The Church as the 5th Largest Private Landholder in U.S.

[gav]

43 minutes ago, carbon dioxide said:

Then the Great Depression 2.0 begins.  High chance of this happening within 10 years. 

Major trigger mid 2024... It's written in the stars.

[gav]

8 hours ago, LoudmouthMormon said:

The whole topic makes me think of what things will look like, if we have another deep depression like the '20's and '30's.  Can you imagine communities where church owns property doing better than the rest of the country?  I can.

Not "if" but "when"

[gav]

4 hours ago, mfbukowski said:

I sure hope so.  That means those BYU boys are doing their jobs.  That is your entire goal as an investment manager.  And right now, real estate is the ONLY place to put your money right now.  I am in the business and after 3 of these debacles, this one is going to be BAD.  Free and clear income producing property is the place to be.  Let inflation rise, let the dollar drop, you have REAL property there - two senses -that hold the earth together.   In the early 80's when property swaps were popular you could use a desert lot in the middle of nowhere (geographic center of nowhere- prime real estate! ) as a down payment on, say, a triplex in the city and people would readily take it to get out their -literally true- 18-20 percent loan.   Cash was and is, king.   We're not there yet, but it CAN happen again.

We have Zion to build during the Millenium.  If we are NOT doing better than the rest of the country- how can we help them?   How can we feed clothe and shelter others if we are as bad off as they are? 

I sure hope we can turn up the fire on helping folks that really need it, because it is going to be nasty.

Productive land is key

[smac97]

3 hours ago, Scott Lloyd said:

Does this mean you support the removal of the Church’s tax-exempt status?

No.  

[The Nehor]

4 hours ago, mfbukowski said:

Nevermind.

You are fully informed, didn't know it was a "gotcha" attempt 

It can be two things.

[The Nehor]

3 hours ago, Scott Lloyd said:

You seem cavalier about a “stock market tumble.” Do you realize that many in “the working classes” rely on employer-assisted investment programs to ensure their survival in retirement? 

They do, which is kind of insane. The idea that the big imaginary numbers will continually go up and basing everyone’s survival in old age on that is even more insane.

3 hours ago, mfbukowski said:

I have friends who now have been working extra years because of the last "tumble".

Yep, it is kind of stupid since it is not inevitably and continually going to keep going up forever but our well-being is based on it not only increasing but it must increase by a large enough amount or everything falls apart.

Also, as bad as the stock market falling might be for many (including myself) I think the current labor shortage will (hopefully) do enough good to make up for it. That wealth gap fueling our self-destruction isn’t going to close itself.

[The Nehor]

1 hour ago, gav said:

Major trigger mid 2024... It's written in the stars.

The stars have better things to do than predict Dow Jones numbers.

[The Nehor]

3 hours ago, bluebell said:

They are predictions but not absolutes.  Inflation and interest rates are a big enough issue that a recession wouldn't be a surprise.  But who knows.  Are other economists and people in the know saying that a recession is unlikely?  I haven't looked into it.

There are some. Part of this is inevitable due to the wealth gap, the continued fallout from Covid, and the like. The only thing we have going for this is hopefully some solid wage growth. Ironically wage growth in the lowest economic demographics is what fuels the economy. We stopped fueling it so some people could stockpile even more fuel and then act shocked when the engine is having trouble running.

[gav]

14 minutes ago, The Nehor said:

The stars have better things to do than predict Dow Jones numbers.

Yup, like the turn of an age or the arrival of Black Swans.

Edited December 9, 2022 by gav

[The Nehor]

1 minute ago, gav said:

Yup, like the turn of an age.

I was thinking they would be more interested in fusing Hydrogen into Helium.

[gav]

5 minutes ago, The Nehor said:

I was thinking they would be more interested in fusing Hydrogen into Helium.

Individually yes, but as a group "for signs, and for seasons, and for days, and years:"

[Nofear]

Detractors of the Church see this kind of stuff and be like "huge tracts of land"!

[JLHPROF]

12 hours ago, The Nehor said:

Why is there an assumed impending recession?

I'm praying for one.  Hoping for a major housing crash.  It'll be the only way I and many other families will ever be able to afford homes.

[Kenngo1969]

17 hours ago, Stargazer said:

One man's "recent" is another man's "yesterday."

Especially the older one gets!   (For the record, I'm talking about me, not you ... I'm an ancient 53 ... you're a young older-than-me-but-however-old-you-are!)    

[Kenngo1969]

24 minutes ago, JLHPROF said:

I'm praying for one.  Hoping for a major housing crash.  It'll be the only way I and many other families will ever be able to afford homes.

I'm with you there, Brother.  (Not necessarily praying for a crash because I have pending housing arrangements that I hope will make one unnecessary, but, if I understand the sentiment, and if it weren't for those pending arrangements, I would probably never make it into a house of my own.)

[Kenngo1969]

17 hours ago, LoudmouthMormon said:

Heh - something else that humans always do - someone sees a group of people doing well, and try to figure out ways to get a piece of the action.  Taxing is an excellent way, when outright theft or lawsuits aren't feasible.

