Update on Church Finances

[Teancum]

On 1/11/2023 at 2:02 PM, smac97 said:

I'm really trying to understand the mindset that differentiates "the Church" into its constituent parts, and then vilifies "the Church" as a whole by pointing to one of its particular components (the EPA) and throwing a hissy fit because it is not itself, in its own name, distributing money to humanitarian/welfare/philanthropic efforts.

Nobody it throwing a hissy fit at all.  Discussing, opining, etc. I do not donate to the Church anymore and this is one of the reasons among many.  I do still donate other organizations however.  And the Church received a substantial amount of my income over my active life as well as my time for no charge.  Between time and money I would guess I am at a pretty healthy six figure equivalency. So I do have some interest in this actually.  

[Kenngo1969]

On 1/11/2023 at 9:29 AM, Scott Lloyd said:

 

OK, I get it now. 
 

I enjoy a good pop-culture reference from time to time. But this one strikes me as rather obscure. 

Maybe.  But that's why Google is your friend!  

[Teancum]

On 1/11/2023 at 2:02 PM, smac97 said:

 

Point 1: The Church maintains EPA as its "investment arm."  EPA invests and generates revenue for the Church. 

Yes

On 1/11/2023 at 2:02 PM, smac97 said:

 

 

Point 2: The EPA's revenue is not taxed in the same way as the Church's various tax-paying entities are.  This is, apparently, entirely legal.

Yes.  I have no problem with it. The Gates Foundation operates in a tax free environment but must at least put a % of its income or assets (I would have to check I am not a private foundation tax expert)  to its charitable mission every year.

On 1/11/2023 at 2:02 PM, smac97 said:

Point 3: Critics think that the Church ought to be distributing "more" of the funds generated from EPA's holdings.  How much "more" is seldom specified or explained.

How about 5% of ist assets per year?

On 1/11/2023 at 2:02 PM, smac97 said:

Point 4: These critics are not, I think, grousing about the Church's various tax-paying entities, apparently because . . . they pay taxes?  

Not me. I am ok with entities that play be the rules.  I think tax exempt entities have their place and serve a social purpose.

On 1/11/2023 at 2:02 PM, smac97 said:

Point 5: The money derived from EPA's investments is apparently being characterized as distinguishable from other monies coming into the Church, apparently because . . . it is not taxed?

There is plenty on $ coming into the church and some other income from other investments are likely not taxed as well.

On 1/11/2023 at 2:02 PM, smac97 said:

Point 6: The money derived from donations to the Church - tithes, fast offerings (?), donations to LDS Philanthropies, etc. - are also not taxed.

Yep.

On 1/11/2023 at 2:02 PM, smac97 said:

Point 7: Critics are fine with Point 6 (charitable donations from members not being taxed) but are unhappy with Point 5 (EPA $ not being taxed) because . . . why?  This grievance is apparently not on the basis that is unlawful (though some have tried mightily to make it appear so).  Instead, it appears to be based mostly or entirely on the notion that the EPA $ is "too much."

I don't suggest this but I do wonder what IRS rules EPA is working under in that they do not seem required to distribute some of its income/assets for its outlined purpose as other foundations are required to do.  It must not be a private foundation but rather  an investment arm under the church and it tax exempt status.

On 1/11/2023 at 2:02 PM, smac97 said:

Point 8: As I noted previously, the Church is middle-of-the-back vis-à-vis the reserves-to-annual-budget ratio.  Bill Gates and Harvard use a 10:1 ratio, the Church's is 16:1, and "{m}any private foundations" use a 20:1 ratio.

Point 9: I think critics are avoiding/ignoring Point 8 by implicitly differentiating EPA as distinct from "the Church," and then complaining that EPA "has spent $0 for humanitarian and welfare aid."

Smac really would you not like to see EPA put some of its assets/income to work for humanitarian purposes?  I don't think  EPA is distinct. I think it is part of it thus why I think it should put some of its assets/income to work.

On 1/11/2023 at 2:02 PM, smac97 said:

Point 10: To me, the foregoing implicit differentiation is . . . weird.  How is the foregoing criticism (that EPA "has spent $0 for humanitarian and welfare aid") distinguishable from the illustrative example I provided earlier ("we know the Relief Society of the Ephraim 1st Ward has spent $0 for humanitarian and welfare aid")?  

