whistleblower on Church finances

[Danzo]

14 minutes ago, rockpond said:

All true.  But what does a doctor choosing to serve a humanitarian health mission have to do with the Church's expenditures on humanitarian aid or charitable contributions.  It is the doctor's time and opportunity cost, not the Church's.  

In other words, if someone is trying to assess how much the Church spends on humanitarian causes (setting aside the question of whether humanitarian aid is something the Church even needs to do), a member choosing to donate his/her time and talents is not relevant.  The Church doesn't get to claim that they contributed some dollar value for the member's time.

Actually, from an accounting and tax standpoint, the doctor contributes his time to the church and the church contributes the doctors service.  That is why the doctor can take a tax deduction for his unreimbursed expenses if he does it as a church mission, he cannot if he goes out and does it on his own. 

in my example for habitat for humanity the organizations contributes both it'ts financial resources and the labor of its volunteers to the value of the house.  we account for both. The value of in kind labor contributions is usuallly reported on part III of the 990.  Also, the number of volunteers is reported on page one. 

[helix]

I posted in the Reddit latterdaysaints sub the following:

From the Letter to an IRS Director

The allegations are two-fold:

1) The first allegation is that an auxiliary non-profit 501(c)(3) unit cannot be used solely to invest, even if the overall parent 501(c)(3), the church, spends far more money on non-profit expenses. A 501(c)(3) auxiliary unit of the church (Ensign) allegedly annually invests 1/7th of church tithing income ($1 billion), while the other 6/7th is spent on church functions. Further, Ensign is alleged to not have spent any investment on charity in 22 years.

• The source of the $1B in tithing is a single PowerPoint slide, which doesn't call it tithing, but rather money "granted to [Ensign] on an annual basis" (page 43).
• It further doesn't state whether some or all of this $1B came from non-profit or for-profit sources.
• The source for $7B in annual tithing is a second-hand recollection of someone else's guess (page 20).
• The Washington Post notes no evidence was provided for the claim of $0 spent on charity from Ensign.

2) The second allegation is that the same 501(c)(3) auxiliary unit used non-profit money fraudulently to backstop two for-profit church units.

• A single summary PowerPoint slide (page 43) is given to support these claims, specifically that the investment fund can be used to backstop taxable entities.
• However, no evidence was given that these payments were done fraudulently.
• No evidence was given regarding if or how two alleged backstop payments were reported to the IRS and/or taxed, or whether the funds came from acceptable sources.

Further, the critic also alleges the church has $100 billion in accumulated wealth.

• This $100B value is fully estimated and no evidence beyond speculation is given to support these claims.

----

The evidence is scant.  Really scant.  He hinges everything on a single PowerPoint slide, and he makes big assumptions from it. 

Here is my guess what occurred:

• The $1 B in income to Ensign is a mix of funds, not just tithing
• Ensign manages both for-profit and non-profit investments (non-profits can own for-profits)
• Some for-profit investment money was used for Beneficial Life and City Creek

That's it.  I just don't see anything nefarious here.

 

 

[juliann]

25 minutes ago, rockpond said:

All true.  But what does a doctor choosing to serve a humanitarian health mission have to do with the Church's expenditures on humanitarian aid or charitable contributions.  It is the doctor's time and opportunity cost, not the Church's.  

In other words, if someone is trying to assess how much the Church spends on humanitarian causes (setting aside the question of whether humanitarian aid is something the Church even needs to do), a member choosing to donate his/her time and talents is not relevant.  The Church doesn't get to claim that they contributed some dollar value for the member's time.

Of course they do! They just don't. These people don't just wander in off the street. They are called, organized, and supervised by the Church. IIRC, Seventh Day Adventists do add that to their humanitarian work. 

My question is, why in the world would you want to omit this? 

[Maestrophil]

49 minutes ago, Navidad said:

Not to carry this on - but here is what I said in full: Sorry, I just can't resist commenting on this. I have heard in ward meetings and in church publications that Church members hesitate to associate with non-Church members or allow their children to associate with non-Church member children because the faithful Church member has higher standards than non-Church members. Thus, associating with non-members might influence them to lower their standards. As a non-member, that has always bothered me. Then in the very first post on this thread I see someone who is apparently a church member offering advice on how to defraud The Washington Post of its income from subscribers - how to read articles you are not entitled to read without having to subscribe! Hmmm . . . now what about those standards? 

I didn't say it was taught by the Church institutionally. Methinks either I didn't say it well or you misread my post or a subsequent one by someone else. 