Either they try to get a piece of the action, or they say, "If I can't be [x, e.g., rich] then nobody should be able to be!"  I think the latter is the much more common reaction, unfortunately.

[Stargazer]

17 minutes ago, Kenngo1969 said:

Especially the older one gets!   (For the record, I'm talking about me, not you ... I'm an ancient 53 ... you're a young older-than-me-but-however-old-you-are!)    

I'm a rather young-looking 71. Apparently. When I told someone how old I was the other day, he was amazed. I guess I don't have enough wrinkles.

[Kenngo1969]

1 minute ago, Stargazer said:

I'm a rather young-looking 71. Apparently. When I told someone how old I was the other day, he was amazed. I guess I don't have enough wrinkles.

Well, I don't have wrinkles, but wrinkles aren't why I'm ancient.  

 

[Stargazer]

11 hours ago, mfbukowski said:

I have friends who now have been working extra years because of the last "tumble".

They're probably smarter than many, no matter having to work extra years. And the extra years was not necessarily caused by their lack of wisdom, but of pesky bad luck and timing. Which anyone can fall prey to.

I'm retired and half my income is social security. A bad situation, truly, because who wants to be dependent on that? The other half is a traditional pension plan from a state government. And I was stupid enough to think that was enough, and so didn't make any other provisions. I won't claim to be a genius, but I'm smart enough. Nevertheless I never thought far enough ahead to consider I ought to have been putting money away in an IRA. So I was stupid.

 

[Stargazer]

8 minutes ago, Kenngo1969 said:

Well, I don't have wrinkles, but wrinkles aren't why I'm ancient.  

 

Your avatar image doesn't seem particularly old, but then again, I'm not a space telescope, either!

[Stormin' Mormon]

13 hours ago, Analytics said:

The Church takes in about $7 billion a year in tithing, and operates the church on about 90% of that. 

In other words, the Church's primary mission is to operate the Church.  

 

[Scott Lloyd]

9 hours ago, The Nehor said:

They do, which is kind of insane. The idea that the big imaginary numbers will continually go up and basing everyone’s survival in old age on that is even more insane.

Yep, it is kind of stupid since it is not inevitably and continually going to keep going up forever but our well-being is based on it not only increasing but it must increase by a large enough amount or everything falls apart.

Also, as bad as the stock market falling might be for many (including myself) I think the current labor shortage will (hopefully) do enough good to make up for it. That wealth gap fueling our self-destruction isn’t going to close itself.

The last historically high market return was in January of this year — meaning that, going back to the beginning, a recovery has followed each and every downturn. 
 

The fact that you choose now to be fatalistic about the long-term health and survival of the market and appear to blithely dismiss such a catastrophe as not worth worrying about is what strikes me as insane. 

Edited December 9, 2022 by Scott Lloyd

[smac97]

14 hours ago, Analytics said:

Quote

And since neither the Brethren nor anyone else are enriching themselves via the Church, the returns can be spent for the benefit of members and society in general.  I think that's pretty cool.

Sure. But even though it could use the returns for the benefit of members and society in general, is that what it actually does?

Yes.  

14 hours ago, Analytics said:

Or does it use virtually all of the returns to build up more wealth?

No, it does not do that.  

And again, the nature and beneficiaries and usages of that wealth need to be addressed.  Neither the Brethren nor anyone else are enriching themselves via the Church and its "wealth."  I find that to be a very significant consideration, worth far more of an assessment than "Sure."

14 hours ago, Analytics said:

The Church didn't become obscenely wealthy because it uses its income for philanthropic/humanitarian purposes.

The Church became obscenely wealthy because it uses virtually all of its investment income to generate more and more wealth.

Dan Peterson makes a rather trenchant point here:

Quote

I note with interest (pun not entirely unintentional) the figure that has been bandied about by the “whistleblower” and his anti-Mormon activist brother and various controversialists:  If I’m not mistaken, they say that the Church takes in approximately seven billion dollars annually in tithing, and that it spends six billion of those dollars on temples and chapels and humanitarian aid and educational subsidies and the like, while putting one billion dollars aside each year for a “rainy day” fund.

By my calculation, that has the Church saving or investing just slightly less than 14.3% of its annual income.  Some critics regard that as exorbitant, unchristian, immoral, and possibly illegal.

But it doesn’t seem exorbitant or excessive to me.  It appears that the Church is simply following its own counsel, given to its members for many generations, on prudent or provident living.

That perpetuation of the Church's existence and function is essential.  The Church will continue to exist next year, and the year after that, and the year after that, because it is spending the bulk of its income, apparently around $6 billion dollars, "on temples and chapels and humanitarian aid and educational subsidies and the like," and investing 14.3% of its income.

If you as an individual were to not spend any resources on yourself and your family, and instead donated 100% of your means and property to others, that would be admirable in a sense.  But you would then be without food, clothing, shelter, and other necessaries.  The chances of you being able to maintain that 100% level of donations over any appreciable term would be, essentially, zero.

