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Not Tithing Funds (ii)


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On another thread, @smac97 accused me of "wildly mischaracterized the position of a large number of Latter-day Saints on this board (regarding what they understand is, and is not, "tithing"). 

That accusation seems really odd to me, because as far as I know, I have never said anything about what Latter-day Saints on this board or elsewhere understand tithing to be or not to be. I have claimed to understand how many Latter-day Saints on this board interpreted various statements about tithing funds not being used, but I’m completely unaware of any controversy about what the word “tithing" actually means to Latter-day Saints.

I’ve been told I’m not a reliable source of interpreting what people have said on this forum. I think @smac97 isn't reliable, because he wants to rewrite history in support of his preferred legal arguments in contemporary after-the-fact legal cases. If I’m wrong, please disabuse me.

In 2015, @Stone holm asked the following question:

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Another thread got locked before I could ask a question, so will ask it now. One frequently hears the statement that tithing funds were not used for such and such an investment. And while I like to think that is true, I have to pause and think...if not tithing then what funds were used? Surely not Fast Offerings, too many those are even more sacred as to their dedicated use, and surely not missionary funds. So, what are these mysterious "not tithing" funds?

We now know that funds from Ensign Peak Advisors were used, and we know that Ensign Peak Advisors got its money because every year, the Church sent excess tithing revenue to it. But how did Saints answer Stone holm’s question then? And why did he ask the question in the first place?

I think @The Nehor’s answer was typical. He said:

Income from church owned businesses and sometimes from direct donations from members for a specific purpose.

Note that he did not say anything about investment income on unspent tithing.

@Brian 2.0follow-up question:

Are these church owned businesses started via tithing? Is interest earned from tithing dollars considered "not tithing"? 

@Robert F. Smith answered Brian's question thusly:

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There a great many original non-tithing sources of funds, beginning with Martin Harris mortgaging his farm to get the Book of Mormon printed.  The revolving Perpetual Emigration Fund used to get people into the Valley, and now the Perpetual Education Fund.  Huge donations and loans of that kind have always been available.  It used to be that local members were assessed for building contributions (ward & stake meeting houses, temples), though that isn't done anymore.  However, members can still choose to contribute to temple, fast offerings, and humanitarian aid funds (they have separate boxes in the tithing slip and are not tithing contributions).  When I was financial clerk I noticed that some members gave substantial contributions to these funds without being asked, and LDS members donate far more per captia to charity than members of other religions.

Note that he didn’t directly say whether or not he thought interest earned from tithing dollars was considered tithing, but he did give a seemingly plausible explanation for how the Church could have funded the mall without relying on tithing or on interest earned from unspent tithing.

@The Nehor answered the question thusly: "

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Most likely not from tithing. Most church businesses are descendants from early church businesses set up around the time they came to Utah. Tithing payment was sporadic at best before President Snow. Some of the businesses were set up by investors with the church running it. Others were donated. Later the church sold many of these businesses off. I would not be surprised if no tithing money ever went to church businesses but I suppose it is possible it happened in the past. If that offends you be offended.

I have no idea about interest. If you want to strain at that gnat have fun.

@Storm Rider focused on the word “fund” and said, "Investment funds may go into Church funds, but I am not aware of it going the other way around..."

We now know he is wrong about that--every year, tithing money is sent to Ensign Peak Advisors to be invested in stocks, bonds, and real estate. 

@rongo said "Bishop Burton explained to a group of bishops in our stake a few years ago that there is only one account in the Church. All money (tithing, fast offerings, business profit, PEF, humanitarian, etc.) all goes into one account in reality...."

Responding to that point by rongo, @bluebell said, "This means that no one can guarantee that tithing money wasn't used for the mall though, right?"

Robert F. Smith answered Bluebell’s question thusly: "Not at all.  If the Church leaders say that no tithing funds were used, I think we ought to give them the benefit of the doubt.  There are plenty of for-profit funds available, which are subject to taxation, by the way.  The IRS knows how to distinguish types of funds from each other."

Notice that he is talking about “funds” and is comparing “tithing funds” with “for-profit funds.” Also note that Ensign Peak Advisors is a non-profit fund.

@Mystery Meat said, "Sigh. I repeat no tithing funds were used, NOR were the funds used ever sourced in tithing. Here is the simple "how". The Church has been in Utah for a long time. When they got here, what is now Utah was Mexico. The early pioneers had a lot of land at their disposal. The Church got a lot of this land (didn't pay for it). A lot of this land was used in a way that generated revenue. This revenue was used to grow for profit businesses. That is the very simple answer. "

Notice how confident Mystery Meat is. No tithing funds were used. Nor were the funds used ever sourced in tithing.

@Mystery Meat then says, “The Nehor is wise. I can (and have) attest to this. But this is the truth. The for profit arm of the Church has never been funded by tithing dollars."

@rodheadlee and @Robert F. Smith both upvoted those comments.

@readstoomuch said, "I do believe that no tithing money was used for CityCreek. I think the big argument was about where the money came from to start the businesses that provided the capital."

Those responses are typical of how apologists answered the question. One thing they have in common is that to various degrees, they are all unaware of Ensign Peak Advisors.