CFR on those church publications please.  Hearsay regarding church meetings dies not count for anything. I mean the exact quotes where it is stated members are hesitant or taught to stay away from non-members - user comment sections don't count either. 

Edited December 17, 2019 by Maestrophil
clarify

[provoman]

1 hour ago, Danzo said:

The IRS does not exonerate accusations.  They decide to make an adjustment in tax (or a determination as to not profit status) or they don't

The most likely outcome is that nothing happens (which isn't really an exoneration). 

The only way for the church to be exonerated (and we would know about it) is if the IRS made an adverse determination, the church went to court and the church won, which is not likely to happen.

 

Thanks for the clarification.

[smac97]

3 minutes ago, Navidad said:

Somehow I am just not saying this right. The discussions were by members in the ward that indeed this kind of thing happens and that Saints do indeed think they have higher standards than non-Saints and that they do indeed sometimes shun new people, especially non-members.

Are these discussions concluding with "And it is good and appropriate for us to think we are better than those not of our faith, and to shun them and make them feel inferior and unwelcome"?

3 minutes ago, Navidad said:

The articles in LDS Living were written by non-members sharing their pain and loneliness when moving into Mormon enclaves. As I remember the comments to the article by Saints were generally in affirmation that this does happen. What bothers me is the assumption inherent in the shunning (to use an Anabaptist term) that members of the LDS Church have higher standards than non-Members and that to associate or allow kids to associate would have a corrupting influence.

I still don't understand.  Are the articles/comments you are referencing approving or disapproving the "shunning" and arrogance you are referencing here?

3 minutes ago, Navidad said:

In fact, just a week or so ago we had a discussion over a fellowship dinner in the ward about the theory that the LeBaron children became dysfunctional to the point of psychosis during their twenty year time living as children in Colonia Juarez where they (as children) were routinely ostracized, picked on, and abused by the local Saints, especially at the academy.

Sounds like gossip.  

I have a friend who came out of a polygamous community (I won't say which one).  He spoke often and at some length as to the dysfunction he and his siblings experienced.  I don't think gossiping about such things is appropriate, but there can be times and situations in which candid discussions about such problems is a good thing.

3 minutes ago, Navidad said:

More than half of the LeBaron children (who became so dysfunctional as adults) graduated from the academy. As you can imagine, the death of the folks here has caused a lot of discussions in our area. There is a large degree of inter-relatedness among the colonies.

My dad's parents both grew up there.  My dad has visited there many times.  I've been there once.

3 minutes ago, Navidad said:

Almost everyone at the table agreed that they had heard stories, especially in the writings of Nelle Spilsbury Hatch about how mean their parents and grandparents were to the LeBaron children during their twenty year sojourn in Colonia Juarez. It seemed to be common knowledge that the LeBarons were treated very badly by both adults and kids from 1924 when they arrived to 1944 when they left. That has nothing to do with my original post about standards. I just thought it was a very interesting insight into the later mental health issues prevalent in so many of the LeBaron siblings. 

So you are complaining about clannishness and mistreatment from 75-100 years ago?

Sorry, I am still not understanding your position.  

I think Latter-day Saints mistreating those not of our faith is bad.  It happens, and it's bad.  We need to stop that.  We need to reach out and friendship and kindness.

As for "standards," I think Latter-day Saints should keep their covenants, and should not feel ashamed about it.  During my time in the Army, I was sometimes ridiculed for believing in God, attending Church, reading scriptures, abstaining from alcohol and tobacco, abstaining from extramarital sex, and so on.  (There were also times in which people expressed admiration for these observances.)  Nevertheless, I don't think I ever lorded these things over my fellow soldiers.  I never flaunted or bragged.  I never shunned anyone.  I never criticized anyone for not doing the things I was doing, or for doing things from which I abstained.  I simply went my way.  

Thanks,

-Smac

[Maestrophil]

I am thrilled the church has used my (paltry, comparatively) tithing to build the future security of the church, and thus, its members.  I am excited the church is healthy financially - I have and will benefit from the church's stability in many ways, and I feel good my posterity will too.  

If there can be any proof that the church has done anything illegal - then let the chips fall where they may - but if the gripe is that the church has "spent" money amassing a large amount of holdings/investments, then color me happy!  🙂

[smac97]

10 minutes ago, rockpond said:

It's good public relations on the Church's part:  The opinion piece communicates to members that there is nothing of concern in the article.  It re-directs to the positive while downplaying (or ignoring altogether) the actual accusations.

It provides a hyperlink to the story.  The one with the "actual accusations."

Thanks,

-Smac

[provoman]

13 hours ago, Michael Sudworth said:

I am absolutely devastated at this level of deception that has been carried on for so many years.

