whistleblower on Church finances

[bluebell]

1 hour ago, Calm said:

The James Faust iirc paystub that was leaked showed his calculations for tithing and fast offerings in his own hand writing, so it seems likely. 

This makes me wonder if that money then specifically comes from the investment side of the church.  If it was tithe money, it wouldn't need to be tithed again.  I know while serving a mission we were specifically instructed not to pay tithing on the money we received each month from the church because it had already been tithed.  

[bluebell]

1 hour ago, Duncan said:

This could really be interesting in the future. I have heard of this happening , let's say you were asked to help a struggling family in the ward with food and stuff and you get whatever you have and trudge over there only to find out that other ward members got there first and so they don't really need it. You may get blessings from your service, but at the end of the day they didn't really need and maybe you feel misled as to their actual need. Would someone feel so inclined to pay tithing that they maybe can't afford to a church that has a 100 billion? yes, you'd get blessings but at the end of the day they don't need it, so why pay it? can you get blessed in other ways? certaintly. I just wonder how much tithing would come in now or other contributions

I think it would depend on whether or not you believe it was the church asking you to pay tithing, or God.  If you believed it was God asking it of you, then how much or little the church had would probably be irrelevant to your decision to pay.

[Tacenda]

14 minutes ago, The Nehor said:

Depends. Is it a suicide?

I'm sorry, but this made me chuckle. Even though it's not a laughing matter...

[Tacenda]

1 minute ago, bluebell said:

I think it would depend on whether or not you believe it was the church asking you to pay tithing, or God.  If you believed it was God asking it of you, then how much or little the church had would probably be irrelevant to your decision to pay.

But the church asks us to sacrifice everything, including our own lives to the church. Not the Saviour, if I'm remembering right, in our covenants. But I know if I put it in context it is said for the building up of the kingdom on earth. 

[bluebell]

8 minutes ago, Tacenda said:

But the church asks us to sacrifice everything, including our own lives to the church. Not the Saviour, if I'm remembering right, in our covenants. But I know if I put it in context it is said for the building up of the kingdom on earth. 

We are asked to be willing to sacrifice all that we have for the kingdom of God, and endowed believing members believe that it is God who asks us to do that, not the church.  

[bsjkki]

1 minute ago, bluebell said:

We are asked to be willing to sacrifice all that we have for the kingdom of God, and endowed believing members believe that it is God who asks us to do that, not the church.  

But to the unbeliever or disaffected, they just believe we are gullible dupes.

 

[The Nehor]

40 minutes ago, bsjkki said:

But to the unbeliever or disaffected, they just believe we are gullible dupes.

 

And if it is not true then we are:

“If in this life only we have hope in Christ, we are of all men most miserable.“

[The Nehor]

54 minutes ago, Tacenda said:

I'm sorry, but this made me chuckle. Even though it's not a laughing matter...

I am not sure whether my macabre sense of humor is a blessing or a curse.

[Tacenda]

This missionary couple worked hard for the profit side of the church, sometimes working 18 hours a day at the church's hunting preserve. I hope they didn't, but pretty sure they paid to do so. If so, it doesn't sit well with me, missionaries serving for the profit end of the church, but others probably love it, not me.  https://www.deseret.com/2000/7/10/19517193/tending-the-flock The article is old, in 2000. And this was a topic at one time on the board.

Hunters from around the country vie for a limited number of elk and moose permits there that cost as much as $8,500 each.

[Tacenda]

1 hour ago, bluebell said:

We are asked to be willing to sacrifice all that we have for the kingdom of God, and endowed believing members believe that it is God who asks us to do that, not the church.  

But I remember it says "to the church" in the context of the building up of the kingdom of God. Never liked it I guess, wish it had been worded differently, if that is possible. ETA: Come to think of it, it is going to the church, basically. So it's worded correctly.

Edited December 18, 2019 by Tacenda

[Thinking]

1 hour ago, ERMD said:

Everything else is opinion.

There's a hymn that I remember...

Quote

Do what is right let the consequence follow.

It seems to me that often when there is a controversy with the Church, defenders focus on the legality and ignore the morality or the rightness.

[webbles]

2 hours ago, SeekingUnderstanding said:

You’ve got this wrong. Let’s say that Harvard took in 7 billion in tuition and donations. They spend 6 billion running the school and funnel the rest into their endowment which they never touch. That would be the proper analogy. So basically the current students instead of being helped by the current endowment are actually overpaying to help some theoretical future student. 
 

The church spends zero dollars of its endowment towards the mission of the church. 

The analogy was meant to show how much money the church needs in its endowment to equal what Harvard is doing.  Harvard is spending 4.6% of its endowment and still is going to run out of money unless they increase their endowment.  If the church stopped taking in any donations and lived solely on their endowment, they would run out of money even faster because they would spend 6% of their endowment.  $100B sounds large but since the church is spending $6B a year, it isn't large enough to last forever.