The first post that head the nail on the head showed up on page 3, about 44 posts into the topic. @Stone holm said:

"Given that during the Presidency of Lorenzo Snow, the Church was essentially broke, I think we could probably discount the idea that the source of the funds predates that. I suspect we could argue that the funds came from the days when the Church lived the Order of Enoch, but that raises a whole host of other questions. Then again, we might argue that it is really money from special donations like the Marriot Center or Nauvoo. But I suspect the most coherent assertion is we are not considering interest on tithing as tithing. BTW I don't have a problem with slum removal which is what the mall was really about, just feel a little uncomfortable with the no tithing claim."

Note the following three things:

  1. Stone holm was exactly right
  2. Stone holm said at the time this was an explanation that “we are not considering"
  3. Stone holm’s post got zero upvotes

(to be continued...)

 

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My assertion is that the quotes above are representative of how Saints at the time interpreted the assertion that “no tithing money would be used."

There was another thread on the topic from 5 years earlier that asked the same question:

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When people accuse the Church of using sacred tithing money to fund things like the building of the City Creek mall, the obvious answer is of course that tithing money is not used; rather money from the for-profit arm of the church is used that was obtained through business investments over the years.

But then of course critics ask the next question; "Where do you think the church got the money to buy the businesses in the first place?"

And they conclude that It must have started with tithing money donated by early church members. So in an indirect way the City Creek mall was made possible by sacred tithing money donated by members 150 years ago; money that is supposed to be dedicated to building God's church and helping the poor; not for building shopping malls. How does one respond to this?

 

In answering that question, Craig Paxton said, "It is disingenuous for the church to claim that no tithing funds were used to fund the City Creek Mall. Member Pays Tithing --> Tithing in Excess of Current Needs is Invested --> Investments Earn Return --> $$$ From This Return on Investments is Reinvested in the City Creek Mall."

Craig Paxton was exactly right. 

Pahoran responded to Craig’s accurate post with, "Yes, I can see how someone with no awareness of history might assume some process similar to the above. I won't ask if you have a reference for your assumption, because of course we both know that you don’t."

But in giant purple letters,  @Scott Lloyd saidCFR

@Mola Ram Suda Ramsaid, "I 2nd that. I think he is fluff and stuff."

@JAHSsaid, "Any references that support the statement that "Tithing in Excess of Current Needs is Invested”?"

Craig Paxton replied to these 3 CFRs thusly:

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CFR? I"m gooing to assume that you are smart enough to follow the dots... When the LDS Church takes in more donations than it pays out in current expenses, it uses the surplus to build a reserve for capital expenditures and for future years when period expenses may exceed donations. The LDS Church invests its re

serve to maintain the principal and generate a reasonable return and directs its investments into income-producing assets that may help it in its mission, such as farmland, communication-related companies and commercial realestate.

Come on...surly you're not niave enough to think that excess funds beyond those not needed in curent years arn't invested...what you think the church would NOT invest expess funds? Now that would be naive.

 

Again, Craig Paxton was exactly right.

The moderators responded to that last post by Craig Paxton with:

No need to report this. Craig has been suspended for a week.

The conversation went on, and Craig Paxton eventually asked, "I hate that believers get so defensive at the very suggestion that tithing funds were used...or even that the investment income from tithing funds were used...good greif....chill out"

How did the apologists respond to this?

@thesometimesaint said, "The Church officers have publically stated that no tithing funds were used in the purchase of the mall. You are calling those Church officers liars. Provide proof of your claim or retract it."

And another apologist by the name of Jeff K. said, "Why is it a big deal when people who are no longer part of my faith question the honesty and integrity of those who I find honest and with integrity?"

And @Deborahanswered, "Because the First Presidency has said they weren't and you are calling them liars. Shouldn't be that hard to figure out."

And selek1 answered, "Perhaps because it is a malicious falsehood being repeated by those whose goal is to undermine the Church?"

Remember. The question they were talking about was "Where do you think the church got the money to buy the businesses in the first place?"

Craig Paxton was exactly right when he said, excess tithing money was invested, and that investment income was used. thesometimessaint, Jeff K., Deborah, and selek1 all thought that by saying this, he was calling the Church liars for saying that tithing funds weren’t used.

Note that none of this has to do with the definition of tithing. That wasn’t an issue until some attorneys decided to rewrite history.

Am I wrong? If I am, when Paxton asked why everyone was so mad at him for saying what we now know is the truth, why did @thesometimesaint accuse him of “calling those Church officers liars”? Why did @Deborah accuse Paxton of calling the first presidency liars?

It is obvious to me that the Latter-day Saints who took issue with Paxton’s comments interpreted Hinckley exactly the same way James Huntsman did.

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13 hours ago, rodheadlee said:

So, what you're saying is money made from tithing money is tithes? And we owe Craig an apology?

I’m not saying anything about the definition of the word “tithes,” and as far as I can tell that wasn’t a topic of conversation back then.

On September 23, 2023, I said the following:

"What I do know is that this issue was discussed before the IRS Letter came out, and I know that back then, the assertion that the mall was funded by interest on unspent tithing revenue was a cynical, even anti-Mormon position."

Compare that to the quotes above related to Craig Paxton, e.g. "I hate that believers get so defensive at the very suggestion that tithing funds were used...or even that the investment income from tithing funds were used...good greif....chill out” (March 23, 2012)

What I would be very interested in hearing from you is what you think about the accuracy of what I put in bold. Was that a basically fair summary of the conversation I was remembering from over a decade earlier?