I suspect you do not do this.  And I do not blame or fault you, or think less of you for it.  If you give away 100% of your means today, you will have nothing to give away tomorrow, nor will you have means to support yourself and your family.  

So the question is really more one of degree.  How much should the Church donate to "philanthropic/humanitarian purposes" today compared to how much it should use to grow and strengthen its financial health for the long term.  Most people only need to think of themselves, and only for a few more decades, and make financial plans accordingly.  The Church, on the other hand, is coming up on 200 years old, and needs to be thinking ahead for quite a bit longer.  From the article in the OP (quoting Patrick Mason) :

Quote

“They’re not just thinking about next year or five years from now. They’re thinking about 50 years from now.”

Yep.

In October we discussed an article about the Church's finances in and from Canada, which included quotes from a fellow who, like you, waxed indignant about the Church's resources.  He felt that the Church should spend more of its money on education in Canada.  

Meanwhile, the article also discusses various other American schools who have received donations from Canadians, including Harvard (endowment: $53 billion), Stanford (endowment: $37 billion), Brown (endowment: $7 billion), Columbia (endowment: $14 billion), Cornell (endowment: $10 billion), Dartmouth (endowment: $8 billion), Princeton (endowment: $37 billion), Pennsylvania (endowment: $20 billion), Yale (endowment: $42 billion), Berkeley (endowment: $6.8 billion), Loma Linda University ($461 million), Yeshiva University (endowment: $814 million).

No mention of this guy getting all hot and bothered by Canadian dollars being donated to these institutions, which dollars also "{don't} do anything to alleviate the financial strain of provincial and federal governments in Canada."

No mention of you, who started that thread, getting hot and bothered by the foregoing endowments, either.  I find that . . . interesting.

And then there was our December 2021 discussion of Jeff Green, the billionaire and former member of the Church who publicly faulted it for doing with its wealth what he is doing with his.  From my comment:

Quote

4. I think his criticism of the Church's finances is . . . interesting.  He has amassed for himself a fortune worth billions, and also "worries about the faith’s transparency around its history and finances," but I don't see much in the way of financial "transparency" from him.  So I guess "transparent financials for thee, but not for me" is the way of things.

5. Mr. Green "has pledged to donate 90% of his estimated $5 billion fortune, starting with a $600,000 donation to the LGBTQ-rights group Equality Utah."  Huh.  He is "starting" his philanthropy with a $600K donation, which works out to about .012% of his $5 billion fortune.  I suspect he has done more, but it sure is easy to sit back and second-guess and find fault with his charitable inclinations.  Kinda like how he and so many others have done with the Church.

6. Mr. Green decided "last month" to take the "Giving Pledge, vowing to donate more than 90% of his wealth before or at the time of his death."  Last month.

I admire the sentiment , but the "pledge" allows him to keep his billions for most or all of the rest of his life and then, having lived a life of opulence, give it away "before or at the time of his death."  He reserves to himself his billions, and all the benefits that derive therefrom, but then presumes to judge the Church's handling of its finances.  And unlike him, the Church's wealth is held in trust, and used to benefit the members and the rest of the world.  

There is a strong bit of irony here.  If Mr. Green had divested himself of his billions now, then he would be in a better position to criticize the Church's retention and long-term management of its funds.  Instead, his plan seems to be not a whole lot different from what the Church is doing: managing accumulated wealth with the long-term goal of it going toward worthy causes.  So why is it okay for him to do this with his money (all the while living the life of a literal billionaire), but awful and terrible when the Church does it?

7. Given the number of news items, I suspect this "story," such as it is, was an orchestrated PR event.  

No words of opprobrium from you for Mr. Green, either.  To the contrary, you defended him:

Quote

Green's plan is to give away 90% of his fortune by the time he dies. The Church's plan is to invest 15% of its tithing revenue into Ensign Peak Advisors and use whatever's left to run the Church and support charitable causes. The Church and Jeff Green have two fundamentally different plans.

"90% of his fortune by the time he dies."  Meanwhile, however, he will get to enjoy being - to use phrasing you seem to only reserve for the Church - "obscenely wealthy."  And you have no problem with that.  You have no problem with him retaining all that obscene wealth rather than distributing it now.  

Meanwhile, in 2021 Green was paid $838 million for his job of CEO of TradeDesk, making him "the highest-paid CEO across the 358 firms in the S&P 500."  Boy, imagine if he gave away 90% of that wealth now, or even all of it (he already has a few billion in the bank, after all).  

He has also started the Jeff T. Green Family Foundation, which describes itself as follows:

Quote

All humans deserve an equal opportunity to live, learn, participate and contribute. Long-term inequality, however, often begins with disparity of opportunity. At the Jeff T. Green Family Foundation, we apply data science to understand key moments where innovative interventions might remove obstacles to opportunity. Our initiatives are measurable, provable, and ultimately scalable, helping us move from trials to large-scale programs rapidly and with high impact, engaging a broad and active group of supporters and stakeholders. 

