whistleblower on Church finances

[bluebell]

5 minutes ago, rockpond said:

The implication of the slide is that the Church is choosing to go into debt and this fund serves as collateral for that debt (among other things).

That makes sense. It would be interesting to learn what circumstances the church wants to be prepared for in case going back into debt is the best option. 

[smac97]

12 minutes ago, rockpond said:

Correct.  My point was just that if they have the $100 billion dollar investment fund, which the slide claims is "collateral", then they don't ever need to go into debt.  It would have to be a choice.

If they were to lose the fund and need to go into debt, then they wouldn't have the collateral.

The implication of the slide is that the Church is choosing to go into debt and this fund serves as collateral for that debt (among other things).

I don't follow.  How often does cash function as collateral?  

Honest question.  

Thanks,

-Smac

[rockpond]

3 minutes ago, smac97 said:

I don't follow.  How often does cash function as collateral?  

Honest question.  

Thanks,

-Smac

Any asset can function as collateral.  In this case the asset is the investment fund.  I assume a small portion of it is held in cash but most is invested.  A bank would certainly accept the fund as collateral.

[Anonymous Mormon]

7 hours ago, Tacenda said:

Thought some of you might want to listen to this interview with D. Michael Quinn.

https://www.sltrib.com/podcasts/mormonland/

Church has $100B in reserve, but one historian says its global expenses are steep | Episode 114

I listened to this podcast and it was really interesting and really good. For those that don't want to take the time to listen, here were my take-aways (anyone can jump in to correct or add others):

• Quinn feels the $100B is a totally reasonable amount for the church to have as a reserve. If there were a depression (not just a recession) this kind of reserve would be required to fund the church for multiple years as the economy recovered.
• Quinn believes that this particular reserve fund is only a 'percentage' of the total assets the Church has in reserve. He thinks there are other funds and likely at least one fund in every major financial hub across the globe (i.e., Japan, San Francisco, London, etc.). He believes all of these funds are siloed to not know about each other.
• Quinn's estimate of the Church's revenue from tithing and businesses is a LOT higher than $7B per year and he still maintains this estimate.
• He speculated a little that the reason the whistle blower may have had such a conservative estimate on Tithing is to make the $100B look so much larger and unnecessary. If the true amount of tithing is actually $25B p/yr, then the $100B would only be a 4x and wouldn't look unnecessarily large. He pointed out that this $7B estimate has absolutely no references other than hearsay and that he doubts that the people at Ensign Peak have any idea the actual number, so it's all speculation.
• As a point of reference for his doubts about the $7B tithing/revenue number and the associated info from the whistle blower, he said the whistle blower said the church spent $1B every year on church expenditures outside of the US. But Quinn said that in the church's public disclosure records for England the church shows they spend $500K there alone annually, so he thinks this number has to be much higher when taking into account the other 130+ countries the church operates in. 
  (note: I was wanting to dig into the internet to see if I can find any sources for both of the claims ($1B claim of whistle blower & $500K claim of England) but I don't have time today. If anyone else wants to pull sources I'd love to see it)
• Quinn would like to see the church release some high level numbers of income, money spent outside the US, and percentage saved, as he feels this would actually build trust with the members
• Quinn was overall really positive. He pointed out multiple times that the church leaders all earn very little ($125K p/yr for church leaders, as opposed to $500K p/yr for CEO of Red Cross) compared to the organization they manage. and he mentioned the church is a good steward with its funds.

Overall, it was a great interview podcast and I generally agree with Quinn's views and believe Quinn's numbers could be more accurate than the whistle blowers.