[pogi]

9 minutes ago, Thinking said:

There's a hymn that I remember...

It seems to me that often when there is a controversy with the Church, defenders focus on the legality and ignore the morality or the rightness.

Are you suggesting that accumulating 100 billion for charity is immoral?

[webbles]

2 hours ago, rockpond said:

Where do you deduce that the church is spending $6B of the profit from its (alleged) $100B investment pool at EPA?

I'm not saying the church is spending $6B from the investment.  The article says that the church takes in $7B in donations and spends $6B with the extra $1B going to the investment.  So the church spends $6B.  If the church stopped taking in donations, it would have to start spending from the $100B endowment and that is where the comparison with the Harvard endowment is useful in determining how much the church needs to have invested before it can live off of the investment.  And $100B is not enough.

[webbles]

1 hour ago, stemelbow said:

It's alleged by the Nielsen brothers that the return on the investment is more like 7B a year.   That's covering the irrational cost and still needing 1 B a year.   That's good money.   

I don't see where they allege that the return is $7B.  I see where it says that the church accepts $7B in donations, though.  Maybe that is what you see.

Also, my calculations were off.  Take a look at my post where I compare the numbers between the church and Harvard.  $100B would require more than 7% return to get $6B in annual payments and most likely, the church would not be getting those returns just like Harvard isn't getting those returns.

[Duncan]

Either this Nielsen is nuts or there is something to it. If he is nuts then why would the Church have him involved in Church money?

[JAHS]

Interesting article by Peter J Reilly on the Forbes website:

I don’t think David Nielsen will be able to retire on the reward from this case. That’s because there is not much of a case. The argument is that a private foundation is supposed to distribute 5% of its assets. Ensign is not a private foundation. It is an integrated auxiliary of a church. And there is nothing in the tax law that prevents churches from accumulating wealth.

Paul Streckfus of the EO Tax Journal agrees that this matter does not merit IRS attention.

"The IRS does not attempt to question the beliefs or purposes of churches unless extreme (law violations, for example). In the case of the Mormon Church, if they honestly believe they should be saving for the "second coming of Christ," why should the IRS question that? Just because there is $100 billion involved? If so, how much is too much? While church leaders have not been forthcoming about this pot of gold, church members can always withdraw their support if they object to this extreme saving or seek to remove the leadership."

On the expenditures that the whistleblower objected to, Mr. Streckfus wrote me

"As far as bailing out the insurance company and the shopping mall, who is to say this was not a justified use of funds to try to save failing investments? In order for section 4958 on excess benefit transactions to come into play, I think the IRS would have to show some individuals benefiting personally from the bail out. Poor business judgment would not be sufficient. "

Professor Edward Zelinsky, author of Taxing The Church wrote me that taxing church endowments would not risk the entanglement issues that other forms of taxation might create. He agrees with me that there do not seem to be any current laws being violated.

"It strikes me as a question of policy rather than law. We impose a payout requirement on private foundations. We don't impose it on other charitable endowments. Maybe we should but we don't.   The Code's regulation of private foundations is overly-complex but parts of it make sense for all charitable endowments. That was the broader issue which Senator Grassley was raising about college and university endowments but the concern applies to all 501(c)(3) endowments including donor-advised funds, community foundations and religious endowments. "

If LDS has accumulated $100 billion and not been transparent about it, it is really up to the members to deal with their leadership. If it is bad policy to allow exempt organizations to accumulate so much, Congress should change the law. There is really nothing here for the IRS to do making the whistleblower complaint pure drama.

$100B In Mormon Till Does Not Merit IRS Attention

Edited December 18, 2019 by JAHS

[webbles]

Another thing, the article has made a comparison with the Gates Foundation and some have mentioned how much it spends.  I think comparing the Gates foundation to the church is incorrect.  The Gates foundation is trying to spend all of its money.  Its goal is to be completely broke within 20 years of Bill and Melinda Gates death.  So of course the Gates foundation is spending a lot more money.  The church, on the other hand, wants to last till the end of the world so it needs a lot more money invested.

[provoman]

20 minutes ago, Thinking said:

There's a hymn that I remember...

It seems to me that often when there is a controversy with the Church, defenders focus on the legality and ignore the morality or the rightness.

The accusations are legal accusations, so what is wrong focusing on the legality of the legal accusations?  

The first grievance of the whistleblower is that Esign Peak Advisors has not made "distributions" "for a charitable purpose".  Is a 501c3 established for religious purpose required to make distributions? Does the documentation cite an applicable code or law which requires distribution? 

As for morality or rightness, who were told "well done though good and faithful servant"? 