I thought this was admirable:

Quote

The Jeff T. Green Family Foundation will initiate, invest in and fundraise for programs that are verifiable with data, easily scalable and repeatable, and drive large scale activation and engagement.

For example, in 2019 Jeff started collaborating with Cal State Channel Islands to understand why students, especially minority students, dropped out prior to graduation. Data suggested that a single drop/fail/withdrawal grade as a freshman dropped the graduation odds to 60%. Two such grades dropped the odds to 40%. To address this, Jeff invested in a pilot freshman intervention program, enabling successful upper classmen to mentor freshmen students to avoid those problematic grades. As a result, the school has seen a double-digit increase in graduation rates among mentors and mentees. In 2020, The Jeff T. Green Family Foundation increased its investment to scale this program across Cal State Channel Islands.

Every single dollar spent by this foundation could instead be donated now.  To buy food for starving orphans, wheelchairs for paraplegics in developing countries, vaccines, you name it.

Here, though, Green's foundation seems to have a longer-term "to teach a man to fish is better than giving the man a fish" approach.  I very much admire that.  

I guess long-term planning and philanthropic efforts are yet another "It's only bad when the Mormons do it" or "'That's different because shut up,' he explained" kind of things.

14 hours ago, Analytics said:

The Church became obscenely wealthy because it uses virtually all of its investment income to generate more and more wealth.

It bears repeated emphasis that nobody - no biological person - is becoming wealthy, let alone "obscenely" so, by accessing the Church's coffers.

I also note that unlike Mr. Greene the Church is situated differently because it intends to exist in perpetuity.  Perhaps this difference in circumstance, this need for the Church to be "thinking about 50 years from now," ought to be part of the discussion.

Consider Chuck Feeney, for example.  What an amazing fellow:

Quote

Charles Francis Feeney (born April 23, 1931)^[1] is an Irish-American businessman and philanthropist who made his fortune as a co-founder of the Hong Kong based Duty Free Shoppers Group. He is the founder of The Atlantic Philanthropies, one of the largest private charitable foundations in the world. Feeney gave away his fortune in secret for many years, until a business dispute resulted in his identity being revealed in 1997.^[2] Feeney has given away more than $8 billion.^[3]
...
Feeney was born in New Jersey during the Great Depression and came from a modest background of blue collar Irish-American parents in Elizabeth, New Jersey.^[3] His mother was a hospital nurse, and his father was an insurance underwriter.^[4] His ancestry can be traced to County Fermanagh in Northern Ireland. Feeney graduated from Elizabeth's St. Mary of the Assumption High School in 1949; he has credited his charitable spirit to his education at St. Mary. His 2016 donation of $250,000 was the largest in the school's history from a single contributor.^[5] He served as a U.S. Air Force radio operator during the Korean War, and began his career selling duty-free liquor to U.S. naval personnel at Mediterranean ports in the 1950s.^[6]

He graduated from the Cornell University School of Hotel Administration.
...
In 1982, Feeney created The Atlantic Philanthropies, and in 1984, secretly transferred his entire 38.75% stake in DFS, then worth about $500 million, to the foundation. Not even his business partners knew that he no longer personally owned any part of DFS.^[11] For years, Atlantic gave away money in secret, requiring recipients to not reveal the sources of their donations. "Beyond Mr. Feeney's reticence about blowing his own horn, 'it was also a way to leverage more donations—some other individual might contribute to get the naming rights.'"^[3] The largest single beneficiary of Feeney's giving is his alma mater Cornell University, which has received nearly $1 billion in direct and Atlantic gifts, including a donation of $350 million enabling the creation of Cornell's New York City Tech Campus on Roosevelt Island.^[12] Through Atlantic, he has also donated around one billion dollars to education in Ireland, mostly to third-level institutions such as the University of Limerick and Dublin City University.^[1] Feeney has given substantial personal donations to Sinn Féin, a left-wing Irish nationalist party that is historically associated with the IRA.^[2] He has also supported the modernization of public-health structures in Vietnam.^[11]

In February 2011, Feeney became a signatory to The Giving Pledge.^[13] In his letter to Bill Gates and Warren Buffett, the founders of The Giving Pledge, Feeney writes, "I cannot think of a more personally rewarding and appropriate use of wealth than to give while one is living—to personally devote oneself to meaningful efforts to improve the human condition. More importantly, today's needs are so great and varied that intelligent philanthropic support and positive interventions can have greater value and impact today than if they are delayed when the needs are greater."^[14] He gave away his last $7 million in late 2016, to the same recipient of his first charitable donations: Cornell. Over the course of his life, he has given away more than $8 billion.^[3] At its height, Atlantic had over 300 employees and 10 offices across the globe.^[15]

In July 2017, The Atlantic Philanthropies noted the existence of an advance-fee scam email claiming to distribute money to "randomly selected individuals" worldwide, and using a link to the Wikipedia article to falsely verify the scammer's identity as "Charles Feeney".^[16]

On September 14, 2020, Feeney closed down the Atlantic Philanthropies after the nonprofit accomplished its mission of giving away all of Feeney's money by 2020.^[15]
...