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Posted (edited)
37 minutes ago, bluebell said:

I've been trying to figure out how to respond to this thread, since I was tagged in it, but I haven't been very successful. 

That other thread that my quote was taken from is almost 10 years old.  I have no idea what else I posted in it, or whether or not my feelings about the issue have changed much.  My quote on this thread doesn't really shed any light on what my feelings on the issues back then were exactly.

I feel pretty good suggesting that my understanding tithing and how it all works has improved over the last almost 10 years as situations have presented themselves that have allowed/caused me to look into it further.  My understanding of what Pres. Hinckley said has also evolved as I've received more information.

My understanding of Rongo's statement has also grown more perplexed and less accepting at face value, because the idea that the church has one account with billions of dollars sitting in it seems kind of nonsensical after everything else that I've learned.  And if I wasn't understanding his words accurately, then my reply to him means even less than it once did.

There really is only one checking account in the Church. As Bishop Burton explained (it was in answer to my question at a bishops' Q&A), it would be crazy to envision countless accounts that have to constantly send debits and credits back and forth. All of the money in the Church (liquid, fungible money) is thrown into one big bucket, and any check written in the Church is drawn from this one account. There are internal "categories" for bookkeeping purposes (like at the local level: the "other" accounts, budget categories, etc. --- but there really is just the ward's checking account, despite these internal categories that are on paper only). 

I think it was unwise and silly for the Church to treat "no tithing money was ever used for XYZ" as a hill to die on. It doesn't bother me that tithing money was used, for one thing, and it looks like tortured mental gymnastics to continue to treat "on paper only" internal categories as physically separate accounts. 

ETA: Bishop Burton went so far as to say that there aren't even separate accounts for fast offerings and tithing. My question was how it works when a bishop writes a fast offering check on January 1, but Sunday isn't until January 6, so there aren't any donations yet. Is this money "floated" or transferred until then? He said that this isn't how it works at all. There is only one giant account on which all checks are drawn. All income coming into the coffers goes into one account. He said there is never any danger that a check will "bounce," because there are billions in the one Church account. 

Edited by rongo
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Posted (edited)
31 minutes ago, bluebell said:

I've been trying to figure out how to respond to this thread, since I was tagged in it, but I haven't been very successful. 

That other thread that my quote was taken from is almost 10 years old.  I have no idea what else I posted in it, or whether or not my feelings about the issue have changed much.  My quote on this thread doesn't really shed any light on what my feelings on the issues back then were exactly.

I feel pretty good suggesting that my understanding tithing and how it all works has improved over the last almost 10 years as situations have presented themselves that have allowed/caused me to look into it further.  My understanding of what Pres. Hinckley said has also evolved as I've received more information.

My understanding of Rongo's statement has also grown more perplexed and less accepting at face value, because the idea that the church has one account with billions of dollars sitting in it seems kind of nonsensical after everything else that I've learned.  And if I wasn't understanding his words accurately, then my reply to him means even less than it once did.

I'm assuming that most members who have followed this topic have probably also gained more knowledge on the issue and that our understanding of it has become more nuanced than it used to be, seeing has how we've had over 10 years and a lot more information available to inform our opinions and beliefs.  So it wouldn't be surprising to see some changes and differences in what we've previously said and what we are saying now.  

I don't know if any critics' beliefs and opinions have become more nuanced or not.

 

Hi Bluebell,

First of all, thank you for weighing in.

From my perspective, we all grow, learn, and change. I’m certain your understanding of tithing and “how it all works” has improved since that old thread, and that is a good thing.

Back then, I thought Craig Paxton was right, and to me it was obvious. I wouldn’t expect everyone to share my perspective, because I am in finance and I spend a ton of time every week modeling how funds grow over time. I knew the Church takes in billions of dollars in tithing every year, I knew they saved (probably 10-15% of its annual tithing revenue) for a rainy day. I also knew that the mathematical inevitability of that was a massive rainy day fund. Further, I know that “saving for a rainy day” and “investing in for-profit businesses” are exactly the same thing for a large organization. The Church has no problem investing tithing money in Apple so that Apple can do things like build Apple stores in malls, so one would think it would have no problem investing tithing money in a mall to hold an Apple store. This was all obvious to me, as it was to Craig Paxton.

The same thing should have been obvious to a sophisticated businessman like James Huntsman, which is why I have little sympathy for his lawsuit. 

But on the other hand, I know that other people see things differently, and that is okay too. Multiple posters on this board did in fact equate the claim “the Church used interest earned on tithing revenue” to the claim “Gordon B. Hinckley lied.” If James Huntsman claims he felt that way too I’m inclined to believe him--this board has a record of other people feeling that way.

The only reason this is an issue is because @smac97 is trying to rewrite history to support his preferred defensive argument in the lawsuit, and is gaslighting us all to that end. I wouldn’t care very much about that if he wasn’t derailing threads with personal attacks against me to support these lies. Since he chose to make this personal, I feel I need to defend myself.

Edited by Analytics
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17 minutes ago, rongo said:

There really is only one checking account in the Church. As Bishop Burton explained (it was in answer to my question at a bishops' Q&A), it would be crazy to envision countless accounts that have to constantly send debits and credits back and forth. All of the money in the Church (liquid, fungible money) is thrown into one big bucket, and any check written in the Church is drawn from this one account. There are internal "categories" for bookkeeping purposes (like at the local level: the "other" accounts, budget categories, etc. --- but there really is just the ward's checking account, despite these internal categories that are on paper only). 

