The Moral Hazard of Institutions and What We Can Do

[Meadowchik]

10 hours ago, Hamilton Porter said:

I agree to some extent. It's basically a miracle that an institution that doesn't disclose its finances can remain scandal free for so long. And the only scandal involved a reporting technicality.

What kind of scandal "counts" to you?

The church has gotten in trouble before.

The church funds IS the scandal for some and the reasons vary. You could say that the church has a budget problem for a long time and that once it got extremely wealthy, it conducted itself unacceptably. 

But without financial transparency we can't really know. 

How does the church do regarding compensating victims of its leaders? We cannot know, it doesn't give accountings of that. For example.

[Meadowchik]

9 hours ago, Calm said:

Agreed, but can’t this desire to better others’ lives end up in evil?

It certainly can. And tragically it can be completely unintentional. That's why knowledge and safety measures can be so important. 

[Meadowchik]

1 hour ago, jpv said:

Do you tithe (to the Church)?

I stopped tithing to the church after I left the church, so no I do not. Why do you ask?

[Hamilton Porter]

2 minutes ago, Meadowchik said:

What kind of scandal "counts" to you?

The church has gotten in trouble before.

What trouble? 

2 minutes ago, Meadowchik said:

The church funds IS the scandal for some and the reasons vary. You could say that the church has a budget problem for a long time and that once it got extremely wealthy, it conducted itself unacceptably. 

But without financial transparency we can't really know. 

How does the church do regarding compensating victims of its leaders? We cannot know, it doesn't give accountings of that. For example.

 

We know how much leaders get compensated from leaks. And to those who study religion, like Jan Shipps, the amount is surprisingly modest.

[Meadowchik]

12 minutes ago, Hamilton Porter said:

What trouble? 

Things that come to mind are issues like racial discrimination before 1979, issues including the ongoing topic of tax exempt status. It's involvement in Proposition 8. A history of sexual abuse scandals.  

These are things we can see from the outside without transparency.

[Hamilton Porter]

2 minutes ago, Meadowchik said:

Things that come to mind are issues like racial discrimination before 1979, issues including the ongoing topic of tax exempt status. It's involvement in Proposition 8. A history of sexual abuse scandals.  

These are things we can see from the outside without transparency.

Oh I thought we were talking about financial scandals due to lack of transparency. Not involvement with political issues or leaders not doing enough to stop sexual predators from slipping into our church.

[Meadowchik]

4 hours ago, Hamilton Porter said:

Oh I thought we were talking about financial scandals due to lack of transparency. Not involvement with political issues or leaders not doing enough to stop sexual predators from slipping into our church.

The OP used a specific example and made the topic more general, which when regarding the church can be applied to not just finances but anything else in the church institution.

That said, compensation for sexual abuse victims IS very much a financial topic. If someone has been abused by a church leader they should be financially compensated by the church for pain and suffering and also possible punitive payments if institutional neglect contributed to the abuse or delayed the compensation.

We do not know if the church deals decently with its victims.

[Hamilton Porter]

1 hour ago, Meadowchik said:

The OP used a specific example and made the topic more general, which when regarding the church can be applied to not just finances but anything else in the church institution.

That said, compensation for sexual abuse victims IS very much a financial topic. If someone has been abused by a church leader they should be financially compensated by the church for pain and suffering and also possible punitive payments if institutional neglect contributed to the abuse or delayed the compensation.

We do not know if the church deals decently with its victims.

The priesthood ban, prop 8, and sex abuse were not due to lack of transparency. That's just throwing the kitchen sink at the church. There are legal repercussions for sex abuse, none for financial management or corruption.

Anybody can accuse the church of sex abuse, e.g., McKenna Denison.

 

Edited May 21 by Hamilton Porter

[Meadowchik]

1 hour ago, Hamilton Porter said:

The priesthood ban, prop 8, and sex abuse were not due to lack of transparency. That's just throwing the kitchen sink at the church. There are legal repercussions for sex abuse, none for financial management or corruption.

Anybody can accuse the church of sex abuse, e.g., McKenna Denison.

 

There are actual victims of sexual abuse by church leaders and the church is not transparent about it or about how it compensates the actual known victims. 

So when you assist the church my any of your means, does it ever cross your mind how your contributions may facilitate/perpetuate it's institutional behaviours? Do you feel accountable for how people get treated by the institutional church? Are you accountable?

[california boy]

The Church also tried to hide the full extent it donated to Prop 8, but later was caught and had to pay fines for not disclosing all of it's financial contribution to Prop 8.

