whistleblower on Church finances

[Ryan Dahle]

1 hour ago, california boy said:

Are you really going to compare that to the systematic genocide of 6 million Jews?  

The historically true-to-life scenario of someone hiding Jews in a basement and of having to respond to Nazi inquiries about it, is a classic example of an ethical dilemma. It is often used in entry-level college courses to introduce the idea that some weightier moral obligations might impinge on the obligation to not lie or deceive. So, it is a common and widely-used analogy. If you read my post, in context, it should be obvious that I wasn't trying to imply some sort of equivalence between genocide and the Church's policy on finance transparency.

Note that immediately after the Nazi analogy, I follow up with a much more trivial one. The point was that in situations both grave (Jews in the basement) and less serious (personal appearance), many people feel it is morally justifiable to be less than transparent. The morality of the issue is relative or contextual, and thus we need more context to make an informed decision.  

[Ryan Dahle]

1 hour ago, california boy said:

Maybe if you could explain why you think it is better for the Church to hide how it uses Church funds is a superior moral position, I could understand your point.

My point wasn't to provide a specific defense of the Church's policy on finance transparency. The point was that we can't make an informed judgment about the morality of the Church's decision because we don't have enough information. And my point was that we shouldn't hold a default assumption that the Church's policy is wrong because there are sometimes morally justifiable reasons (hence the previous examples I provided) for not being fully transparent. And my point was that, without more information, our varying attitudes towards the matter will most likely just reflect our varying biases towards the Church. 

[smac97]

50 minutes ago, DonBradley said:

Despite what people may say about themselves, everyone does this to a great extent - chooses who they are going to trust, who they are going to rely on. Even secular humanists do. No one can master every branch of science for himself or herself and prove to their own satisfaction that the things scientists of specialties consider settled findings really are settled findings.

As you say, life is busy--there's so much going on. I think it's perfectly reasonable to trust the church's leaders when it comes to finances--particularly when they have done much to earn that trust! 

It's also quite understandable to me that people with greater interest and/or acumen in finances would give greater scrutiny to church finances.

Don

Yesterday a crew of guys started working on the roof of my home.  Prior to them doing so, I prepared a lien and liability waiver, sent it to my wife, and told her to have all the guys sign it.  I also told her to give each man a dollar.  

My wife understood the general purpose of the waiver, but not the dollars.  Nevertheless, she followed my instructions.  

I had her pay each guy a dollar in exchange for the waiver.  To be legally valid, a waiver must be supported by "consideration," or a thing of value bargained for.  That is, in order for the waiver to work, both sides have to "give" something to the transaction.  Here, the roofers were giving me a waiver of any lien or liability claim they may later seek to pursue.  In exchange, I gave them each a dollar.  

Without the bargained-for exchange (waivers for dollars), the waiver document would likely not have been enforceable.  I was away from home, and so did not really have time to explain to my wife the importance of the dollars.  I just asked her to do it, and she trusted me.  I explained the purpose of it last night, by which point the roofers had already been up on my roof.  In other words, the trust needed to come first.  I needed the waiver signed and the dollars given, and I asked my wife to trust me on that.  She did.  So by the time the roofers were up doing their work, by the time the risk of a liability-causing incident could have happened, we were protected by the waiver.  Because my wife trusted me.

Don is right.  Trust is important.  Trust is reasonable, particularly where there is no apparent indication that trustworthiness is lacking, and where there is substantial evidence that trustworthiness is present.  Trust is also reasonable because, as Don notes, we all can't be experts in everything.

That's how I feel about the leaders of the Church and their oversight of the Church's finances.  Broadly speaking, I trust them.  I give them the benefit of the doubt.

Thanks,

-Smac

Edited December 19, 2019 by smac97

[rockpond]

4 hours ago, pogi said:

That doesn't really follow the injunction of Malachi 3:10:

Neither does putting tithes and offerings into Ensign Peak Advisors.  I'm trying to understand the difference between my hypothetical and EPA.

4 hours ago, pogi said:

Also, tithing is used for much more than the rainy-day fund.  The vast majority is used for the daily operations of the Church, so if members didn't give, the Church wouldn't have funds to operate.

So if I did my hypothetical plan with 1/7th of my tithes and offerings, is it then acceptable?

4 hours ago, pogi said:

Also, in the chance that the Church needs to use the fund in emergency, could you imagine how in-efficient it would be to try and collect those funds from members who have their own private funds.  