I think it was unwise and silly for the Church to treat "no tithing money was ever used for XYZ" as a hill to die on. It doesn't bother me that tithing money was used, for one thing, and it looks like tortured mental gymnastics to continue to treat "on paper only" internal categories as physically separate accounts. 

ETA: Bishop Burton went so far as to say that there aren't even separate accounts for fast offerings and tithing. My question was how it works when a bishop writes a fast offering check on January 1, but Sunday isn't until January 6, so there aren't any donations yet. Is this money "floated" or transferred until then? He said that this isn't how it works at all. There is only one giant account on which all checks are drawn. All income coming into the coffers goes into one account. He said there is never any danger that a check will "bounce," because there are billions in the one Church account. 

I still have questions.  For one, that would be extremely vulnerable seeing as how there is no federal protection for an accounting holding billions of dollars, right?  What if something happened to that bank?  It's also hard to fathom that the person paying for temple furniture in Bangkok is doing so with the exact same account numbers that the bishop uses to pay for Mary's electrical bill and that those are the exact same account numbers that someone else uses to buy a million square miles of ranch land in Florida. 

And then we have places like Ensign Peak, who obviously move around church funds into multiple places.  Are those not considered accounts? 

 

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24 minutes ago, Analytics said:

Hi Bluebell,

First of all, thank you for weighing in.

From my perspective, we all grow, learn, and change. I’m certain your understanding of tithing and “how it all works” has improved since that old thread, and that is a good thing.

Back then, I thought Craig Paxton was right, and to me it was obvious. I wouldn’t expect everyone to share my perspective, because I am in finance and I spend a ton of time every week modeling how funds grow over time. I knew the Church takes in billions of dollars in tithing every year, I knew they saved (probably 10-15% of its annual tithing revenue) for a rainy day. I also knew that the mathematical inevitability of that was a massive rainy day fund. Further, I know that “saving for a rainy day” and “investing in for-profit businesses” are exactly the same thing for a large organization. The Church has no problem investing tithing money in Apple so that Apple can do things like build Apple stores in malls, so one would think it would have no problem investing tithing money in a mall to hold an Apple store. This was all obvious to me, as it was to Craig Paxton.

The same thing should have been obvious to a sophisticated businessman like James Huntsman, which is why I have little sympathy for his lawsuit. 

But on the other hand, I know that other people see things differently, and that is okay too. Multiple posters on this board did in fact equate the claim “the Church used interest earned on tithing revenue” to the claim “Gordon B. Hinckley lied.” If James Huntsman claims he felt that way too I’m inclined to believe him--this board has a record of other people feeling that way.

The only reason this is an issue is because @smac97 is trying to rewrite history to support his preferred defensive argument in the lawsuit, and is gaslighting us all to that end. I wouldn’t care very much about that if he wasn’t derailing threads with personal attacks against me to support these lies. Since he chose to make this personal, I feel I need to defend myself.

Yeah sorry, I have no idea what has been said between you and Smac on the issue.  I doubt many other posters do either and that could be why no one is engaging on this thread.  Those discussions are painful to try to follow.  :lol:

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14 minutes ago, rongo said:

There really is only one checking account in the Church. As Bishop Burton explained (it was in answer to my question at a bishops' Q&A), it would be crazy to envision countless accounts that have to constantly send debits and credits back and forth. All of the money in the Church (liquid, fungible money) is thrown into one big bucket, and any check written in the Church is drawn from this one account. There are internal "categories" for bookkeeping purposes (like at the local level: the "other" accounts, budget categories, etc. --- but there really is just the ward's checking account, despite these internal categories that are on paper only). 

I think it was unwise and silly for the Church to treat "no tithing money was ever used for XYZ" as a hill to die on. It doesn't bother me that tithing money was used, for one thing, and it looks like tortured mental gymnastics to continue to treat "on paper only" internal categories as physically separate accounts. 

Most non profits and government entities use a funds based accounting system, rather than a profit/loss based accounting system.  This can be very confusing to those who don't have a background in funds based accounting.

I currently serve on a local city council.   Our particular city uses two bank accounts, a checking account, and an investment account.  To an outside person, it would seem that the city is just sitting on a pile of money in two bank accounts and that all of the money can be used for anything. Despite  the  fact that there are only two bank accounts, there are numerous "Funds".  These funds (park fund, general fund, library fund, street maintenance fund,  sewer fund, cemetery fund,  capital improvement fund, and a few others I cannot remember at the moment.   Each of these funds has an income source and expenditures are restricted on what they can be used for.  There is even borrowing from one fund to another fund where notes have to be drafted and interest paid.  Segregation of these funds is a serious matter, even though there are only two actual bank accounts.   People  have been fined for using the wrong fund for the wrong purpose, even though all the money may be in one bank account. 

 

Fund segregation is a real thing. and when the church said that tithing funds weren't used for a particular project, they were using the word "fund" in a funds based accounting sense.  

Segregating investment income from contributions is a normal thing in the non profit accounting world.  For example in the form 990, the form that charities use to report their activities to the IRS, on page one (the summary page) you have line 8, contributions or grants (which is where tithing and similar contributions would be reported), and then you have line 10, investment income.  These are two separate lines because they are considered two separate things.