[smac97]

Just a few hours ago I wrote this:

Quote

I'm going to wait and see what happens.  I suspect the IRS will make a finding that the Church does indeed comply with the laws governing its finances.  The discussion will then shift from "The Church broke the law!" to oh-so-more-nebulous grumbling from armchair quarterbacks about what the Church should do (which can best be defined as "something vague, but definitely more than the Church is doing now, 'cuz the Church is bad").

I did not expect to be vindicated so quickly, but it looks like that's happening.

Peter J. Reilly, a contributor to Forbes, has weighed in on this story:

Quote

$100B In Mormon Till Does Not Merit IRS Attention
Peter J Reilly

Well, it’s interesting to see Mormons back in the tax news. The Washington Post has a story about a whistleblower’s disclosures to the IRS that Ensign Peak Advisors, Inc, founded in 1997, has accumulated over $100 billion in assets without ever making any charitable distributions. The only two outflows appear to have been to bail out failing investments.

As you may have guessed from the title of the piece, he doesn't think much of the story.  Read on:

Quote

Nothing To See Here Folks

I don’t think David Nielsen will be able to retire on the reward from this case. That’s because there is not much of a case. The argument is that a private foundation is supposed to distribute 5% of its assets. Ensign is not a private foundation. It is an integrated auxiliary of a church. And there is nothing in the tax law that prevents churches from accumulating wealth.

Mr. Reilly apparently isn't alone in his assessment:

Quote

Paul Streckfus of the EO Tax Journal agrees that this matter does not merit IRS attention.

Quote

The IRS does not attempt to question the beliefs or purposes of churches unless extreme (law violations, for example). In the case of the Mormon Church, if they honestly believe they should be saving for the "second coming of Christ," why should the IRS question that? Just because there is $100 billion involved? If so, how much is too much? While church leaders have not been forthcoming about this pot of gold, church members can always withdraw their support if they object to this extreme saving or seek to remove the leadership.

Paul Streckfus, editor EO Tax Journal

On the expenditures that the whistleblower objected to, Mr. Streckfus wrote me

Quote

 

As far as bailing out the insurance company and the shopping mall, who is to say this was not a justified use of funds to try to save failing investments? In order for section 4958 on excess benefit transactions to come into play, I think the IRS would have to show some individuals benefitting personally from the bail out. Poor business judgment would not be sufficient. 

Paul Streckfus, editor EO Tax Journal

 

 

He nevertheless acknowledges some controversy:

Quote

On The Other Hand

So in my view, reporting this to the IRS is pointless, but that does not mean that there is nothing worth discussing. You can see discussion on ex-Mormon sites like this one about the sinister nature of the accumulation. One person I wrote to indicated it reminded him of the Boys Town story, where the storied charity’s raising of excess funds was exposed by none other than Warren Buffett.

As I said: "I suspect the IRS will make a finding that the Church does indeed comply with the laws governing its finances.  The discussion will then shift from 'The Church broke the law!' to oh-so-more-nebulous grumbling from armchair quarterbacks about what the Church should do (which can best be defined as 'something vague, but definitely more than the Church is doing now, 'cuz the Church is bad')."

Mr. Reilly continues:

Quote

The amateur historian in me kind of stands back in awe at what LDS has achieved.

I too am pretty impressed with the Church's handling of its finances.

Quote

An interesting question is why we don’t demand the same level of transparency of churches, that we require of other not-for-profits. And you could also ask why church members don’t demand it of their churches. If there were that sort of transparency we would not have people being shocked, shocked that LDS has accumulated such a big stash. I have written about that issue here and here.

The other big issue is why not for profits are able to accumulate so much. Presumably the deduction for charitable contributions and the exemption from tax on investment earnings are reflective of not for profits doing something that serves some social purpose. If they are just going to accumulate, better they should pay some taxes. So called charities are becoming pools of tax-free capital.

These are reasonable points, though I don't think they end the discussion.

He concludes:

Quote

If LDS has accumulated $100 billion and not been transparent about it, it is really up to the members to deal with their leadership. If it is bad policy to allow exempt organizations to accumulate so much, Congress should change the law. There is really nothing here for the IRS to do making the whistleblower complaint pure drama.

Thoughts?

-Smac

[smac97]

10 minutes ago, JAHS said:

Interesting article by Peter J Reilly on the Forbes website:

I don’t think David Nielsen will be able to retire on the reward from this case. That’s because there is not much of a case. The argument is that a private foundation is supposed to distribute 5% of its assets. Ensign is not a private foundation. It is an integrated auxiliary of a church. And there is nothing in the tax law that prevents churches from accumulating wealth.

Paul Streckfus of the EO Tax Journal agrees that this matter does not merit IRS attention.

"The IRS does not attempt to question the beliefs or purposes of churches unless extreme (law violations, for example). In the case of the Mormon Church, if they honestly believe they should be saving for the "second coming of Christ," why should the IRS question that? Just because there is $100 billion involved? If so, how much is too much? While church leaders have not been forthcoming about this pot of gold, church members can always withdraw their support if they object to this extreme saving or seek to remove the leadership."