[rockpond]

11 minutes ago, Anonymous Mormon said:

I listened to this podcast and it was really interesting and really good. For those that don't want to take the time to listen, here were my take-aways (anyone can jump in to correct or add others):

• Quinn feels the $100B is a totally reasonable amount for the church to have as a reserve. If there were a depression (not just a recession) this kind of reserve would be required to fund the church for multiple years as the economy recovered.
• Quinn believes that this particular reserve fund is only a 'percentage' of the total assets the Church has in reserve. He thinks there are other funds and likely at least one fund in every major financial hub across the globe (i.e., Japan, San Francisco, London, etc.). He believes all of these funds are siloed to not know about each other.
• Quinn's estimate of the Church's revenue from tithing and businesses is a LOT higher than $7B per year and he still maintains this estimate.
• He speculated a little that the reason the whistle blower may have had such a conservative estimate on Tithing is to make the $100B look so much larger and unnecessary. If the true amount of tithing is actually $25B p/yr, then the $100B would only be a 4x and wouldn't look unnecessarily large. He pointed out that this $7B estimate has absolutely no references other than hearsay and that he doubts that the people at Ensign Peak have any idea the actual number, so it's all speculation.
• As a point of reference for his doubts about the $7B tithing/revenue number and the associated info from the whistle blower, he said the whistle blower said the church spent $1B every year on church expenditures outside of the US. But Quinn said that in the church's public disclosure records for England the church shows they spend $500K there alone annually, so he thinks this number has to be much higher when taking into account the other 130+ countries the church operates in. 
  (note: I was wanting to dig into the internet to see if I can find any sources for both of the claims ($1B claim of whistle blower & $500K claim of England) but I don't have time today. If anyone else wants to pull sources I'd love to see it)
• Quinn would like to see the church release some high level numbers of income, money spent outside the US, and percentage saved, as he feels this would actually build trust with the members
• Quinn was overall really positive. He pointed out multiple times that the church leaders all earn very little ($125K p/yr for church leaders, as opposed to $500K p/yr for CEO of Red Cross) compared to the organization they manage. and he mentioned the church is a good steward with its funds.

Overall, it was a great interview podcast and I generally agree with Quinn's views and believe Quinn's numbers could be more accurate than the whistle blowers.

Thanks for the summary.  I haven't had a chance to listen yet.  I probably still will but I appreciate the highlights you've taken the time to give us.

A couple thoughts:

• $25B per year seems reasonable if it is tithing PLUS disbursed income from church owned businesses.  $25B seems high to me if it just represents tithing alone (admittedly, I have not done the research Quinn has... just throwing out my worthless opinion on the matter).
• I still think it is premature to decide that we know what church leaders own.  For example, in addition to that $125k that we learned about from Mormon Leaks, are they also paid for sitting on boards of church owned corporations?  It's been reported that the board of Deseret Management Corp is comprised of the First Presidency, several members of the Q12 Apostles, and the Presiding Bishopric.
• I agree with your conclusion in the sense that the whistleblower only has insight into the one "silo" that he worked for.  Quinn, on the other hand, spent the better part of a decade researching.

 

[Calm]

10 minutes ago, rockpond said:

For example, in addition to that $125k that we learned about from Mormon Leaks, are they also paid for sitting on boards of church owned corporations?

While it is possible there are other sources of income, iirc the calculation of tithing based on the amount given on the leaked pay stub would seem to indicate at least for that month that was the sole source.  Now it might be possible there were quarterly or once yearly or intermittent income payments, but I think for something you would expect a monthly salary for, the evidence indicates otherwise at least in one case and there seems little reason to assume his case was unusual.  It could be problematic if there were substantially different opportunities for income among the apostles imo.

Edited January 17, 2020 by Calm

[Anonymous Mormon]

9 minutes ago, rockpond said:

• $25B per year seems reasonable if it is tithing PLUS disbursed income from church owned businesses.  $25B seems high to me if it just represents tithing alone (admittedly, I have not done the research Quinn has... just throwing out my worthless opinion on the matter).

Actually, Quinn's estimate is much higher than $25B (I just threw out $25B because I feel his number might be too high):

Quote

"but historian D. Michael Quinn estimates its 2010 tithing in"come at $33 billion dollars. And that’s to say nothing of the Church’s investments, business holdings, and “seemingly endless capital.”  -https://radiowest.kuer.org/post/mormon-wealth-and-corporate-power

If we went with his $33B of ONLY Tithing, then the church only has a 3x savings fund. Note that I don't believe Quinn ever mentioned this number in the podcast, but he did say that his original prediction was only for 2010 and the number would have grown by now for sure. So if it grew to $40B then it's just over a 2x savings fund, which is an even more reasonable amount. 