Probably about as easy as getting it out of City Creek and Beneficial Life.

[rockpond]

4 hours ago, Calm said:

I don't think it is all that helpful to do an average when the wealth of the Church has grown, so it really isn't an accurate percentage to do an average over 35 years and then compare it to today's assets (to the best of our knowledge).  Half of that (one billion) might have been provided in the last five years, for example.  Also their method of helping might have changed as well, in the past collecting and giving out more material goods which may not have been included in the dollar amount in this quote where now due to increased speed and different needs, money is sent to local charities that they buy needed goods and hand them out (when Sharon Eubank gave her FM presentation several years ago, it sounded like she was talking about a method change when she explained that they had done this recently for a crisis in Turkey iirc).

Not sure how to adjust to find some sort of semiaccurate percentage of current aid going out given we don't know the amounts, I just think we need to include caution in presenting a picture that implies the Church is somehow not responsive to a changing picture.

I agree that the amount contributed has likely not been the same every year.  Hopefully it has increased over those 35 years.

If the Church is purchasing material goods and donating those, than it seems like they would count that expense in the number quoted by President Nelson.  But I guess church leaders would have to clarify that for us.

 

[smac97]

14 minutes ago, Ryan Dahle said:

Quote

Are you really going to compare that to the systematic genocide of 6 million Jews?  

The historically true-to-life scenario of someone hiding Jews in a basement and of having to respond to Nazi inquiries about it, is a classic example of an ethical dilemma. It is often used in entry-level college courses to introduce the idea that some weightier moral obligations might impinge on the obligation to not lie or deceive. So, it is a common and widely-used analogy. If you read my post, in context, it should be obvious that I wasn't trying to imply some sort of equivalence between genocide and the Church's policy on finance transparency.

Note that immediately after the Nazi analogy, I follow up with a much more trivial one. The point was that in situations both grave (Jews in the basement) and less serious (personal appearance), many people feel it is morally justifiable to be less than transparent. The morality of the issue is relative or contextual, and thus we need more context to make an informed decision.  

😁

-Smac

[rockpond]

2 hours ago, Nofear said:

The investments of the Church do not sit idle. Some of it goes to A) charitable causes and some of it goes back into B) reinvestment. Increasing the amount of B) in the long term gives a larger outlay of A) in the long term. I don't think anybody disagrees with the right and wisdom of the Church to invest. Much of the shock is how much the Church has (and certainly not all of it is in Ensign Peak Inc.) but disagreement on the ratio of A/B. In my opinion, much of that disagreement is naive.

Example: I have $10 available for a charitable cause

Case 1: give $10 now and be done.
Case 2: give $8 now and invest the remaining $2 and give an additional $4 later (for a total donation of $12).
Case 3: give $2 now and invest the remaining $8 and give  an additional $16 later (for a total donation of $18).
Case 4: give $0 now and invest the $10 and give $20 later.

Which is right? Of course it is more complex than that, but in many respects, not really. Could the Church be more transparent in its choices. Sure. I wouldn't be bothered if it did. Though, I imagine the arm-chair quarter backing by the nay-sayersof the world (and some of the faithful) would be more than a little tiresome at some point and so don't hold it against the Church too much for being more than a little timid about releasing its financial choices. I expect after this brouhaha the Church will dip its toes into being more transparent to see if it can tolerate the inevitable din and clamor that will result.

According to Nielsen's allegation, the Church (through EPA) is doing "Case 5: give $0 now and invest the $10.  Give $0 later and keep reinvesting your dividends in perpetuity."

[rockpond]

1 hour ago, kimpearson said:

I am curious if the members of this group believe God would allow leaders of the Church to make major mistakes.  For example, I have no problem with a reserve fund but would it be possible that while the original prompting to establish a reserve was from God, God expected his leaders to use their own wisdom and knowledge to determine when the reserve was large enough and then use the funds elsewhere.  Then human beings being human, those leaders incorrectly let the reserve get too big.  Like any mistake we make, such mistakes often lead to consequences that demonstrate the mistake, in this case, someone with at least some knowledge of the facts becomes disillusioned and calls attention to the situation.  Was it a mistake to hold the priesthood from our black brethren as long as we did?  Was the Indian placement program a mistake?  Or back to my original question, do you believe God would never allow the leaders of the Church to make a major mistake?