Quote

 

While the Fair Political Practices Commission could have assessed a $5,000 fine for each violation, it reportedly opted for a streamlined process that resulted in a deal with the church for the $5,539 fine. 

In a statement, the gay rights group the Human Rights Campaign said the fine reflects "a pattern of blatant disregard for California election laws and provides ongoing evidence that the Mormon Church was a significant leader in the campaign to repeal marriage equality, even while it evaded standard reporting requirements and denied its involvement."

 

 

[Hamilton Porter]

14 minutes ago, Meadowchik said:

There are actual victims of sexual abuse by church leaders and the church is not transparent about it or about how it compensates the actual known victims. 

So when you assist the church my any of your means, does it ever cross your mind how your contributions may facilitate/perpetuate it's institutional behaviours? Do you feel accountable for how people get treated by the institutional church? Are you accountable?

Not a worry in my mind that my contributions won't do more good than harm, by a massive margin.

[Meadowchik]

18 minutes ago, Hamilton Porter said:

Not a worry in my mind that my contributions won't do more good than harm, by a massive margin.

Is that how it works, goodness makes harm nothing to worry about?

I don't think that's moral. Goodness would help decrease any harm and produce more goodness, and most especially harm the institutional has itself done through its representatives.

[Meadowchik]

22 minutes ago, california boy said:

The Church also tried to hide the full extent it donated to Prop 8, but later was caught and had to pay fines for not disclosing all of it's financial contribution to Prop 8.

 

More lack of transparency that negatively impacted people.

[Kenngo1969]

20 hours ago, Tacenda said:

Not saying I understand this quote entirely, but sometimes it's happened. And your post here made me think of it.

“Religion is an insult to human dignity. Without it you would have good people doing good things and evil people doing evil things.
But for good people to do evil things, that takes religion.”
― Steven Weinberg

Right.  Now, if only the religion in question taught that humans are spirit-children of God, with innate worth and a divine nature and destiny, it wouldn't be quite such an "insult to human dignity."   If only, alas!  Sigh!

By the way, without religion, what other method could we use, reliably, to determine what, exactly, is "good" and "evil"?  How, exactly, do we determine what is good and what is evil?

Edited May 21 by Kenngo1969

[Meadowchik]

4 minutes ago, Kenngo1969 said:

Right.  Now, if only the religion in question taught that humans are spirit-children of God, with innate worth and a divine nature and destiny, it wouldn't be quite such an "insult to human dignity."   If only, alas!  Sigh!

By the way, without religion, what other method could we use, reliably, to determine what, exactly, is "good" and "evil"?  How, exactly, do we determine what is good and what is evil?

Lots of people have methods to do so. I have, and my methods are epistemologically based. In other words they start with the most I can know and what that implies. 

Religion certainly does not have an exclusive solution to immorality.

[Tacenda]

7 minutes ago, Kenngo1969 said:

Right.  Now, if only the religion in question taught that humans are spirit-children of God, with innate worth and a divine nature and destiny, it wouldn't be quite such an "insult to human dignity."   If only, alas!  Sigh!

By the way, without religion, what other method could we use, reliably, to determine what, exactly, is "good" and "evil"?  How, exactly, do we determine what is good and what is evil?

Thankfully our church hasn't done this except for some members that killed in the MMM in the name of religion. Here's an article by someone that was disagreeing with the atheist view of some doing evil in the name of religion and then how he changed his mind on some things. https://edubirdie.com/examples/is-religion-more-evil-than-good/

 

[CV75]

9 hours ago, Meadowchik said:

Are you saying you make that decision but don't think there is a need for institutional transparency?

I think it depends on the institution and the laws under which it operates. For example, a bank and a marriage are both institutions, different types operating under two kinds of laws. But both are constructed by people (including God, in my book), and are so ingrained in our social structure that they have become practically accepted as natural phenomena (as if gold were inherently valuable because people get their food from it, somehow, somewhere downstream). So, characteristics such as purpose, efficiency, effectiveness, transparency, etc. and the standards relating to them, will differ between institutions.

9 hours ago, Meadowchik said:

Keeping the institution moral itself is not quite the same as anything you listed here.

I would say it does, given that this too depends on the institution. Because institutions are constructed/established and sustained by people, the institution is moral within its own purview as defined by its adherents or redefined by its successful revolutionizing dissidents. So, the Church community and organization are kept moral, that is, aligned with its laws, articles, covenants, practices, etc., by the members perpetuating the Gospel.

[carbon dioxide]

2 hours ago, Meadowchik said:

More lack of transparency that negatively impacted people.