 

14 minutes ago, rockpond said:

• I still think it is premature to decide that we know what church leaders own.  For example, in addition to that $125k that we learned about from Mormon Leaks, are they also paid for sitting on boards of church owned corporations?  It's been reported that the board of Deseret Management Corp is comprised of the First Presidency, several members of the Q12 Apostles, and the Presiding Bishopric.

Did we happen to learn how much they earn for sitting on the board? There could be all kinds of reasons why you would pay board members a token amount (for the same reason that CEOs of non-profits are encouraged to take a salary). But I would be sincerely surprised if they earn a lot of money from it. Especially since according to Wikipedia (which is always reliable) the board has three rotating members of the Quorum of the Twelve. (I could just imagine a member of the 12's excitement when their turn to rotate onto the board comes up and they get their extra check for $350K for that year).

I sincerely doubt that any of the brethren ever earn a package greater than $175K and that is not near anything that they could get if they worked outside the church, especially when you consider their hours of dedication.

[rockpond]

9 minutes ago, Anonymous Mormon said:

Actually, Quinn's estimate is much higher than $25B (I just threw out $25B because I feel his number might be too high):

If we went with his $33B of ONLY Tithing, then the church only has a 3x savings fund. Note that I don't believe Quinn ever mentioned this number in the podcast, but he did say that his original prediction was only for 2010 and the number would have grown by now for sure. So if it grew to $40B then it's just over a 2x savings fund, which is an even more reasonable amount. 

Logically, I struggle with that number as only tithing.  If you assume 7.5 million active members, that comes to $4,400 per year paid in tithing for every active man, woman, and child.  If we assume that, on average, each household has 3 people then we're at $13,200 per year in tithing paid by each household.  As a global number that seems awfully high.  I wonder how Quinn arrived at it.

[Calm]

18 minutes ago, rockpond said:

If we assume that, on average, each household has 3 people t

3 people with income, I assume you mean (not including younger children, but could include grandparent; single aunt, uncle, or adult child).

Edited January 17, 2020 by Calm

[rockpond]

2 hours ago, Calm said:

3 people with income, I assume you mean (not including younger children, but could include grandparent; single aunt, uncle, or adult child).

No...  I don't think I was clear in my responses.  Let's try this:

Here's my math (and I welcome disagreement with this, it's just a guesstimate) --

Quinn says $33 billion in tithing per year.

If there are 7.5 million active members (assuming 50% activity rate of our roughly 15 million members of record) than that comes out to $4,400/yr in tithing for every active man, woman, and child.

But that's not realistic because children don't really pay a *significant* amount of tithing.  And I'd suggest that there are a large number of single-income families in the church.

So, I suggested that we assume a "household" has, on average, three individuals.  That would give us 2.5 million active "households".

$33 billion in tithing divided by 2.5 million households equates to $13,200 per year in tithing paid by each household.

As a global average, that does not seem realistic to me.  Am I way off base?  Something I've missed?  Knowing Quinn's great research skills there is a part of me that feels I should believe him on this but I don't feel like the numbers pencil out.

Thoughts?

Edited January 17, 2020 by rockpond

[Calm]

https://journal.interpreterfoundation.org/through-a-glass-darkly-examining-church-finances/

Quote

I applaud Quinn’s efforts, but my concerns involve his method and assumptions for estimating tithing receipts 1960 to 2010. Quinn used published Church data from 1950 to 1960 (121) to derive a 12.9 percent annual growth in tithing. He then applies that number to estimate Church tithing receipts from 1960 to 2010. Changes in tithing collections are a function of several variables: the annual rate of change in nominal income; the rate of change in prices (inflation), membership growth; age profiles among youth, wage-earning adults, and the elderly; and changes in voluntary compliance among members.

His calculation of a 12.9 percent growth in tithing receipts during the 1950s resulted primarily from a 5‒6 percent annual growth in  [Page 130]nominal income per capita (of which almost 2 percent was due to inflation), and about 4.2 percent growth in membership during the 1950s,13 therefore requiring only 2 percent either from increases in adult population or greater commitment to the payment of tithes.