Personally I believe God does allow major mistakes because we, including leaders, would never be able to exercise true free agency if we know God was always going to stop any major mistakes.  I think our scriptural history backs me up on that belief.  I also believe that our modern church leaders have demonstrated an ability to overcome those mistakes and move on.  I actually think those major mistakes are part of the test of what we truly believe in.  

Yes, God certainly allows leaders of the Church to make major mistakes.  We've seen it a number of times in our history.

[pogi]

54 minutes ago, rockpond said:

Neither does putting tithes and offerings into Ensign Peak Advisors. 

The Church's holdings are equivalent to the Lord's storehouse. 

54 minutes ago, rockpond said:

So if I did my hypothetical plan with 1/7th of my tithes and offerings, is it then acceptable?

I guess you would have to talk to your bishop about that.  Not my call.  I would suspect not, as I don't think you have been given keys or authority to take or manage sacred tithes - it is not for you to invest and borrow against for personal gain. 

54 minutes ago, rockpond said:

Probably about as easy as getting it out of City Creek and Beneficial Life.

Probably, but these entities are not intended to be used fore that purpose.  It is claimed that we have 100 billion in case of emergency, but with your hypothetical, it could all be tied up elsewhere. 

Edited December 19, 2019 by pogi

[Teancum]

On 12/17/2019 at 2:19 PM, juliann said:

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

How so?

[Teancum]

On 12/17/2019 at 2:25 PM, 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.

 

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.

Sure....but they don't tell those of us who contribute either.....

[Bernard Gui]

2 hours ago, The Nehor said:

I am guessing the reason for that policy was abuse of the copier. I have spotted way too many people using the church copier for garage sale flyers, school assignments, and to print resumes. For the first two just go print it at work like a normal person.  

We recently got a replacement copier/printer in our library. Sounded nice and we are told it was a bargain but then found out the toner costs way too much. I was hoping to get some new equipment for the library and the clerk’s office at the end of the year but then we found out we were moving to a different chapel in January and have expenses from that and then the stake cut our 4th quarter allocation just like last year and now we may go over budget. Ugh!

Churches generally all get the same budget per head based on attendance as every other ward in the same region or country. The only difference is how much of that allocation the stake takes and that is entirely at their discretion. If a ward seems to have a ton of money for certain activities it is almost certainly because someone in the ward is voluntarily paying out of pocket.

And a member can request reimbursement from the ward budget for out-of-pocket expenses.

Edited December 19, 2019 by Bernard Gui

[Analytics]

1 hour ago, Calm said:

When it is about a rainy day/emergency fund, there is a difference between how much the local soccer club needs and a 15 million member (5 million likely active) global organization needs.  Pogi is simply suggesting we look at the amount in the correct context before making a judgment.

The Church has 30,500 wards and branches. So, a $100 billion rainy-day fund is about $3.3 million per congregation. Do you think that is a fair way to look at it, and if so, do you agree with Pogi that $3.3 million per congregation isn't that significant of a rainy day fund? In your judgment, how high should it be?

[Danzo]

1 hour ago, Tacenda said:

Maye watch this video to see exactly what it means. I'm pretty inept at all things law. 

Maybe instead of claiming that your are inept at all things law, you could devote some time and actually learn something from people who know about the law.

It might be useful.  Maybe you could use the knowledge to start your own charity and do things in a better way.

These people don't appear to be experts (or even use experts). I would suggest consulting with actual experts.

you can start with Publication 1828. Tax Guide for Churches & Religious Organizations

Its only 40 pages, so it should take less time than watching that video. You will probably learn more.

Anyway on page 19 you can find out that

"In general, rents from real property, royalties, capital gains, and interest and dividends aren’t subject to the unrelated business income tax unless financed with borrowed money."

 

 

[Teancum]

On 12/17/2019 at 2:30 PM, smac97 said:

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

Thanks,

-Smac

I have to comment on the fast offering comments. There is evidence. As a bishop I knew exactly how much we took in and how much went out. Our ward typically had about $30k of FO contributions and paid out $45k per year. So we ran a deficit. We were encouraged by our stake president to try to at least break even. But if we could not we were not chastised. For the stake if wards had a deficit the stake could kick in if it had a surplus.  If not the Church headquarters would kick in. So while this is not info on the whole church I have wondered how much FO assitance goes out per year.  I think it is at least $500 million. How much the church headquarters pitches in I do not know. I bet it is a lot. And it is one of the best welfare programs on the planet.  And this is from a now disaffected skeptic.