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Posted (edited)

 

31 minutes ago, Danzo said:

Most non profits and government entities use a funds based accounting system, rather than a profit/loss based accounting system.  This can be very confusing to those who don't have a background in funds based accounting.

I currently serve on a local city council.   Our particular city uses two bank accounts, a checking account, and an investment account.  To an outside person, it would seem that the city is just sitting on a pile of money in two bank accounts and that all of the money can be used for anything. Despite  the  fact that there are only two bank accounts, there are numerous "Funds".  These funds (park fund, general fund, library fund, street maintenance fund,  sewer fund, cemetery fund,  capital improvement fund, and a few others I cannot remember at the moment.   Each of these funds has an income source and expenditures are restricted on what they can be used for.  There is even borrowing from one fund to another fund where notes have to be drafted and interest paid.  Segregation of these funds is a serious matter, even though there are only two actual bank accounts.   People  have been fined for using the wrong fund for the wrong purpose, even though all the money may be in one bank account. 

Fund segregation is a real thing. and when the church said that tithing funds weren't used for a particular project, they were using the word "fund" in a funds based accounting sense.  

I think we are on the same page, but I don’t have a background in fund based accounting, so if I may, can I ask a few questions?

In fund-based accounting, what happens to the investment income of money in funds? For example, say there is a special tax for the sewer fund, so that 100% of the tax revenue from that special tax goes into the sewer fund. Then say the money in the sewer fund grows with interest. Does the investment income stay in the fund too? 

I would presume the city could set it up either way--maybe a fund is funded by a flat budget amount, or maybe it is funded by money that is collected and the budgeting process indicates that the fund will grow with interest. Am I wrong about that?

31 minutes ago, Danzo said:

Segregating investment income from contributions is a normal thing in the non profit accounting world.  For example in the form 990, the form that charities use to report their activities to the IRS, on page one (the summary page) you have line 8, contributions or grants (which is where tithing and similar contributions would be reported), and then you have line 10, investment income.  These are two separate lines because they are considered two separate things.

They are two different sources of income, but once received, they aren’t two different types of assets. And when assets are spent, they generally wouldn’t keep track of whether a dollar paid came from contribution and grants, program service revenue, and investment income.

Presumably you receive compensation for your service on the city council. Does your paycheck indicate how much of your salary was funded by taxes, how much was funded by investment income, and how much was funded by other sources of revenue?

If the Church says “tithing funds weren’t used for project X” and that is to be interpreted as meaning money in the “tithing fund” wasn’t used, what does that mean, especially given what we know in the post whistleblower world?

I would think it means that money from the tithing fund was transferred to the rainy day fund, and that money from the rainy day fund was used to help pay for the mall. Would you agree with that?

Edited by Analytics
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Posted (edited)
On 5/7/2024 at 2:25 PM, Analytics said:

The moderators responded to that last post by Craig Paxton with:

No need to report this. Craig has been suspended for a week.

Knowing how the  mods usually operate, I suspect it was more than just that post and the refusal of the CFR they were responding to as usually it’s multiple requests for CFRs before someone disappears, but that might be more due to timing and the delay that can occur between a report and a banning.

However, besides refusing to provide a reference for his speculation presented as fact (what prompted the CFR from Scott) he called the Church leaders liars and criminals (money laundering).  My guess is the last is what got him suspended for the week.  Enough call the church leaders liars I would be surprised if someone reported him for that, though if I have gotten more indifferent to the frequent type of criticisms, no doubt others have over time as well, so perhaps calling them liars would have been enough back then.

However, the money laundering accusation, which is accusing leaders of participating in criminal behaviour, would have triggered a report from me if it was made yesterday, so it is quite possible I reported him for that 12 years ago.  

https://www.mormondialogue.org/topic/57308-was-my-mormon-ancestors-tithing-used-to-build-city-creek-mall/?do=findComment&comment=1209103706

Added:  Minos provided an explanation of the banning:

as did Skylla

 

Edited by Calm
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Posted (edited)
1 hour ago, Analytics said:

 

I think we are on the same page, but I don’t have a background in fund based accounting, so if I may, can I ask a few questions?

In fund-based accounting, what happens to the investment income of money in funds? For example, say there is a special tax for the sewer fund, so that 100% of the tax revenue from that special tax goes into the sewer fund. Then say the money in the sewer fund grows with interest. Does the investment income stay in the fund too? 

I would presume the city could set it up either way--maybe a fund is funded by a flat budget amount, or maybe it is funded by money that is collected and the budgeting process indicates that the fund will grow with interest. Am I wrong about that?

They are two different sources of income, but once received, they aren’t two different types of assets. And when assets are spent, they generally wouldn’t keep track of whether a dollar paid came from contribution and grants, program service revenue, and investment income.

Presumably you receive compensation for your service on the city council. Does your paycheck indicate how much of your salary was funded by taxes, how much was funded by investment income, and how much was funded by other sources of revenue?

If the Church says “tithing funds weren’t used for project X” and that is to be interpreted as meaning money in the “tithing fund” wasn’t used, what does that mean, especially given what we know in the post whistleblower world?

I would think it means that money from the tithing fund was transferred to the rainy day fund, and that money from the rainy day fund was used to help pay for the mall. Would you agree with that?

Lots of good questions here.