Transparent or not, it really did not matter.  The voters in California decided the fate of Prop 8.   Had the church been more transparent, it would not have changed the result.  Prop 8 was a response to an overturned voter decision in 2000 against gay marriage due to court decisions.   Prop 8 simple reaffirmed what voters decided earlier with little LDS involvement.  Gay marriage simply was not popular at that time.  At one point in state votes, the record was 31-0 against gay marriage.   My only criticism of the church involvement in Prop 8 is not transparency but it was not needed.  Prop 8 was going to pass regardless.  Support for gay marriage was not where voters were in 2008.

Edited May 21 by carbon dioxide

[Hamilton Porter]

2 hours ago, california boy said:

The Church also tried to hide the full extent it donated to Prop 8, but later was caught and had to pay fines for not disclosing all of it's financial contribution to Prop 8.

 

Link doesn't work.

[Meadowchik]

13 minutes ago, Hamilton Porter said:

Link doesn't work.

Works for me.

 

 

[Hamilton Porter]

3 hours ago, Meadowchik said:

Is that how it works, goodness makes harm nothing to worry about?

I don't think that's moral. Goodness would help decrease any harm and produce more goodness, and most especially harm the institutional has itself done through its representatives.

No organization can do absolutely no harm to anybody. That's impossible. All I know is that Latter-day Saints are the most moral people in the world, and the money I donate is well-invested and isn't going to mansions for General Authorities.

Admittedly, I benefit professionally from my LDS contacts, but that's not the reason I pay tithing.

[CV75]

Public financial reporting is not a moral principle, is not a requirement for the moral behavior of an institution and does not ensure or prove its moral behavior. It is a good business and governing practice, but not all institutions are of a business or government nature/construct.

[Hamilton Porter]

1 hour ago, Meadowchik said:

Works for me.

 

 

😭😭😭$5K fine for late reporting.

The church probably paid the fine. I don't pay half my fines. Protip: doesn't affect credit score.

[rpn]

On 5/20/2023 at 5:30 AM, Meadowchik said:

But however you want to compare it, the act of creating an intentional blind between yourself as contributor and the institution as receiver is incredibly risky. Without accountability and transparency, this type of intentional self-absolution is a serious moral hazard.

Or maybe it is just leaving to God what is His.   Trying to retain control over earthly things only works to our benefit when it is part of our own stewardship.   Tithing isn't our money to start with.  It is His portion of the 100% that He has given us.

[smac97]

On 5/20/2023 at 3:30 AM, Meadowchik said:

I found an example of the title subject in another thread.

In it there is an argument that can be restated as, "If I do my part in a group effort and others after me don't, that's not my concern."

I am curious if you are paraphrasing me and my statement here (responding to you) :

Quote

Quote

What if a member told their bishop they were no longer paying tithing because they were saving it for their own retirement, just like the church isn’t using much of its own money to bless the poor because it’s saving it for its own future use?

The "just like" is not warranted, I think.

First, we are under covenant to pay tithing.

Second, that obligation is not contingent on us approving how those with stewardship manages tithes.  (I suspect the folks at Exponent II pay their taxes, notwithstanding government mismanagement, corruption, waste, etc., and the Church is doing far better.)

Third, "the church" has all sorts of mandates, including "bless{ing} the poor," and it is doing do.

If you were paraphrasing me, I will respectfully disagree with your paraphrase, that is, the "and others after me don't, that's not my concern" part.

I think members of the Church should be generally aware of what the Church is doing. 

I also think members of the Church have a right to raise questions and concerns about what the Church is doing (in an appropriate time, place and manner).

Nevertheless, my covenants to keep the commandments of God, fulfill my duties as a disciple of Christ, etc. are not contingent on how well other people keep their covenants, how well they fulfill their duties, etc.

On 5/20/2023 at 3:30 AM, Meadowchik said:

The argument was made in reference to tithing,

This is why I think you are paraphrasing me.  If so, the "and others after me don't, that's not my concern" part of your characterization is very incorrect.

On 5/20/2023 at 3:30 AM, Meadowchik said:

and in this case tithing is collected by a church because it is considered a commandment and the church is considered to represent the Lord.

The Church is the Lord's steward, yes.  

On 5/20/2023 at 3:30 AM, Meadowchik said:

And therefore, as the argument goes, I tithe to the church to obey the commandment and I must consider the act as me giving to the Lord, therefore I must not question or criticise what the church does with it because that would essentially be questioning or criticising God.

That is not an argument I have made.  Perhaps you are conflating my position with others?

In any event, let's break it down: 

"I must consider the act as me giving to the Lord,"

Yes, I think that's a fair characterization of how we treat tithing.