[CA Steve]

3 hours ago, pogi said:

That is only around 6-7 thousand each.

Depending on how much money you make now, you could take a pretty hefty reduction in income. 

I was posting from my phone and for some reason my emoji didn't go through. It was not meant to be a serious post per se,  just an observation on the level of funds we are looking at. 

 

Edited December 19, 2019 by CA Steve

[Teancum]

On 12/17/2019 at 2:33 PM, 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.

Deleted because I misunderstood the quote above.

Edited December 19, 2019 by Teancum

[Amulek]

6 hours ago, california boy said:

My point is, the Church has the ability to correct any false or misleading statements.  They also have to decide if doing so is in their best interest.  

The church has already decided that it is in its best interest to not add fuel to the story. They are happy to talk to the IRS, but they aren't interested in having an ongoing, public dialogue on the matter. For what it's worth, I think that's the right decision. 

 

Quote

Until then, most people will probably believe the 100b number that has been reported.

Fine by me. Perhaps when shown that they are mistaken about that particular "fact" (an easy task), they will perhaps be a little more skeptical about uncritically accepting everything else that they heard from that same source. 

 

Edited December 19, 2019 by Amulek

[Nofear]

53 minutes ago, rockpond said:

According to Nielsen's allegation, the Church (through EPA) is doing "Case 5: give $0 now and invest the $10.  Give $0 later and keep reinvesting your dividends in perpetuity."

That the Church factually donates quite a bit to charitable causes belies that assertion. I see little reason it would funnel those donations through EPA. That would be silly.

Edited December 19, 2019 by Nofear

[JAHS]

From Jack Jenkins - Religion News Service

But theological justifications are unlikely to matter, said Sam Brunson, author of “God and the IRS: Accommodating Religious Practice in United States Tax Law.”

“From a tax perspective, if Ensign Peak Advisors makes that assertion, it doesn't have any tax relevance,” he said.

Instead, Brunson explained that one of the core issues embedded in the complaint is that the church uses a separate entity — Ensign Peak Advisors — to hold its funds.

Storing money is not atypical for a religious entity like the LDS church. Many charities hold onto money themselves or make use of traditional outside investment funds: Harvard University is known for a $41 billion endowment, for instance, and has been referred to by The Nation as “a hedge fund with a university attached.”

According to Nathan Oman, a professor at William and Mary Law School and an expert in LDS church legal history, the church’s habit of aggressive saving emerged from a series of financial near-calamities.

“At various points in its history, the Mormon church has had financial difficulties and were not able to meet expenses out of revenues,” he said. “Forecasting costs and controlling costs were things that (church leaders) weren't really good at doing yet.”

Brunson noted that the mid-20th century is also when the church became more circumspect about revealing details of its finances. Oman explained that it was around this same time — in the late 1960s — that Nathan Eldon Tanner, a former legislator in Alberta, Canada, was called upon to help the church remain financially solvent.

“(Tanner) put in place three basic principles of financial management for the church,” said Oman, who is Mormon. “The first principle is they never spend more money in a given year than they take in tithing revenue. The second principle is you never borrow money. And the third principle is you take part of your tithing donations every year and you put them in a rainy day fund for the future.”

But according to the whistleblower complaint, the way the LDS church is currently storing money is unusual. Ensign Peak Advisors is designated as a supporting organization and integrated auxiliary of the LDS church and is granted tax-exempt status.

In a blog post for the Mormon website By Common Consent, Brunson explained that Ensign Peak Advisors falls under a murky category for the IRS. The agency has granted tax exemptions in the past to money-holding organizations whose sole purpose is charitable, but only if the funds they eventually dole out are “commensurate in scope with its financial resources.”

“The IRS has never said what ‘commensurate in scope’ means,” Brunson said, noting that some interpretations would argue that Ensign Peak Advisors had run afoul of tax law.

Philip Hackney, a law professor at the University of Pittsburgh and a former IRS official, said the report may evoke debate over whether religious groups should be allowed to retain massive endowments without disclosing them.

“I think the endowment is a live a question for society, in terms of what an endowment in a charitable solution is for,” he said.

However, even if the IRS came down on the group, Brunson downplayed the potential repercussions of the complaint. He said Ensign Peak Advisors likely accrued most of its money in time periods that fall beyond the statute of limitations for such cases, limiting the impact were it to be stripped of its tax-exempt status.

"Even if there is something there, there's not a lot of revenue for potentially a lot of work," he said. "This probably isn't something that's going to be on their plate."