In the last city council meeting there was an issue with the Library fund borrowing money from the cemetery fund (Cemetery funds just sit around until all of the plots are sold so we borrow from them a lot)  The library was going to pay back the cemetery fund with interest and the council wanted to waive the interest to allow for more money for books, less money for the dead people.   We were informed that the cemetery fund doesn't earn interest even though a portion of the cemetery funds were in the investment account.  So it would appear that in this case that the cemetery fund doesn't accrue interest. In other words any interest goes to the general fund.  I scanned through the last years budget and I don't see investment income for any fund other that the general fund.  Maybe I will ask the finance director  if there is any fund where interest is restricted to the fund just to be sure.

The city pays me 100 dollars a month to be on the council, this comes from the general fund. There are many funding sources, in fact the interest revenue would cover my salary, many taxes go into the general fund, but I am not paid from development fees, not payed from sewer fees, library or parks fees.

Funds are not the same thing as assets (although total of all funds balances + Liabilities = Assets).  Funds are internal restrictions on money that an organization has.  But just because they are internal accounting creations doesn't mean they are not real. For example, in the city I serve there are just two liquid assets, bank account and Investment account. but the money in them is internally divided into many, many different funds (I counted 17 different funds when I just glanced at the budged).

I suspect something similar with the church the assets could be in one, two or many different bank and investment accounts, and other investments.  Internally those funds available are restricted in to different categories that really correspond to the actual assets.

 

If the church said that it spent funds from one category and not another category (tithing vs investment), and they are not just making things up, I would assume that internally they have different fund accounts that use to segregate their assets.  If they didn't have a funds accounting system, the statement wouldn't mean anything.  (How would you know the source of an expenditure if you didn't have a system of keeping track of these things?)

I think the church keeps track of its revenue sources and categorizes them as donations, offerings, investments income, service fee income (revenue from church magazines, temple cafeteria, etc.), revenue from businesses that they own and other sources.

Money from from investments and church business probably goes on their bookkeeping system as a separate fund.  When they make money from investments, the investment fund goes up. When they write a check for the  the city mall, the money in the bank account goes down and the money available in the investments fund goes down.  They probably have some sort of fund for ecclesiastically  activities like building a temple, that fund goes up when tithing comes in and when they write a check to build a temple, that fund balance goes down.  

In either case, the city mall check or the temple check, the money could come from the same bank account, but internally it is recorded differently.  

This example is simplified since the church obviously has more than one account they could draw funds from but the account is not the same as the fund, also the city creek check might be booked as an asset and fund might not go down for that reason. the same for the temple since that as well would be an asset and the fund balance might not be reduced. 

Hope that helps

 

 

 

 

 

 

 

Edited by Danzo
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1 hour ago, bluebell said:

I've been trying to figure out how to respond to this thread, since I was tagged in it, but I haven't been very successful. 

That other thread that my quote was taken from is almost 10 years old.  I have no idea what else I posted in it, or whether or not my feelings about the issue have changed much.  My quote on this thread doesn't really shed any light on what my feelings on the issues back then were exactly.

I feel pretty good suggesting that my understanding tithing and how it all works has improved over the last almost 10 years as situations have presented themselves that have allowed/caused me to look into it further.  My understanding of what Pres. Hinckley said has also evolved as I've received more information.

My understanding of Rongo's statement has also grown more perplexed and less accepting at face value, because the idea that the church has one account with billions of dollars sitting in it seems kind of nonsensical after everything else that I've learned.  And if I wasn't understanding his words accurately, then my reply to him means even less than it once did.

I'm assuming that most members who have followed this topic have probably also gained more knowledge on the issue and that our understanding of it has become more nuanced than it used to be, seeing has how we've had over 10 years and a lot more information available to inform our opinions and beliefs.  So it wouldn't be surprising to see some changes and differences in what we've previously said and what we are saying now.  

I don't know if any critics' beliefs and opinions have become more nuanced or not.

I am curious if you have ever considered "tithing" to mean both

(A) a member's voluntary donation of money to the Church (typically 1/10th of one's "increase"), and also

(B) interest/revenue that the Church obtains from investing a portion the tithes donated per (A).

In this post from last year I quoted excerpts from posts from various Latter-day Saints in two older threads from 2012 (here and here) and one from 2015 (here) to evaluate how Latter-day Saints were using the word "tithing" in those threads (that is, whether they were using it in a way approximate to (A) only, or to both (A) and (B)).  My post was in response to this statement from Analytics:

Quote
Quote

 

Is there anything in the realm of finance that supports that interest earned or returns on investment are the same as the principle?

From religious standpoint, tithing has a set definition.  

 

The definition of “tithing” is the wrong question. The real question is how did reasonable Saints, including Huntsman, interpret “I wish to give the entire Church the assurance that tithing funds have not and will not be used….”

In that context, what is a tithing fund? Is it a fund into which tithing is deposited? That fund contains both principal and interest.

Many apologists interpreted Hinckley that way. Others focused on the word “using” and believed that using tithing to generate interest to build a mall was still using tithing to build a mall.

Analytics is quoting a 2003 talk by Pres. Hinckley in which he states:

Quote

We feel we have a compelling responsibility to protect the environment of the Salt Lake Temple. The Church owns most of the ground on which this mall stands. The owners of the buildings have expressed a desire to sell. The property needs very extensive and expensive renovation. We have felt it imperative to do something to revitalize this area. But I wish to give the entire Church the assurance that tithing funds have not and will not be used to acquire this property. Nor will they be used in developing it for commercial purposes.