I phoned all of my adult children tonight, instructing them not to pay any further tithing until President Nelson makes a comment why the Church has amassed 100 Billion dollars by misappropriating sacred tithing funds.

By what standard do you find "misappropriating sacred tithing funds".

Not trying to be difficult here. To claim funds were misappropriated is to know the appropriate use of the funds.

[rockpond]

1 minute ago, smac97 said:

It provides a hyperlink to the story.  The one with the "actual accusations."

Thanks,

-Smac

Understood.  But I think most members are likely to see the Trib's opinion piece and conclude that there is no reason to be concerned with (or read) the Washington Post article.

[alter idem]

13 hours ago, ttribe said:

He only receives something if his allegations are supported by the investigation. Think about that for a little while. 

I don't need to think about it.  I don't trust the whistleblower's motives at all.  I think he's looking to harm the church and get rich. And if it turns out to be unfounded, well.... IMO, he doesn't care since it will benefit him either way. 

[rockpond]

4 minutes ago, Maestrophil said:

I am thrilled the church has used my (paltry, comparatively) tithing to build the future security of the church, and thus, its members.  I am excited the church is healthy financially - I have and will benefit from the church's stability in many ways, and I feel good my posterity will too.  

If there can be any proof that the church has done anything illegal - then let the chips fall where they may - but if the gripe is that the church has "spent" money amassing a large amount of holdings/investments, then color me happy!  🙂

I think the other "gripe" is that the Church may have given funds received as charitable contributions to for profit entities without them being documented as such.  That's how I read the article.

I'm unclear on how this is a problem because the Church regularly invests its cash reserves into for profit ventures.  It seems like these transfers to City Creek and Beneficial Life could just be explained by the church as additional capital contributions to entities owned by the Church.  But I don't understand IRS tax code enough to know if how they did it was wrong.

[juliann]

4 minutes ago, alter idem said:

I don't need to think about it.  I don't trust the whistleblower's motives at all.  I think he's looking to harm the church and get rich. And if it turns out to be unfounded, well.... IMO, he doesn't care since it will benefit him either way. 

Or it could be another McKenna Denson situation.....

[JAHS]

1 hour ago, Lemuel said:

Only in places like the US where there are sufficient fast offerings.  Not so much in the poorest countries.  https://bountifulchildren.org/how-to-help/adopt-a-community

According to the Church:

"As part of the fast, members of the Church contribute a generous fast offering for the care of the poor and the needy. This offering should be at least the
value of the two meals the Church member went without while fasting. These funds are used to provide 
food, shelter, and other necessities to people in need, both locally and worldwide."  (Publication: Tithing and Fast Offerings)

There are other Church sponsored humanitarian aid programs that help these people as well. 

[rockpond]

13 minutes ago, juliann said:

Of course they do! They just don't. These people don't just wander in off the street. They are called, organized, and supervised by the Church. IIRC, Seventh Day Adventists do add that to their humanitarian work. 

My question is, why in the world would you want to omit this? 

If you are going to claim the time and resources of a member serving a mission than you would need to do it on both sides:  claim those hours as contributions to the church and then claim them as donations by the church to other causes.  It would be a wash so there isn't really a point.

I don't think the Church claims the hours of service provided by church members because those "hours" belong to the individual members and they are not donating them to the church, they are donating them to the specific cause they are working for at the time.

[rockpond]

4 minutes ago, JAHS said:

According to the Church:

"As part of the fast, members of the Church contribute a generous fast offering for the care of the poor and the needy. This offering should be at least the
value of the two meals the Church member went without while fasting. These funds are used to provide 
food, shelter, and other necessities to people in need, both locally and worldwide."  (Publication: Tithing and Fast Offerings)

There are other Church sponsored humanitarian aid programs that help these people as well. 

We have no idea how much of fast offering donations are used to feed, shelter, and care for the poor.  Literally no idea, the church doesn't share that information with those members who donate.

 

From an interview with President Hinckley in 2002 (http://www.mscbc.org/hinckley.htm) --

REPORTER:

IN MY COUNTRY, THE…WE SAY THE PEOPLE'S CHURCHES, THE PROTESTANTS, THE CATHOLICS, THEY PUBLISH ALL THEIR BUDGETS, TO ALL THE PUBLIC.

HINCKLEY:

YEAH. YEAH.

REPORTER:

WHY IS IT IMPOSSIBLE FOR YOUR CHURCH?

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.