Thanks,

-Smac

 

Because EPA has billions.

[Teancum]

On 1/11/2023 at 2:10 PM, smac97 said:

I think people like you constantly resorting to allegations of a "persecution complex" are pretty weird.  It comes across as a thought-terminating cliché ("a form of loaded language, often passing as folk wisdom, intended to end an argument and quell cognitive dissonance"). 

Try reading your posts from the side of a non believer then come talk to me.

[Teancum]

On 1/11/2023 at 2:10 PM, smac97 said:

There really are people who are actively opposed to and criticizing and working the Church.  There really are people out there attempting to do harm to the Church.  To its reputation, its legal and tax status, its physical structures, its relationship with its members and society in general, and so on.

Thanks,

Hmm.  I think it is pretty benign really.  And here it is just a discussion board. I hardly talk about any of this outside of here other than with a few close friends and some family.

[Teancum]

2 hours ago, Mark Beesley said:

You comment that you agree that the Church should maintain reserves, but you wonder how much. Right?

Correct.

2 hours ago, Mark Beesley said:

Consider first the purpose of reserves. I suggest the purpose of reserves is to protect against unknown eventualities. Do you disagree?

Clearly.

2 hours ago, Mark Beesley said:

If, as Latter-day Saints believe, President Nelson is called of God to preside over this Church, then it is possible that the Lord has revealed things to him which make it prudent to establish reserves which may seem, to some, excessive.  In other words, President Nelson may (does) know something that you and I do not.

If he is a prophet sure. I am personally highly skeptical of that personally.  But sure.

2 hours ago, Mark Beesley said:

Could it be that what some folks are actually upset about is that President Nelson has not told us everything the Lord has revealed to him?  Sometimes just a little faith is all we need to accept things we do not yet fully understand.

It is possible.

2 hours ago, Mark Beesley said:

And just a shortcut the question as to why President Nelson doesn’t tell us everything that the Lord has told him:

“It is given unto many to know the mysteries of God; nevertheless they are laid under a strict command that they shall not impart only according to the portion of his word which he doth grant unto the children of men, according to the heed and diligence which they give unto him.” Alma 12:9

The fact the President Nelson may (does) know things that we do not know should cause us some consternation because it is indicative that we are not heeding the warnings that have been given to us in the past.

 

 

[Scott Lloyd]

On 1/12/2023 at 1:14 PM, Kenngo1969 said:

Maybe.  But that's why Google is your friend!  

I agree you can get up to speed on just about anything pop related these days in less than a minute with Google. But I still think the more effective references are those for which most people don’t have to. 
 

Consider the comedy of Robin Williams — in the “Aladdin” movie and sequel and in the earlier “Mork and Mindy” TV series.  Constant, rapid-fire pop references. Very effective, but it would have fallen flat without a fairly ubiquitous consciousness among the majority of the audience. 

Edited January 13, 2023 by Scott Lloyd

[Calm]

Not interested in starting a new thread in this, but if someone else thinks there is enough there for it, no problem

https://religionunplugged.com/news/2023/2/8/former-employee-of-ensign-peak-advisors-submits-document-to-senate-finance-committee

[JustAnAustralian]

I guess his attempt to try and claim a bounty from the IRS didn't work, so now he's trying trial by media again.

[Calm]

24 minutes ago, JustAnAustralian said:

I guess his attempt to try and claim a bounty from the IRS didn't work, so now he's trying trial by media again.

I thought it was something more serious, but now I am not sure even about that..  I am clueless about the process and while the other I could follow relatively easily (because analysis was mostly circular), this refers to laws and policies I am not aware of and so cannot determine if his interpretation is decent.

Here is one analysis by an expert in the field, Sam Brunson (again, I have no clue about quality), which seems to indicate pretty clearly that no, Nielsen’s interpretation of tax law is not decent, but quite off track…..  Would love to hear from anyone familiar with tax law if this stuff makes sense to them.  Several of his comments make it appear that Nielsen didn’t know what he was talking about, in fact the more I read his critique, the more I think he is shredding it….

https://twitter.com/smbrnsn/status/1623697204748713984 

Quote

(I should also point out, before I get much further, that this submission to the Senate Finance Committee is purely a publicity stunt. I mean, sure, it's been submitted to the Committee. But that's meaningless, because there's no formal submission policy. 4/

My guess is they sent it in and that, if it gets opened, it'll be ignored. Because this isn't the kind of thing, frankly, that Senate Finance is going to be interested in, and they're under no obligation to do anything.)