"therefore I must not question or criticise what the church does with it because that would essentially be questioning or criticising God."

I think this is less correct. 

Again, I think members of the Church have a right to raise questions and concerns about what the Church is doing (in an appropriate time, place and manner).

The Church's leaders are not God.  They are not perfect.  Part of their responsibilities involve acting as stewards of sacred funds.  There is no way the Brethren will ever placate every member (let alone persons outside the Church) who disagree with their stewardship competency, largely because there will never be any consensus.

Despite their errors and imperfections, however, it is our duty to sustain them. Not, I think, in any mindless or knee-jerk way.  But I think we need to give them quite a bit of leeway.  How they manage their stewardship of the Lord's funds is something most of us can only perceive in very broad strokes, so we are be missing a lot of information.  Moreover, the management of those funds is, in the end, not within our stewardship.

I acknowledge that this is disconcerting to some people.  I also appreciate that reasonable minds can disagree about how much the Church should spend on humanitarian efforts.  The issue, I think, is that I don't think the Church will ever be able to satisfy most of its critics, both within and without.  This tends to lessen, for me, the merits of their critiques of the Church.  I just don't see a good faith critique.  I see endless faultfinding.  I see endless shifting of the goalposts.  I see these critics virtually never crediting the Church for the good it does, instead focusing on its flaws, what it - in their eyes - should be doing (which is perennially beyond the Church's accomplishments), etc.

 

I think that most reasonably-informed members understand and appreciate that the Church is doing what it has been teaching us to do: live within its means, set aside reserve funds, plan for the future, etc.  I also think that most reasonably-informed members understand and appreciate that setting aside reserve funds and planning for the future does not mean simply stuffing money in a metaphorical mattress, but instead involves prudent use and investment of such funds.  The Parable of the Talents not only lauds such prudent use by the "good and faithful servant{s}," but also condemns the servant who buried the talent given to him and did nothing with it.

I also think that most reasonably-informed members understand and appreciate that the people who have access to and control over the Church's finances have put in place numerous safeguards, oversights, checks and balances, etc. so as to reduce the risk of misuse of such funds.  We have the Council on the Disposition of Tithes, the Budget Committee, the Appropriations Committee, the Church Budget Office, the Church Audit Committee, and more.  We get annual reports from the Audit Committee.  Moreover, we see the beautiful temples, the tens of thousands of missionaries, the thousands of church buildings, the Church's humanitarian and philanthropic efforts, the canneries and storehouses, Welfare Square, Humanitarian Square, and so on.

I also think that most reasonably-informed members understand and appreciate that the Brethren are not getting rich.  Their living allowances are static, uniform and fairly modest given the amount of work they do, the skills involved, and the alternatives available to so many of them.

In sum, I think we have a pretty good idea as to where the money is going, and that it is not being spent profligately.  If anything, I suspect one of the hindrances to the Church spending more than it does on humanitarian efforts is the lack of opportunity to support vetted, credible, efficiently-managed NGOs and non-profits and such.  The Church's own efforts are admirable, but its reach could be extended even further, but for fairly widespread problems of corruption in such organizations:

Quote

"Church investments may be growing faster than the Church's ability to to give away a meaningful portion in humanitarian aid."  In other words, the Church cannot, on its own, deploy its resources on the tremendous scales involved when speaking of such vast sums of money.  It must, instead, work with various philanthropic and humanitarian groups.  That seems like a great thing, but those groups need to be vetted.  Heavily vetted.  Problems with such groups are, unfortunately, legion:

• Nonprofit Risk Management Center: A Violation of Trust: Fraud Risk in Nonprofit Organizations
• The Hauser Center: An Investigation of Fraud in Nonprofit Organizations: Occurrences and Deterrents
• FAU College of Business: Non-Profits Fraud
• Philanthropy News Digest: Fraud and Abuse in Nonprofit Organizations: A Guide to Prevention and Detection
• Nonprofit Pro: Why Nonprofits Are More Vulnerable to Fraud Than For-Profit Businesses
• New York Times: Are You Familiar With Wrongdoing Among Nonprofit Groups?
• The Globe Post: No Real Saints: How Nonprofits Take Advantage of Americans
• Procurement Express: Why Corruption in The NGO World Alienates Donors
• Taylor & Francis Online: Malfeasance in the Charitable Sector: Determinants of “Soft” Corruption at Nonprofit Organizations
• FBI: Charity and Disaster Fraud
• Britannica: Charity Fraud
• Wikipedia: Charity Fraud
• U.S. Attorney's Office (Missouri) : Springfield Health Care Charity Pays More Than $8 Million Related to Federal Embezzlement, Bribery Investigation
• CharityWatch: CharityWatch Hall of Shame: The Personalities Behind Charity Scandals
• Univ. of Dayton Law School: Fraud and Corruption in U.S. Nonprofit Entities: A Summary of Press Reports 2008-2011

And many, many more.