Funds for this have come and will come from those commercial entities owned by the Church. These resources, together with the earnings of invested reserve funds, will accommodate this program.

To me, it appears that Pres. Hinckley was clearly differentiating between tithes ("tithing funds") and "funds" procured from other sources ("from those commercial entities owned by the Church" and from "the earnings of invested reserve funds."

Analytics claimed that some portion of Latter-day Saints interpreted Pres. Hinckley's remarks in such a way as to justify the notion that "using tithing to generate interest to build a mall was still using tithing to build a mall."  IOW, that "tithing" refers to both (A) and (B) above.

I quoted you as follows:

Quote

Bluebell:

Quote

Whoever came up with the idea of "non-tithing funds" should get a statue erected to their honor in Temple square, and the BYU Accounting school named after them. 

I'm not exactly sure i'm understanding you.

When they say 'non tithing funds' they mean that money that people paid as tithing was not used.  Given that, what 'conditions of tithing' that you are talking about? Tithing is not paid on tithing and i can't think of any other conditions you might be referring to.

And here:

Quote

Bluebell: "The church has more avenues of revenue than tithing, fast offerings, and humanitarian aid though.  Given that, i'm not sure why we have to assume that the overhead is paid by tithing, especially when they have specifically told us what tithing is used for and overhead is not listed."

I summed up my assessment as follows:

Quote

If the Latter-day Saints believe that A) the Church stated that the funds for City Creek did not come from tithing, and also B) the Church actually used from for City Creek, then those funds, ipso facto, are not "tithing funds," and the Latter-day Saints are not treating "tithing" as being synonymous with all other sources of Church income.  So it won't do for you to cram into our mouths and minds the notion that "tithing" includes monies that are not tithes.  You are just making that up.

Observant and conversant Latter-day Saints understand what "tithing" is, and what it means, and what it is not and what it does not mean.  (For that matter, I think the overwhelming majority of all people familiar with a dictionary would not subscribe to your tortured re-definition of "tithing.")

Latter-day Saints understand that the Church receives "tithes" from members (a tenth of their income), but also has other sources of income.  Fast offerings.  Charitable donations (such as to LDS Philanthropies), earnings on investments, for-profit ventures, and so on.

Latter-day Saints do not, per your suggestion, conflate these various sources of income as all falling under the rubric of "tithing."  Tithing has an actual and fairly specific definition and meaning.

A tithe is a donation by a member of the Church amounting to a tenth of his income.

A fast offering is a numerically distinct and separate and additional donation by a member of the Church, generally equivalent to the money that would have been spent on two meals (some members give more, some give less).  A fast offering is money that belongs to the Church, but it is not a "tithe," and tithing is not a fast offering.  The two are not synonymous.

A profit generated by EPA investing money in stocks, bonds, etc. is money that belongs to the Church, but such earnings on EPA's investments is not a "tithe" and tithing is not money generated by the EPA's investment efforts.  The two are not synonymous.

And so on.

Though derived from different sources, all of the monies held by the Church are held in trust.  All of these monies belong to the Lord.  All of these monies are, therefore, "sacred funds."  But not all "sacred funds" are "tithing."  Latter-day Saints, as shown above, do not believe that.  Nor does the Church teach that.

Huntsman's lawsuit is, in my view, on life support.  The only way it can survive is if the courts are willing to re-define "tithing" for the purposes of interpreting Pres. Hinckley's 2003 statement, and to re-define it to conflate "tithes" with other sources of income, such as interest and/or investments ("using tithing to generate interest to build a mall was still using tithing to build a mall").  

I have elsewhere commented on Huntsman's and Analytics' novel definition of "tithing" here:

Quote

If the Church receives a $1,000 tithe, and invests it, and if that investment yields a profit of $200, then the amount of the tithe was $1,000, not $1,200.

This is nothing new or unique.  There is a lot of special pleading going on in this thread.  "Tithing" is being re-defined not because it makes sense, and not because the term is difficult to understand, but because the Church is in the crosshairs.

If I take out a loan for $1,000, and thereafter invest it and generate a profit of $200, the loan amount remains $1,000, not $1,200.  The $200 was not part of the loan, and it would be contrived and absurd to suggest otherwise.

I think the vast majority of conversant and observant Latter-day Saints will find Analytics re-definition to be flawed, to be ad hoc, contrived, and nonsensical.  As I previously summed up:

Quote

To sum up what the Latter-day Saints were saying back in 2012 and 2015:

  • "Tithing and other consecrated funds"
  • "the funds for the mall did not come from tithing"
  • "if they say tithing money is not used for the building of things like the mall I can believe them"
  • "{tithing} slips have provided ways to distinguish between various types of offerings"
  • "Our leaders have stated plainly that no tithing funds were used"
  • "I will continue to give whatever excess funds I can, apart from tithing, for the fast offering, for the Church Humanitarian fund, for the Perpetual Education Fund..."
  • "The Church has a statement saying the money did not come from tithing funds, and specifying where it did originate."
  • "{'not tithing' funds are} income from church owned businesses and sometimes from direct donations from members for a specific purpose."
  • "There a great many original non-tithing sources of funds..."
  • "The Church has more than one bucket of investment funds.  It has a diversified portfolio of almost all investment opportunities - stocks, bonds, real estate, etc.  Church funds, tithing funds, are not commingled with investment funds."
  • "When someone at Church HQ says that no tithing funds were used, it is very likely true."
  • "If the Church leaders say that no tithing funds were used, I think we ought to give them the benefit of the doubt.  There are plenty of for-profit funds available..."
  • "Thus the source of funds can be completely controlled, and the money for City Creek can be certified NOT to have come out of Tithing funds."
  • "I do believe that no tithing money was used for CityCreek."
  • "When they say 'non tithing funds' they mean that money that people paid as tithing was not used."
  • "All donations made to the Church through the donation process of each ward and branch go to this non profit entity.  This includes tithing, fast offering, missionary, perpetual education fund and humanitarian fund."
  • "If the statement was made that no tithing funds were used, I am confident that is the case."