Personal life[edit]

Feeney is known for his frugality. According to a The New York Times article in 2017, "Until he was 75, he traveled only in coach, and carried reading materials in a plastic bag." He does not own a car or a house and wears a $10 Casio F-91W watch.^[28][10]

As of 2016, he lived in a rented apartment in San Francisco, with a remaining balance of $2 million.^[3]

What a marvelous legacy for Mr. Feeney as an individual.

I suppose Mr. Feeney could have structured The Atlantic Philanthropies differently, such as might allowed it to exist in perpetuity rather than exhaust its resources during Mr. Feeney's lifetime.

14 hours ago, Analytics said:

As illustrative numbers, the Church takes in about $7 billion a year in tithing, and operates the church on about 90% of that. Its for-profit holdings generate another $7 billion a year of profit. Of that, something on the order of $50 million goes towards philanthropic/humanitarian purposes, and the other $6,950 million is reinvested to increase the size of its investment portfolio.

In other words, when you define "total income" as tithing revenue plus investment income, in all likelihood the church spends over 50% of its income to increase the size of its for-profit investment portfolio.

In other words, the Church's primary mission is to increase the size of its investment portfolio. According to the numbers, that is its biggest priority. By far.

I question these figures.

From this 2020 Deseret News article:

Quote

The Church of Jesus Christ of Latter-day Saints doubled its humanitarian spending over the past five years and now annually provides nearly $1 billion in combined humanitarian and welfare aid, the church’s Presiding Bishopric said this week in a rare interview.

The article: "Nearly $1 billion {per year} in combined humanitarian and welfare aid."

A relentlessly fault-finding cynic: "The Church's primary mission is to increase the size of its investment portfolio ... that is its biggest priority.  By far."

Quote

But the church’s work and missions cannot be reduced to its humanitarian spending and charity efforts, said Presiding Bishop Gérald Caussé and his counselors, Bishop Dean M. Davies and Bishop W. Christopher Waddell. Those represent just one function of a sprawling global faith that funds 30,000 congregations, more than 200 temples and educational opportunities for hundreds of thousands of students while also providing food, clothing and shelter for hundreds of thousands of people a year.

“It’s no surprise we are talking about billions of dollars,” Bishop Caussé said. “Nobody should be surprised, given the number of members, millions of members, 16 million members in so many countries. This is a church that has become quite large, and so there’s a large budget, and we are grateful for that because that’s an opportunity to expand the reach of all the good that the church can do around the world.”

The article: The Church is supporting 30,000 congregations, 200 temples, educational opportunities for hundreds of thousands of students, food, clothing and shelter for hundreds of thousands of people a year.

A relentlessly fault-finding cynic: "The Church's primary mission is to increase the size of its investment portfolio ... that is its biggest priority.  By far."

Quote

The bishopric gave a unique look at the breadth and depth of the financial dealings of the global faith in a sit-down interview with the Deseret News and Church News two weeks after the bishopric spoke to The Wall Street Journal (subscription required) answering critics’ charges that the church is amassing wealth.

To the contrary, church leaders said it is fulfilling its mission to care for the poor, spread the gospel of Jesus Christ around the world, strengthen the spiritual foundation of its members and live the principles of self-reliance it teaches to all.

The church’s investment arm, Ensign Peak Advisors, reportedly has grown to $100 billion, a figure claimed by the brother of a former worker at Ensign Peak. The members of the bishopric said they were aware that those reports drew both praise from some about the way church leaders are managing what they and members consider sacred donations as well as criticism and questions about what the church is doing with such a large amount of money.

They did not confirm whether that amount was accurate, but they said they expect leaner economic times will come in the future and also acknowledged that the church’s needs and expenditures are accelerating as the faith grows around the world. They also rejected the notion they are hoarding money for the Second Coming of Jesus Christ. Instead, they said, they are making prudent, diverse investments to protect against economic downturns and prepare for the future.

The article: "Leaner economic times will come in the future."

The article: "{T}he church’s needs and expenditures are accelerating as the faith grows around the world."

The article: "{The Church is} making prudent, diverse investments to protect against economic downturns and prepare for the future."

A relentlessly fault-finding cynic: "The Church's primary mission is to increase the size of its investment portfolio ... that is its biggest priority.  By far."

Quote

What follows is a look at the faith’s holdings through the eyes of the men tasked with receiving and distributing donations to the church.

Bishop Caussé said the size of the fund is a proper backstop for the church’s full breadth and depth of operation.

“Most of the growth, I have to say, is because we are right now in the longest period of prosperity in the United States that has ever been recorded, and this is creating that surge of financial markets,” he said. “We are just beneficiaries of it.”

In 2008, the credit crisis and related stock market plunge reportedly obliterated 21% of the value of Ensign Peak’s holdings, according to a document produced by the former employee’s brother. The Ensign Peak fund reportedly has more than doubled in the subsequent, ongoing economic upswing.