The second point is also noteworthy: "To give billions in direct aid, the Church may also need to set up a separate, global organization with secular governance."  They cite the Red Cross as an example of an organization that is large (35,000 employees) and skill and experience in terms of "global personnel infrastructure to ensure compliance with local laws, managing hiring and volunteers ... prevent{ing} graft or illicit uses of funds, administer{ing} measurement and reporting, maintain{ing} financial controls, manag{ing} people safety and provid{ing} transparent reporting."

Most of us are not, I think, sufficiently cognizant of these issues.  Either that, or too many of us have an overly-simplified mindset about humanitarian work, one which reduces things to "Let's throw money at this and that will make us feel better about it."

On 5/20/2023 at 3:30 AM, Meadowchik said:

And if people who represent the church abuse the tithe we've given, they are accountable and we're not because in our eyes we gave it to God.

You'll need to define "abuse the tithe."

On 5/20/2023 at 3:30 AM, Meadowchik said:

This part here, where wealth changes hands and one person is absolutely absolved while the other person could be completely corrupt is almost like a magic trick. Realistically though it's like money laundering, but in reverse. But however you want to compare it, the act of creating an intentional blind between yourself as contributor and the institution as receiver is incredibly risky. Without accountability and transparency, this type of intentional self-absolution is a serious moral hazard.

And yet the Church has a stellar track record for the last many decades in terms of managing its finances.  

On 5/20/2023 at 3:30 AM, Meadowchik said:

Thinking more universally and beyond tithing and churches, this is arguably the most dangerous of individual human behaviors. Why? Because human beings as social creatures are the most powerful and effective when they collaborate. We human beings collectively create machines--social, political, literal machines--so powerful that no one individual can hinder or fight against. Institutions can become an individual's greatest enemy or greatest ally.

Institutions can harness good or evil. They most likely do some of both. Human morality must not neglect the problem of institutional accountability. It should be the highest priority whenever an institution is created. 

Again, the people who have access to and control over the Church's finances have put in place numerous safeguards, oversights, checks and balances, etc. so as to reduce the risk of misuse of such funds.  We have the Council on the Disposition of Tithes, the Budget Committee, the Appropriations Committee, the Church Budget Office, the Church Audit Committee, and more.  We get annual reports from the Audit Committee.  Moreover, we see the beautiful temples, the tens of thousands of missionaries, the thousands of church buildings, the Church's humanitarian and philanthropic efforts, the canneries and storehouses, Welfare Square, Humanitarian Square, and so on.

Meanwhile, there is widespread corruption and malfeasance amongst NGOs and humanitarian non-profits, yet our critics apparently want the Church to donate billions to them anyway.  Our critics complaint about "accountability," but don't seem to think about whether or not the Church is trying to do just that by carefully vetting institutional recipients of sacred funds.

Faultfinders will always succeed at their effort.  Always.

On 5/20/2023 at 3:30 AM, Meadowchik said:

With this in mind, humans have been wrestling with this concept throughout history and the struggle isn't over and as long as people are coming together to create, it never will be. 

There is a sentiment of resignation in the face of this responsibility we have. I think that the common American fantasy of bugging out to a frontier and living off the grid is an extreme example. Another example of resigning to the overwhelming task of institutional morality is more common, and that's passivity. 

I am pretty happy with how the Church manages sacred funds.  I repose far more trust in it than most other institutions.

I don't want to bug out or resort to indifferent passivity.  Fortunately, the above-referenced oversights and checks and balances allow the Saints a pretty good basis for reposing trust in the institutional Church's management of sacred funds.

On 5/20/2023 at 3:30 AM, Meadowchik said:

And even if we don't want to be passive, it's much harder to be good sentinels or stewards of our institutions if we are already falling behind in other tasks. Illness, poverty, caring for others can make anything outside of our immediate spheres seem irrelevant. And yet, ironically, it is human institutional power that is one of the greatest enemies of illness and poverty and the greatest allies to us when we are trying to care for others. 

We have to be invested to keep our institutions moral.

I quite agree.    And part of how Latter-day Saints can do that is to keep their covenants, including tithes.

I get that there are a number of rationalizations which can facilitate an individual's choice to disobey this principle.  In the end, though, I reiterate my comment about our covenant-keeping being contingent on how others fare in handling their covenants and stewardships.

Thanks,

-Smac