Quote

It's this misunderstanding that seems to underlie a lot of the rest of the tax stuff. Like yes, it has to be organized for a qualifying charitable purpose. But it doesn't actually have to actively pursue one: funding a charitable organization likely qualifies.

Quote

I'm looking forward to the explanation here, because I've tried to think through how tax exemption for an investment fund would provide a competitive advantage, and as far as I can tell, that's bullshit. But I'm excited to be proved wrong! 8/

Wait, is this it?!? I mean, tell me you've never read a private equity fund prospectus/partnership agreement without telling me you've never read a private equity fund prospectus/partnership agreement. 9/

Quote

Okay, you got me. I Googled what a "Klein conspiracy" is. And it looks suspiciously like they're using it because at least they knew "RICO violation" would be facially stupid. 18/

Quote

In his mind, the amounts distributed to Beneficial Life and City Creek represented using tax-exempt money to support a for-profit enterprise. In a way that's right. But in a much more important way, it's not. 23/

 

Edited February 10, 2023 by Calm

[JustAnAustralian]

6 minutes ago, Calm said:

Would love to hear from anyone familiar with tax law if this stuff makes sense to them.

I hoping Sam will put a post up on BCC in the next few days.

[JustAnAustralian]

10 minutes ago, Calm said:

Here is one analysis by an expert in the field, Sam Brunson, I have no clue about quality.  Would love to hear from anyone familiar with tax law if this stuff makes sense to them.  Several of his comments make it appear that Nielsen didn’t know what he was talking about:

https://twitter.com/smbrnsn/status/1623697204748713984 

Threadreader version for those that don't like the way twitter works https://threadreaderapp.com/thread/1623697204748713984.html

[Calm]

16 minutes ago, JustAnAustralian said:

Threadreader version for those that don't like the way twitter works https://threadreaderapp.com/thread/1623697204748713984.html

Thank you, I don’t use Twitter if I can help it.

[helix]

2 hours ago, JustAnAustralian said:

I guess his attempt to try and claim a bounty from the IRS didn't work, so now he's trying trial by media again.

And to nobody's surprise, Peggy of the Salt Lake Tribune has jumped on board.  Currently front page news to them.

Edited February 10, 2023 by helix

[The Nehor]

11 hours ago, Calm said:

Not interested in starting a new thread in this, but if someone else thinks there is enough there for it, no problem

https://religionunplugged.com/news/2023/2/8/former-employee-of-ensign-peak-advisors-submits-document-to-senate-finance-committee

I don’t like the look of this reboot of the Smoot Hearings. Bet it won’t be as good as the original.

[Calm]

1 hour ago, The Nehor said:

I don’t like the look of this reboot of the Smoot Hearings. Bet it won’t be as good as the original.

If it ever happens.  Not really politically useful I am guessing.  I would think they have some tax experts look at the claim first to decipher it for them and if Brunson is correct in his analysis, there isn’t much of interest there given Nielsen doesn’t understand many of the laws.

Though there appear to be many hearings every day if I understand this correctly.

https://www.doi.gov/ocl/hearings/116

Going through this quickly to see if I can find any reference to how many investigative hearings they have.

https://www.everycrsreport.com/reports/RL30548.html

Edited February 10, 2023 by Calm

[The Nehor]

1 minute ago, Calm said:

If it ever happens.  Not really politically useful I am guessing.  I would think they have some tax experts look at the claim first to decipher it for them and if Brunson is correct in his analysis, there isn’t much of interest there given Nielsen doesn’t understand many of the laws.

It depends on if anyone is bored and needs a cudgel to hit the church for some reason. Congressional hearings are only rarely about figuring things out and seeking information.

[Calm]

And here is a bit:

Quote

Each committee receives dozens, sometimes hundreds, of proposals for possible examination, and may study matters not embodied in specific legislation. Given the context of its overall workload, a committee must decide whether holding a hearing is the best use of its resources. A committee must also consider whether and how a hearing would fit into its overall agenda. Committees with broad jurisdictions often struggle to allocate limited resources and balance the political and policy demands of its membership.