The bishopric did not confirm those reports, but did say the church froze budgets and hiring during the crisis. The only budget item that increased in that period was humanitarian and welfare spending, because church leaders knew more people would need help.

“There will be future downturns,” Bishop Waddell said. “How extensive, how dramatic we don’t know. But one of the comments we made to the Journal was that if that were to happen, because of the reserves being carefully watched over, protected and wisely handled, we won’t have to stop missionary work, we won’t have to stop maintaining buildings and building temples, we won’t have to stop humanitarian and welfare work, we won’t have to stop education work. What the journalist (wrote) was that we won’t have to stop missionary work, period. Well, there’s more than that.”

A loss of 21% is pretty significant.  I also saw this just earlier today:

Quote

A worldwide recession is just around the corner as central banks boost borrowing costs aggressively to tame inflation — and this time, it will ignite more market turbulence than ever before, according to BlackRock.

The global economy has already exited a four-decade era of stable growth and inflation to enter a period of heightened instability — and the new regime of increased unpredictability is here to stay, according to the world's biggest asset manager.

That means policymakers will no longer be able to support markets as much as they did during past recessions, a team of BlackRock strategists led by vice chairman Philipp Hildebrand wrote in a report titled 2023 Global Outlook.

"Recession is foretold as central banks race to try to tame inflation. It's the opposite of past recessions," they said. "Central bankers won't ride to the rescue when growth slows in this new regime, contrary to what investors have come to expect. Equity valuations don't yet reflect the damage ahead."

Bishop Waddell in 2020: "“There will be future downturns.  How extensive, how dramatic we don’t know. But one of the comments we made to the Journal was that if that were to happen, because of the reserves being carefully watched over, protected and wisely handled, we won’t have to stop missionary work, we won’t have to stop maintaining buildings and building temples, we won’t have to stop humanitarian and welfare work, we won’t have to stop education work. What the journalist (wrote) was that we won’t have to stop missionary work, period. Well, there’s more than that.”

Bishop Caussé in 2020: "Most of the growth, I have to say, is because we are right now in the longest period of prosperity in the United States that has ever been recorded, and this is creating that surge of financial markets.  We are just beneficiaries of it.”

BlackRock today: "The global economy has already exited a four-decade era of stable growth and inflation to enter a period of heightened instability — and the new regime of increased unpredictability is here to stay."

A relentlessly fault-finding cynic: "The Church's primary mission is to increase the size of its investment portfolio ... that is its biggest priority.  By far."

Back to the D-News article:

Quote

The Presiding Bishopric said a large reserve is necessary, specifically citing as reasons the church’s expansion into countries in which congregations are not self-sustaining, the construction of 50 more temples and the growing cost of providing educational opportunities for more and more students. The church is educating 880,500 students through its seminary and institutes program, universities and Pathway program.

The article: The Church is supporting "congregations {that} are not self sustaining," constructing 50 temples, subsidizing "the growing cost of providing educational opportunities for more and more students," and so on.

A relentlessly fault-finding cynic: "The Church's primary mission is to increase the size of its investment portfolio ... that is its biggest priority.  By far."

Quote

They said tithing and fast offerings are spiritual principles that benefit church members, shared more details about the church’s farms and educational expenses and described its humanitarian donations as precision-guided aid.

“It is a church,” Bishop Caussé said. “It’s not a financial institution … and because it is a church, the funds that are managed within the church are contributed by the members of the church and are really sacred. We really consider those funds as belonging to the Lord.

“It’s difficult to understand the church,” he added. “If you look at it as a financial institution, you will never understand it. You have to look at it as an organization of consecrated followers of Jesus Christ. This is what it is, with a mission assigned by the Lord.”

Bishop Caussé: "{T}he funds that are managed within the church are contributed by the members of the church and are really sacred. We really consider those funds as belonging to the Lord."

A relentlessly fault-finding cynic: "The Church's primary mission is to increase the size of its investment portfolio ... that is its biggest priority.  By far."

Quote

The three bishops challenged some of what they’ve seen in previous reports.

“The people who say we’re not doing our part, that is just not true,” Bishop Waddell said. “We’re talking close to $1 billion in that welfare/humanitarian area on an annual basis. Yes, we are using our resources to bless the poor and the needy as well as all of the other responsibilities we have as a church.”

The figure includes all humanitarian and welfare expenditures, including fast offering aid.

The budget for humanitarian work “has gone up dramatically,” Bishop Waddell said.

In fact, Bishop Caussé added, humanitarian expenditures have doubled in the past five years.

“And we believe they are going to increase fast,” he said.

The article: "{H}umanitarian expenditures have doubled in the past five years.  'And we believe they are going to increase fast,' {Bishop Caussé} said."

A relentlessly fault-finding cynic: "The Church's primary mission is to increase the size of its investment portfolio ... that is its biggest priority.  By far."