Projecting the next 50 years based on that early decade of the 1950s involves major assumptions. During each subsequent decade, major changes took place, some of which favored Quinn’s 12.9 percent assumption, while others would bring it into question. For example, in the decade of the 1960s, membership was growing by almost 7 percent. Therefore, it would have taken small changes in inflation or income for tithing to have grown by 12.9 percent. Similarly, during the 1970s and 1980s, substantial growth of tithing was attainable but for very different reasons. Inflation almost tripled to over 6.5 percent per year, thereby requiring only small increases in income and membership for tithing to grow by 12.9 percent per year.

However, during the 20 years from 1990‒2010, inflation averaged only 2.5 percent, and growth in Church membership was falling from 6 to 4 and then to 2 percent per year. In fact, in 2016, the growth rate in membership dropped to 1.59 percent, the lowest percentage growth since 1937.14 Also, working against rapid growth in tithing receipts is the increasing proportion of members living in lower-income countries, the long trend of declining birth rates and the aging of populations.

The effect of “voluntary compliance” is the unknown in all these calculations. Quinn shows a doubling of tithing paid per capita from 1950 to 1960 (141), but this includes the income effect as well as possible increases in voluntary payments. Since we do not know the direction or amount of any change in compliance, it is best to assume that it has been constant.

Therefore, given what we know regarding the declining rates of membership, inflation, and income, it is possible that the growth rate in tithing donations fell from Quinn’s 12.9 to 8 percent 30 years later (1990‒1999) and perhaps as low as 6 percent during the next 11 years (2000‒2010). If those lower rates of tithing receipts are accurate, they [Page 131]imply that tithing in 2010 may have been closer to $12 billion rather than $33 billion.15 Such a conclusion has considerable implications for several of Quinn’s results in his Chapter 3 on Church finances.

 

[JAHS]

Apparently the Nielsen brothers are not speaking to each other now:
Twins worked together on whistleblower complaint over Mormon Church's billions, and it tore them apart

 

[The Nehor]

3 hours ago, rockpond said:

Logically, I struggle with that number as only tithing.  If you assume 7.5 million active members, that comes to $4,400 per year paid in tithing for every active man, woman, and child.  If we assume that, on average, each household has 3 people then we're at $13,200 per year in tithing paid by each household.  As a global number that seems awfully high.  I wonder how Quinn arrived at it.

There are some megawealthy members of the Church. They would throw the average way off just like a billionaire walking into an occupied football stadium would cause the average net worth of the people in the building to skyrocket. I heard from a semi-credible source that the church gets more donation money from California than it does from all of Utah. I am not sure if that is accurate but it is also not implausible.

[The Nehor]

7 minutes ago, JAHS said:

Apparently the Nielsen brothers are not speaking to each other now:
Twins worked together on whistleblower complaint over Mormon Church's billions, and it tore them apart

 

A woman starved while Lars was branch president on his mission because she wanted to pay her tithing? He blamed the church for this. Ummmmm.....isn't that kind of his fault? The job of the Bishop and Branch President is to specifically make sure that does not happen.

[rockpond]

17 minutes ago, The Nehor said:

There are some megawealthy members of the Church. They would throw the average way off just like a billionaire walking into an occupied football stadium would cause the average net worth of the people in the building to skyrocket. I heard from a semi-credible source that the church gets more donation money from California than it does from all of Utah. I am not sure if that is accurate but it is also not implausible.

Yes, I understand how averages work.

Are you saying that you think my estimate of $13,200 annual household tithing (based on Quinn's $33B estimate) is realistic?  If not, which part of my calculation do you think is wrong?

 

p.s. The claim about California is also not surprising given that CA has more than ten times the population of Utah (in addition to cost of living differences and wealth of certain areas in CA).

Edited January 17, 2020 by rockpond

[The Nehor]

15 minutes ago, rockpond said:

Yes, I understand how averages work.

Are you saying that you think my estimate of $13,200 annual household tithing (based on Quinn's $33B estimate) is realistic?  If not, which part of my calculation do you think is wrong?

 

p.s. The claim about California is also not surprising given that CA has more than ten times the population of Utah (in addition to cost of living differences and wealth of certain areas in CA).

I think it is a much smaller number of tithe payers for one. If I had to guess I would say we have 3-4 million full tithe payers so that pushes the payment per household up quite a bit. I would guess about half of active members are not full tithe payers. 

