

I don't pay that much attention, but my wife's a big amazon user.  She does it because of the benefits they offer.  

I'm happy to hear you enjoy paying tithing and feeling blessed for it.  THat is really good.

[CV75]

18 hours ago, stemelbow said:

Come again?  The Church is financially independent because it depends on the billions it takes in each year from tithing?  I mean whatever floats boats and all of that.  The term has some murkiness to it, you'll find many define it differently anyway.  I just thought the notion funny--"we're financially independent.  We can operate at our current pace, building and all of that without taking in donations.  But we need donations."  That's more of what it came off as to me.

Yes, that is a funny notion depending on the level of murkiness used for the context.

It is interesting.  The Church being a lucrative corporation with tons of wealth and power, is no different than any other large corporation on this front, it seems to me.  If you think Amazon is only about amassing wealth you miss the entire point.  Indeed go read the very mission statements that drive them.

Again, the differentiation depends on the level of murkiness used in the characterization.

Great.  But there was no part that I said anything about "full disclosure" either.

OK I guess i misunderstood this: Posted yesterday at 09:54 AM (edited), "And BTW, if you read the comments in these parts, I'm DavidB, for full disclosure." Counting a pseudonym or abbreviation as "full disclosure" is a funny notion indeed! Admittedly, I was focusing on the OP title.

 

[CV75]

From Part 9, I think it is good to understand that people, both critics and supporters, can have strong feelings about the gospel non-essentials (“aesthetics and politics”), and to guide them into focusing on what is essential. I see the latter as the purpose of the many recent changes made in the Church under President Nelson’s tenure (and the directions taken under his predecessors during their administrations according to the times and circumstances).

[sjdawg]

Using big words and sarcasm doesn't make Peterson correct

[mrmarklin]

Have any of you been to the Vatican?  That is where the leaders of the Catholic Church live. Trust me when I say everything is the first stare of luxury. (Yes, I know the current Pope lives in less luxury than his predecessors).

Do you know where the leaders of the LDS Church live?  Neither do I. But it’s not in palaces. 

I think that’s all I need to know about church finances. 

[Scott Lloyd]

6 minutes ago, sjdawg said:

Using big words and sarcasm doesn't make Peterson correct

Being correct makes him correct. 
 

Using sarcasm makes him entertaining, and his facility with the language makes him eloquent. 

[smac97]

23 minutes ago, mrmarklin said:

Have any of you been to the Vatican?  That is where the leaders of the Catholic Church live. Trust me when I say everything is the first stare of luxury. (Yes, I know the current Pope lives in less luxury than his predecessors).

Do you know where the leaders of the LDS Church live?  Neither do I. But it’s not in palaces. 

I think that’s all I need to know about church finances. 

There are plenty of public land records available on this subject.  See here and here.

Assuming the content of those links is reasonably accurate, the homes of general authorities appear to be fairly moderate, both in terms of value and appointment.  Neither ramshackle nor opulent.  Fairly standard stuff.

Thanks,

-Smac

[stemelbow]

1 hour ago, CV75 said:

OK I guess i misunderstood this: Posted yesterday at 09:54 AM (edited), "And BTW, if you read the comments in these parts, I'm DavidB, for full disclosure." Counting a pseudonym or abbreviation as "full disclosure" is a funny notion indeed! Admittedly, I was focusing on the OP title.

Lol.  I got ya.  I was wondering why we seemed to be missing each other.  Thanks.