Quote

Increases in humanitarian and welfare spending are driven first by the contributions and volunteerism of church members, the bishops said. The other major factor is how quickly the church can ensure new avenues for precise giving. For example, Latter-day Saint Charities carefully and thoroughly assesses each partner. “The last thing you want to do is just give them money and then you really don’t know where it goes,” Bishop Davies said. “So we have both missionaries and area staff on the ground, feet on the ground, who actually are there, they can see that food’s being distributed, or equipment, or schools are being built as part of our program.”

“We have an obligation to the members of the church who pay their tithes and offerings to make sure that is going to organizations or areas that will actually meet a need,” Bishop Waddell said. “The members of the church have a right to trust that it’s going to be managed and handled well and not just thrown at issues.”

The Church is working to do more than "just give them {philanthropic partners} money."

Quote

The leaders said the church’s expansion into more countries is increasing its ability and opportunities to help others.

“As the church has been established in many more countries, we develop local relationships with nongovernmental organizations and governments, and as we develop those types of relationships, we become aware of more and more needs,” Bishop Caussé said. “In the past our humanitarian reach was done mostly either directly or through our partnerships with global organizations” the church trusts to ensure donations are effective. “We’re going to see more and more partnerships with local organizations, because we are there and we are present and we know the people.”

While humanitarian spending is increasing, so are all the other costs associated with operating the church.

“The (financial) needs of the church are increasing and accelerating,” Bishop Caussé said. For example, “There are 50 temples that have been announced that are either under construction or in preparation for construction right now, 50. That’s huge.”

The church has 167 operating temples, which come with operational and maintenance costs.

Among the other missions of the church is missionary work, which includes funding 399 missions and the travel and health care expenses of 67,695 missionaries.

Education is another massive expenditure that must be backstopped. Bishop Caussé said the church’s five universities and colleges, which educate 90,000 students, operate at a cost of $1.5 billion a year paid for by tuition and tithing.

Previous statements by leaders show that tithing subsidizes well over half of the cost. That allows many students to graduate with little to no debt. Brigham Young University ranks No. 1 on the latest Forbes list of best value colleges.

Universities are only a portion of the church’s education costs. It pays for a Seminary and Institutes program that provides religious education to more than 800,000 teens and college students around the world. The effort includes 50,000 teachers, Bishop Caussé said.

The church operates 27 wheat storage facilities and funds nine refugee resettlement agencies in the United States. It also operates more than 100 bishops’ storehouses full of food and commodities to help church members around the world.

Family history work is growing and the church allocates resources to obtain records and produce searchable records, Bishop Caussé said. There is urgency, because some of the records are deteriorating.

The article: The Church is financially supporting numerous NGO partners, building and/or operating/maintaining hundreds of temples and thousands of meethinghouses, tens of thousands of missionaries in 399 missions around the world, the education of 90,000 students at its colleges and universities and religious education to more than 800,000 teens and college students around the world, 27 wheat storage facilities, nine refugee resettlement agencies in the United States, 100 bishops’ storehouses full of food and commodities, family history work, and more.

A relentlessly fault-finding cynic: "The Church's primary mission is to increase the size of its investment portfolio ... that is its biggest priority.  By far."

Quote

Church leaders use tithing funds and fast offerings from established areas of the church to help finance less-established areas, the bishops said.

“In these emerging countries of the church, there is no way that the tithing, although members are very faithful … their tithing cannot cover all the expenditure, so it’s very important that members here in the United States and many other countries where the church has been established for a long time will contribute to it,” Bishop Caussé said. “There’s a great transfer of funds that happens, and it will be more and more in the future as the church develops in those countries.”

Bishop Caussé added, “In the center of everything that we do, is to care for those around us and to love our neighbor. And sometimes our neighbor can be in a faraway country.”

The article: The Church is using "tithing funds and fast offerings from established areas of the church to help finance less-established areas."

A relentlessly fault-finding cynic: "The Church's primary mission is to increase the size of its investment portfolio ... that is its biggest priority.  By far."

Quote

Bishop Davies said the number of church members who pay a full tithing is very close to the number who pay a fast offering.

The church transfers surplus tithing each year to Ensign Peaks to invest for a rainy day.

“The church practices what it preaches in terms of setting aside and having budgets,” Bishop Davies said. “We never expend more than what we estimate will be coming in terms of tithes and offerings. And also by definition we set aside a certain amount every year in reserve for those times when there will be a need, and there will be a need in the future.”

Bishop Davies: "There will be a need in the future."

Per BlackRock, that need may be coming sooner than we think.

Quote

Ensign Peak invests in a diverse portfolio. Some of the money is invested in U.S. equities, which are stocks and bonds. Previous filings with the Securities and Exchange Commission have shown that Ensign Peaks’ various funds hold stock in companies such as Apple, Home Depot and Alphabet.

But that is just a portion of the reserve fund.

“In addition to the reserves that are invested by Ensign Peak, we have reserves invested in real property and commercial real estate, residential real estate and in agriculture,” Bishop Waddell said.