[pogi]

11 hours ago, JAHS said:

Apparently the Nielsen brothers are not speaking to each other now:
Twins worked together on whistleblower complaint over Mormon Church's billions, and it tore them apart

This makes it more clear that David was on his way out of the church.  Originally, they made it sound like David resigned from his position at Ensign previously, but it sounds more like he was terminated because his membership was in question and could no longer hold a temple recommend.  He was let go unwillingly.  That seems to have embittered him.  Only then did he team up with his brother with the intention of smearing the church and taking this public "as soon as possible".  It was only from speaking with his lawyers and finding out that the Church could go after David financially, that David decided not to go public.   His original intention was to make an impact on the level of the CES letter.  All these claims that David is the good brother, still active in the church, and had no intention of hurting the church is bogus!  His hands are dirty.  He is only acting on legal counsel.  

Edited January 17, 2020 by pogi

[Amulek]

20 hours ago, rockpond said:

The implication of the slide is that the Church is choosing to go into debt and this fund serves as collateral for that debt (among other things).

Not necessarily. Say, for example, BYU wants to take on a major, multi-year building project. The university may well have the ability to pay the annual construction costs out of its normal operating budget, but as part of the contract they might be asked to post some sort of collateral to demonstrate that they are good for the full amount.

So, rather than posting campus assets as collateral, the church has EPA post a portion of the fund's assets as collateral instead. That way, should the need arise, payment could be secured by surrendering the posted assets from the fund without impacting the assets controlled by the university. 

That seems like an eminently reasonable way to go about doing things. And it's something that happens, even according to the so-called whistle-blower, "to an insignificant degree." 

 

[Anonymous Mormon]

16 hours ago, rockpond said:

Logically, I struggle with that number as only tithing. 

I also think that the $30B in tithing alone seems high. If you take tithing, plus all other earnings (interest, investments, for-profit-companies, etc.) then this seems more reasonable.

 

16 hours ago, rockpond said:

 I wonder how Quinn arrived at it.

Here is what others say on how he arrived at it:

Quote

Quinn estimates — and estimating is about the best even a top-notch researcher can do — the church took in about $33 billion in tithing in 2010, based on a model of projected growth rates that followed a consistent pattern starting in the 1950s. It earns another $15 billion annually, he says, in returns on its profit-making investments. - https://www.sltrib.com/religion/local/2017/10/14/historian-digs-into-the-hidden-world-of-mormon-finances-shows-how-church-went-from-losing-money-to-making-money-lots-of-it/

 

Here is an interesting article from someone else who disagrees with Quinn and in their view the correct amount from tithing is likely closer to $12B p/yr than $30B p/yr:

Quote

Therefore, given what we know regarding the declining rates of membership, inflation, and income, it is possible that the growth rate in tithing donations fell from Quinn’s 12.9 to 8 percent 30 years later (1990‒1999) and perhaps as low as 6 percent during the next 11 years (2000‒2010). If those lower rates of tithing receipts are accurate, they imply that tithing in 2010 may have been closer to $12 billion rather than $33 billion.¹⁵ Such a conclusion has considerable implications for several of Quinn’s results in his Chapter 3 on Church finances.

(then from the footnote)

15. Obviously, using the 12.9 percent from 1960 to 1989, I obtain almost the same tithing as Quinn for that later year: tithing of $2.978 billion. Using 8 percent from 1990 to 1999 gives me $6.429 billion rather than his $8.872 billion. The large difference comes when you apply a 6 percent for the last decade (2000‒2010) rather than 12.9. The statistical Rule of 72 predicts that a value increasing at 12.9 percent will double in 5.6 years; therefore, $8.9 is almost quadrupling in 11 years, while increasing at 6 percent takes 12 years to double.

https://journal.interpreterfoundation.org/through-a-glass-darkly-examining-church-finances/

 

Obviously, though, the main point he made in the podcast is spot on. $7B in tithing per year is an unbacked claim by the whistle blower that seems low. But the whistle blower has a vested interest in showing a low number, because the higher the number ($12B v $20B v. $30B) the more likely for people to be understanding and accepting of a $100B savings fund. I think the reason Quinn doesn't mind the $100B savings fund is because he believes their annual income is so high, so it's appropriate to have a 3x savings fund for an organization that lives off of donations. I am sure that if Quinn thought the annual church income was only $4B, then he also would be very angry about a $100B savings fund.