On the expenditures that the whistleblower objected to, Mr. Streckfus wrote me

"As far as bailing out the insurance company and the shopping mall, who is to say this was not a justified use of funds to try to save failing investments? In order for section 4958 on excess benefit transactions to come into play, I think the IRS would have to show some individuals benefiting personally from the bail out. Poor business judgment would not be sufficient. "

Professor Edward Zelinsky, author of Taxing The Church wrote me that taxing church endowments would not risk the entanglement issues that other forms of taxation might create. He agrees with me that there do not seem to be any current laws being violated.

"It strikes me as a question of policy rather than law. We impose a payout requirement on private foundations. We don't impose it on other charitable endowments. Maybe we should but we don't.   The Code's regulation of private foundations is overly-complex but parts of it make sense for all charitable endowments. That was the broader issue which Senator Grassley was raising about college and university endowments but the concern applies to all 501(c)(3) endowments including donor-advised funds, community foundations and religious endowments. "

If LDS has accumulated $100 billion and not been transparent about it, it is really up to the members to deal with their leadership. If it is bad policy to allow exempt organizations to accumulate so much, Congress should change the law. There is really nothing here for the IRS to do making the whistleblower complaint pure drama.

$100B In Mormon Till Does Not Merit IRS Attention

JAHS,

Not cool, man.  Don't I have first dibs on posting news items?

😀

-Smac

[provoman]

10 minutes ago, Duncan said:

Either this Nielsen is nuts or there is something to it. If he is nuts then why would the Church have him involved in Church money?

The facts can be true, what a speaker implies of the same facts and what a listener infers of the same facts can both be false.   
 

[rockpond]

12 minutes ago, smac97 said:

Just a few hours ago I wrote this:

I did not expect to be vindicated so quickly, but it looks like that's happening.

Peter J. Reilly, a contributor to Forbes, has weighed in on this story:

As you may have guessed from the title of the piece, he doesn't think much of the story.  Read on:

Mr. Reilly apparently isn't alone in his assessment:

He nevertheless acknowledges some controversy:

As I said: "I suspect the IRS will make a finding that the Church does indeed comply with the laws governing its finances.  The discussion will then shift from 'The Church broke the law!' to oh-so-more-nebulous grumbling from armchair quarterbacks about what the Church should do (which can best be defined as 'something vague, but definitely more than the Church is doing now, 'cuz the Church is bad')."

Mr. Reilly continues:

I too am pretty impressed with the Church's handling of its finances.

These are reasonable points, though I don't think they end the discussion.

He concludes:

Thoughts?

-Smac

Makes sense to me.

[mnn727]

The Parable of the Talents
14 “For it will be like a man going on a journey, who called his servants[a] and entrusted to them his property. 15 To one he gave five talents, to another two, to another one, to each according to his ability. Then he went away. 16 He who had received the five talents went at once and traded with them, and he made five talents more. 17 So also he who had the two talents made two talents more. 18 But he who had received the one talent went and dug in the ground and hid his master's money. 19 Now after a long time the master of those servants came and settled accounts with them. 20 And he who had received the five talents came forward, bringing five talents more, saying, ‘Master, you delivered to me five talents; here, I have made five talents more.’ 21 His master said to him, ‘Well done, good and faithful servant.[c] You have been faithful over a little; I will set you over much. Enter into the joy of your master.’ 22 And he also who had the two talents came forward, saying, ‘Master, you delivered to me two talents; here, I have made two talents more.’ 23 His master said to him, ‘Well done, good and faithful servant. You have been faithful over a little; I will set you over much. Enter into the joy of your master.’ 24 He also who had received the one talent came forward, saying, ‘Master, I knew you to be a hard man, reaping where you did not sow, and gathering where you scattered no seed, 25 so I was afraid, and I went and hid your talent in the ground. Here, you have what is yours.’ 26 But his master answered him, ‘You wicked and slothful servant! You knew that I reap where I have not sown and gather where I scattered no seed? 27 Then you ought to have invested my money with the bankers, and at my coming I should have received what was my own with interest. 28 So take the talent from him and give it to him who has the ten talents. 29 For to everyone who has will more be given, and he will have an abundance. But from the one who has not, even what he has will be taken away. 30 And cast the worthless servant into the outer darkness. In that place there will be weeping and gnashing of teeth.’

[Bernard Gui]

Yeah. Just wait until they learn about the yachts in the secret marina on Antelope Island and the fleet of fifteen Learjet 75 Freedoms hidden somewhere in the Salt Flats out by Tooele. I also heard about some Maserati GT Convertible Prophetmobiles that are on order. 

You read it here first. 

Edited December 18, 2019 by Bernard Gui