Edited December 17, 2019 by rockpond

[Thinking]

From the tithing slip:

Quote

Though reasonable efforts will be made to use donations as designated, all donations become the Church's property and will be used at the Church's sole discretion to further the Church's overall mission.

 

[smac97]

4 minutes ago, rockpond said:

We have no idea how much of fast offering donations are used to feed, shelter, and care for the poor.  Literally no idea, the church doesn't share that information with those members who donate.

Really?  No idea at all?  Literally "no idea"?  There is no evidence available?  

Thanks,

-Smac

Edited December 17, 2019 by smac97

[Calm]

25 minutes ago, Lemuel said:

You make a solid point--the Bountiful Children's Foundation no longer makes any reference to helping LDS children.  They used to:

http://www.mormondialogue.org/topic/64094-liahona-childrens-foundation/ 

They used to say that for $6000 you could 'Adopt a Stake'; now it says you can 'Adopt a Community'. https://bountifulchildren.org/how-to-help/adopt-a-community

So perhaps the problem is solved among the LDS children?  Or perhaps they removed the reference to LDS kids because it makes the church look bad.  I can't say.

 

 

More likely they decided it was best to use resources to help the full community rather than single out LDS children if only to avoid creating obstacles and ill feelings towards the Church from nonmembers....if they only focused on LDS children at the beginning. They might have done this if they worked through the local church organization,  but if the set up was independent that would require screening kids for membership...seems unnecessary for the purpose which is to help malnourished children. 

Edited December 17, 2019 by Calm

[Thinking]

15 hours ago, JAHS said:

“We simply think that information belongs to those who made the contribution, and not to the world,” said Hinckley, who died in 2008.

I disagree. IMO those who pay taxes should have a right to know the financial information of those who are exempt from paying taxes.

[pogi]

If only our government could be as financially sound and live off of interest, and get our taxes down to 10% or lower.

Some will probably make a bigger fuss over this 100 billion in reserves, than the 23 Trillion national debt.

[JamesBYoung]

1 hour ago, Thinking said:

From the tithing slip:

 

Thank you for that, Thinking.

[pogi]

3 minutes ago, Thinking said:

I disagree. IMO those who pay taxes should have a right to know the financial information of those who are exempt from paying taxes.

He's not talking about taxes

[alter idem]

13 hours ago, bsjkki said:

I'm still trying to figure out why I should feel the church misled me by turning a portion of tithing dollars into a reserve fund for a rainy day. Sounds like smart money management and what the church teaches the members to do with their own funds. This guy doesn't have all the facts of the bailout money so we will see if anything was done inappropriately but I think the church using earning on this fund to keep from having beneficial life go bankrupt and leaving its policy holders high and dry, was a good thing. I think the scandal of a 'wealthy' church stiffing policy holders would be worse. Also, the church has an interest in downtown development and rejuvenation...I wonder how these 'bailout' dollars were categorized and how exactly how they were spent. I'm not sure the church's accountants are totally inept so will reserve all judgement.

Me too.  I don't understand all this hand wringing over how the church is handling funds.  Those tithing dollars, if saved, may just be what saves the members one day.  And why anyone thinks this is a 'loss of trust'--I don't understand.  Haven't we always paid our tithes, with the understanding that they've been given over to church leaders to use as they feel inspired?  Paying tithing is always voluntary, no one is forced.  If leaders were buying themselves homes, buying cars, jewelry, lavish lifestyles, buying influence for their children and families, etc.  I can understand being upset, but they're shoring up investments, putting money in reserve, etc, what's so horrible about that?  Would it have been better to let beneficial go bankrupt and harm all those people????  Don't they have a responsibility??   I really do not understand how some people can be so compartmentalized in their thinking, that their knee jerk reaction is to  automatically condemn or lose trust in the church and assume they are scamming the members whenever some one makes an allegation.

[bluebell]

The church has provided a statement.  Has it been put up already?

https://newsroom.churchofjesuschrist.org/article/first-presidency-statement-church-finances

We take seriously the responsibility to care for the tithes and donations received from members. The vast majority of these funds are used immediately to meet the needs of the growing Church including more meetinghouses, temples, education, humanitarian work and missionary efforts throughout the world. Over many years, a portion is methodically safeguarded through wise financial management and the building of a prudent reserve for the future. This is a sound doctrinal and financial principle taught by the Savior in the Parable of the Talents and lived by the Church and its members. All Church funds exist for no other reason than to support the Church’s divinely appointed mission.

Claims being currently circulated are based on a narrow perspective and limited information. The Church complies with all applicable law governing our donations, investments, taxes, and reserves. We continue to welcome the opportunity to work with officials to address questions they may have.