And here is a list of current hearings for the Senate Finance Committee:

https://www.finance.senate.gov/hearings

This has 27 hearings in 2022 out of hundreds of submissions….given the topics I find it highly unlikely it would have a hearing dedicated to this, perhaps as part of a more global treatment though…

Edited February 10, 2023 by Calm

[bsjkki]

53 minutes ago, Calm said:

And here is a bit:

And here is a list of current hearings for the Senate Finance Committee:

https://www.finance.senate.gov/hearings

This has 27 hearings in 2022 out of hundreds of submissions….given the topics I find it highly unlikely it would have a hearing dedicated to this, perhaps as part of a more global treatment though…

If it gets lumped into efforts to tax churches, it might get some attention. 

[Hamba Tuhan]

5 hours ago, JustAnAustralian said:

I guess his attempt to try and claim a bounty from the IRS didn't work, so now he's trying trial by media again.

My prediction: this will be as effective as the Australian tithing thingy.

[Buckeye]

New article from the WSJ today. Looks like the SEC may take action for failure to report the stock holdings. 
 

https://www.wsj.com/articles/mormon-churchs-investment-arm-under-investigation-by-sec-dca77f9
 

“The SEC’s investigation has focused on whether the Church of Jesus Christ of Latter-day Saints, also known as LDS, complied with disclosure requirements for large money managers. It is at an advanced stage and is likely to lead to a settlement in the coming months, people familiar with the matter said.”

[CA Steve]

4 hours ago, Buckeye said:

New article from the WSJ today. Looks like the SEC may take action for failure to report the stock holdings. 
 

https://www.wsj.com/articles/mormon-churchs-investment-arm-under-investigation-by-sec-dca77f9
 

“The SEC’s investigation has focused on whether the Church of Jesus Christ of Latter-day Saints, also known as LDS, complied with disclosure requirements for large money managers. It is at an advanced stage and is likely to lead to a settlement in the coming months, people familiar with the matter said.”

Well maybe it is a good thing that they have such a large sum of money in reserve. At least they will be able to afford any fines they have to pay.

🙄

[Calm]

7 hours ago, Buckeye said:

New article from the WSJ today. Looks like the SEC may take action for failure to report the stock holdings. 
 

https://www.wsj.com/articles/mormon-churchs-investment-arm-under-investigation-by-sec-dca77f9
 

Quote

In its latest filing, Ensign Peak reported $40.2 billion in U.S. stock holdings. The church has separate investment holdings, including farms and real estate.

The Journal said SEC regulators don’t have to prove an organization intended to violate disclosure rules. A simple failure to file the required 13-F form, or omitting information, is enough to trigger a violation, the financial newspaper said.

The church preaches fiscal management to its members, advising them to set budgets and save money. It practices what it preaches as an organization, church leaders say. The church’s decades-long policy is to never spend more in a year than it receives in tithing and to set aside a portion each year for reserves, according to the Presiding Bishopric, which oversees church finances.

In recent years the church has spent about $1 billion a year to provide humanitarian aid and another $1 billion a year to subsidize and operate educational institutions like Brigham Young University, in addition to maintaining meetinghouses and a growing list of temples around the world.

“There will be future downturns,” Bishop W. Christopher Waddell, now first counselor in the Presiding Bishopric, said in 2020. “How extensive, how dramatic we don’t know. But ... 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.”

https://www.deseret.com/faith/2023/2/10/23594973/report-sec-investigates-past-latter-day-saint-investment-disclosures

[The Nehor]

On 2/9/2023 at 11:37 PM, bsjkki said:

If it gets lumped into efforts to tax churches, it might get some attention. 

Unlikely. While there are groups in the population that would love to look into churches that skirt or violate taxation law (not saying that is the case specifically here) or would like to change tax law there are very few politicians who would want to be the face of it in hearings and investigations.

[ttribe]

I hope the presence of a formal SEC investigation leads to the Church returning to practices of more transparency with its finances (i.e. pre-1959). The addition of an annual independent audit would go a long way toward eliminating the rampant speculation regarding the use(s) of its resources.