Brunson expressed doubts the IRS will take any action at all.

“Frankly, the IRS has been underfunded and understaffed for 15 years at least,” Brunson said.

Hackney agreed, although he noted that could change if IRS officials found evidence of impropriety in transactions not detailed in the whistleblower report.

“If they were to find something problematic with spending out money to for-profit entities, that could be a different issue,” he said. “I think that's another can of worms.”

In the meantime, Brunson suggested increased transparency regarding church finances. He pointed to the Evangelical Council for Financial Accountability, an evangelical Christian organization that outlines guidelines for churches regarding financial accountability, transparency, fundraising and board governance.

“I don't think it would be a bad idea for the Mormon church, and frankly other churches, to follow that,” he said.

[Bernard Gui]

35 minutes ago, Analytics said:

The Church has 30,500 wards and branches. So, a $100 billion rainy-day fund is about $3.3 million per congregation. Do you think that is a fair way to look at it, and if so, do you agree with Pogi that $3.3 million per congregation isn't that significant of a rainy day fund? In your judgment, how high should it be?

What does it cost to replace a chapel destroyed by natural or man-made causes?

[Garden Girl]

This business of $100B doesn't bother me one bit, yet others are ready to leave the Church... On a personal level, I have a separate fund that I have built up to use for emergencies, special expenses. etc.  After I pay tithing and my expenses for the month I add as much as possible to the fund... for example, to use for unplanned or unexpected expenses such as a new roof, brakes, tires... each time such expenses have come up ($9,000 roof, $300+ brakes, $650 tires etc etc) because I put aside funds that I don't touch unless emergency, I was able to write out the checks without skipping a beat.  Don't others do the same thing?  It's prudent to do so...   

GG

[Analytics]

1 hour ago, rockpond said:

According to Nielsen's allegation, the Church (through EPA) is doing "Case 5: give $0 now and invest the $10.  Give $0 later and keep reinvesting your dividends in perpetuity."

That is certainly true when you look at EPA in isolation. When you look at the church as a whole, it is more like this:

Case 1: give $10 now and be done.
Case 2: give $8 now and invest the remaining $2 and give an additional $4 later (for a total donation of $12).
Case 3: give $2 now and invest the remaining $8 and give  an additional $16 later (for a total donation of $18).
Case 4: give $0 now and invest the $10 and give $20 later. 
Case 5: give $8 now, invest the remaining $2, and never give an additional anything later (for a total donation of $8)

Case 5 is what the Church does, and after 65 years or whatever it's been since N. Eldon Tanner established #5 as the Lord's way, those $2 add up to a couple hundred billion and the issues we are now discussing.

 

[Amulek]

17 hours ago, Tacenda said:

Maybe watch this video to see exactly what it means. I'm pretty inept at all things law. 

I wouldn't say "inept." I think "ignorant" (in an authentic, non-pejorative sense) would perhaps be a more appropriate description.

And you wouldn't be alone. Lots of people are ignorant about the law, and lots of people are ignorant about tax, so it shouldn't be surprising that lots of people are ignorant about tax law.

Which, to be frank, is what the cohorts behind the leak are counting on. 

They are counting on you not knowing enough to find the flaws in their arguments or to see the defects with their "evidence." 

As I said before, the only thing really clever thing that these brothers have done is to insulate themselves from liability by publishing the information from their leak in an IRS whistleblower complaint.

It allows them to put the information they wanted to leak out into the public sphere, get their 15 minutes of fame and, after the IRS determines that nothing shady was going on (if it even bothers to look), make use of the protections offered under the government's whistleblower laws which, according to precedent, protect a whistleblowers reasonable but mistaken belief that the conduct complained of constituted a violation of relevant law.

 

Edited December 20, 2019 by Amulek

[pogi]

45 minutes ago, Analytics said:

The Church has 30,500 wards and branches. So, a $100 billion rainy-day fund is about $3.3 million per congregation. Do you think that is a fair way to look at it, and if so, do you agree with Pogi that $3.3 million per congregation isn't that significant of a rainy day fund? In your judgment, how high should it be?

Again, if the reserve was divided evenly between members (not counting non-members needing help within ward boundaries) it would come to about 6 1/2 thousand each.  You can try and present those figures to appear significant in which ever way you want, but that is what it comes down to on an individual level. I personally wouldn't feel comfortable depending on that as a rainy day fund.