I am curious if others better at math than myself want to speculate on what they think the church's annual income from tithing is?

[Calm]

13 hours ago, JAHS said:

Apparently the Nielsen brothers are not speaking to each other now:
Twins worked together on whistleblower complaint over Mormon Church's billions, and it tore them apart

 

Quote

With some lawyers suggesting the church could go after David financially, he decided he needed to accept their rules, Lars said. "David didn't want to lose his house. His big concern was his family."

Understandable that they are t speaking if Lars is okay with his brother losing his home so Lars can get off on harming the Church.

Edited January 17, 2020 by Calm

[Calm]

20 minutes ago, Anonymous Mormon said:

that followed a consistent pattern starting in the 1950s

And apparently ended in the 60s as far as records he had access to.

I have big doubts Church dynamics are that consistent 60 years later.  The interpreter article I quoted had some substantial criticism of his approach.

[Anonymous Mormon]

13 hours ago, JAHS said:

Apparently the Nielsen brothers are not speaking to each other now:
Twins worked together on whistleblower complaint over Mormon Church's billions, and it tore them apart

I find this article very saddening. I can't imagine how hard it would be to feel like my twin brother (who also appears to be a best friend) betrayed me by publishing the private information that I told him in a manner that I didn't want. I hate when I tell a person a secret and they feel it's now theirs to share freely. If I choose to share a secret, even if someone is my sounding board and listening ear, it's still my secret and not theirs to share.

Here are the saddest parts of the story to me:

Quote

[Lars said]  "They say there is a good twin and a bad twin. I disagree. But if I'm wrong, then I'm not the good twin. I'm sorry, Dave. I hope I can tell you soon."

 

Quote

Holley, his friend from Harvard, said the fracture weighs on Lars. "He said to me: 'Do you think I did the right thing by my brother?' " Holley said. "I know it's constantly on his mind."
David remains a church member who attends services and pays tithes, his twin said. A church spokesman declined to comment on David's status.

It's always sad to me when family breaks up and disintegrates. I can only imagine how uncomfortable a family reunion or Thanksgiving dinner would be (assuming it could ever again happen) not only between these two, but also for the other 8 siblings (some who have left the church and others not) and the poor parents (who someone else mentioned is serving a mission - not sure on that). What a horrible situation for these parents to have so much drama in their family.

It's sad to me when families break up over poor decisions of one or two outspoken and brash members who cause so much pain for everyone else. It's happened in my family as well. If Lars had respected his brother's wishes and they were on the same page in releasing this information, it wouldn't be near as painful for everyone involved as Lars going rogue on his twin.

[Calm]

24 minutes ago, Anonymous Mormon said:

I am sure that if Quinn thought the annual church income was only $4B, then he also would be very angry about a $100B savings fund.

He is a historian and more likely to long view I am guessing plus I don't remember him being very angry, at least publicly, about the Church, so I think that would be inconsistent for him.

I may have missed something though as I haven't studied him personally, just picked stuff up when using his research.

[Amulek]

1 hour ago, pogi said:

Originally, they made it sound like David resigned from his position at Ensign previously, but it sounds more like he was terminated because his membership was in question and could no longer hold a temple recommend.  He was let go unwillingly.

Not quite. He was merely let go early. He had put in his resignation paperwork and stated he could stay on for a couple of months, but they decided to just let him go immediately instead (technically, within a business day or two if my memory serves). 

That's really not uncommon though. If you've got an employee who is on the way out the door, sometimes it's best to just walk them on out. They gave him a month's pay and two months medical, so they didn't exactly kick him to the curb or anything. 

 

[Calm]

3 minutes ago, Amulek said:

That's really not uncommon though. If you've got an employee who is on the way out the door, sometimes it's best to just walk them on out. They gave him a month's pay and two months medical, so they didn't exactly kick him to the curb or anything. 

 

And given the documents he had, seems like an intelligent move.