That includes many large ranches and farms, which produce food to feed the hungry as well as provide long-term investment. The church recently bought a 15,000-acre, Dallas-area corn and sorghum farm with 10,000 head of cattle through one of its tax-paying agriculture companies, which include AgReserves Inc. and Farmland Reserve Inc. The property was listed for nearly $50 million, the Dallas Morning News reported on Thursday.

“They are one of the largest cattle ranch operators in the U.S.,” Icon Global founder Bernard Uechtritz told the newspaper.

The church’s ranch holdings are public.

For example, the church owns 670,000 acres of cattle ranches, farms and timberland in Florida. It started Deseret Ranches of Florida in 1950. It shared information about the ranch in a 1975 issue of the Ensign, one of the faith’s magazines, and on its Church Newsroom website in 2016. The Deseret News wrote about the ranches in 2013 and also covered the purchase of the timberland. It is public information that the church plans to develop some of the ranch property over the next 60 years.

The church invests in stocks so it can capture the value in economic boom times. It invests in agriculture, commercial real estate, residential real estate and other financial instruments to hedge against inflation during tougher times.

“The church has an attitude of being very conservative, very prudent,” Bishop Caussé said. “We really look in the long term. It’s not about having your reserves fluctuate all the time but looking into long-term care of those funds so they can be available to the church for accomplishing its mission. For example we have agricultural land that we look at with a 20- to 30-year perspective. It’s about how can we develop in a way that will be safe for the environment, that will be developing the land and the community, providing a great increase for the church or an interest of the church, but also preserving it for generations. That’s something that the church can do with its reserves that most businesses cannot do, because we are a church. It’s a different way of reasoning.”

This seems like a prudent long-term investment strategy.

Quote

The church has not released financial reports since 1959, when it ran a deficit. The financial policies it now follows, never spending more than it takes in and setting aside some money in a reserve fund each year, were established in the 1970s, prior to the tenure of any of today’s church leaders. The late church leader President Gordon B. Hinckley explained the philosophy in the days after Sept. 11, 2001, which he called perilous times. “We cannot provide against every contingency,” he said, “but we can provide against many contingencies. Let the present situation remind us that this we should do.”

For the past four decades, media outlets have published newspaper series, magazine cover stories and books about the church’s property, investments and reserves. In the latest example two months ago, a man posted information online that he said contained documents his twin brother took from Ensign Peak before he resigned last year. The man filed a complaint with the IRS alleging the church should be forced to pay taxes on the returns earned by Ensign Peak because it is not spending its funds. The Washington Post later reported that the twins have had a falling out.

Independent tax experts have told multiple publications the IRS is unlikely to act on the man’s complaint because Ensign Peak is integral part of the church, legally known as an integrated auxiliary.

There have been no allegations of leaders enriching themselves, something noted in multiple reports on church finances. The church’s general authorities leave their professional careers to serve as church leaders full time often at significant financial sacrifice.

Again, with feeling: "There have been no allegations of leaders enriching themselves, something noted in multiple reports on church finances. The church’s general authorities leave their professional careers to serve as church leaders full time often at significant financial sacrifice."

A relentlessly fault-finding cynic: "The Church's primary mission is to increase the size of its investment portfolio ... that is its biggest priority.  By far."

As between your assessment of the Church versus the explanation given by the Presiding Bishopric, I'll go with the latter.

Thanks,

-Smac

Edited December 9, 2022 by smac97

[Stargazer]

1 hour ago, Stormin' Mormon said:

In other words, the Church's primary mission is to operate the Church.  

 

Who knew?  

[pogi]

14 hours ago, Analytics said:

Sure. But even though it could use the returns for the benefit of members and society in general, is that what it actually does?

Or does it use virtually all of the returns to build up more wealth?

The Church didn't become obscenely wealthy because it uses its income for philanthropic/humanitarian purposes. The Church became obscenely wealthy because it uses virtually all of its investment income to generate more and more wealth.

As illustrative numbers, the Church takes in about $7 billion a year in tithing, and operates the church on about 90% of that. Its for-profit holdings generate another $7 billion a year of profit. Of that, something on the order of $50 million goes towards philanthropic/humanitarian purposes, and the other $6,950 million is reinvested to increase the size of its investment portfolio.

In other words, when you define "total income" as tithing revenue plus investment income, in all likelihood the church spends over 50% of its income to increase the size of its for-profit investment portfolio.

In other words, the Church's primary mission is to increase the size of its investment portfolio. According to the numbers, that is its biggest priority. By far.

 

When not one single individual is reaping any personal financial reward from this, it is hard to criticize $50 million towards humanitarian purposes.

The second the brethren start buying luxury yachts with the money, then we have a problem. 

We don't know the purpose behind their investing in wealth, but one thing is for certain - that wealth is not being used for to line the pockets of anyone.  It is creating thousands jobs and boosting the economy and doing much good humanitarian work.  If we are going to criticize institutional financial practices, this is not the bone to pick.