That sure sounds like what Latter-day Saints are saying now, in 2023, in this thread.  If the Latter-day Saints believe that A) the Church stated that the funds for City Creek did not come from tithing, and also B) the Church actually used from for City Creek, then those funds, ipso facto, are not "tithing funds," and the Latter-day Saints are not treating "tithing" as being synonymous with all other sources of Church income.  So it won't do for you to cram into our mouths and minds the notion that "tithing" includes monies that are not tithes.  You are just making that up.

The Latter-day Saints differentiate what Huntsman and Analytics want to conflate.  If I am wrong about that, I would like to see it.

Thanks,

-Smac

 

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Posted (edited)
2 hours ago, Danzo said:

Most non profits and government entities use a funds based accounting system, rather than a profit/loss based accounting system.  This can be very confusing to those who don't have a background in funds based accounting.

I currently serve on a local city council.   Our particular city uses two bank accounts, a checking account, and an investment account.  To an outside person, it would seem that the city is just sitting on a pile of money in two bank accounts and that all of the money can be used for anything. Despite  the  fact that there are only two bank accounts, there are numerous "Funds".  These funds (park fund, general fund, library fund, street maintenance fund,  sewer fund, cemetery fund,  capital improvement fund, and a few others I cannot remember at the moment.   Each of these funds has an income source and expenditures are restricted on what they can be used for.  There is even borrowing from one fund to another fund where notes have to be drafted and interest paid.  Segregation of these funds is a serious matter, even though there are only two actual bank accounts.   People  have been fined for using the wrong fund for the wrong purpose, even though all the money may be in one bank account. 

 

Fund segregation is a real thing. and when the church said that tithing funds weren't used for a particular project, they were using the word "fund" in a funds based accounting sense.  

Segregating investment income from contributions is a normal thing in the non profit accounting world.  For example in the form 990, the form that charities use to report their activities to the IRS, on page one (the summary page) you have line 8, contributions or grants (which is where tithing and similar contributions would be reported), and then you have line 10, investment income.  These are two separate lines because they are considered two separate things.

This makes more sense, but still seems highly problematic when dealing with more than one country’s tithing surplus (though there are that many that have a surplus iirc) with restrictions on taking funds/donations out of the country.

Edited by Calm
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7 minutes ago, smac97 said:

I am curious if you have ever considered "tithing" to mean both

(A) a member's voluntary donation of money to the Church (typically 1/10th of one's "increase"), and also

(B) interest/revenue that the Church obtains from investing a portion the tithes donated per (A).

 

 

I don't think I have ever considered it to be both, but if I have in the past I don't any longer.

If I invested $100 dollars my grandmother gave me for my birthday, the money that came from that investment wouldn't be the gift from my grandmother.  

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10 minutes ago, Calm said:

This makes more sense, but still seems highly problematic when dealing with more than one country’s tithing.

Maybe each country has its own tithing fund so the church can assure it's being handled legally?

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37 minutes ago, Calm said:

This makes more sense, but still seems highly problematic when dealing with more than one country’s tithing surplus (though there are that many that have a surplus iirc).

Obviously, the church has more than one bank account, they would need multiple bank accounts just to deal with banking situations in different countries.  On my mission in Italy, we used a bank that doesn't exist in the US.

My point is that bank accounts aren't the same as funds.  The church probably has a fund called "tithing" (which may be broken up into several sub funds based on country or other criteria) that are spread out among various bank accounts. 

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30 minutes ago, bluebell said:

Maybe each country has its own tithing fund so the church can assure it's being handled legally?

This is my belief.

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27 minutes ago, bluebell said:

I don't think I have ever considered it to be both, but if I have in the past I don't any longer.

If I invested $100 dollars my grandmother gave me for my birthday, the money that came from that investment wouldn't be the gift from my grandmother.  

This is my sense as well.  I also think this would hold for most conversant and observant Latter-day Saints. 

Analytics, however, wants us to believe that many of us conflate tithing with other sources of income.  I find this claim contrived, ad hoc, and plainly incorrect.

Thanks,

-Smac

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1 minute ago, smac97 said:

This is my sense as well.  I also think this would hold for most conversant and observant Latter-day Saints. 

Analytics, however, wants us to believe that many of us conflate tithing with other sources of income.  I find this claim contrived, ad hoc, and plainly incorrect.

Thanks,

-Smac

In my very limited experience, a lot of members do initially lump tithing and the investments from tithing, etc. all into the tithing category.  I've heard that expressed more than once.  But usually, when you talk it out for a bit and talk about it in terms of how interest and investments work in their own lives, they change their thinking on it because it becomes pretty obvious how the interest or the return on investment does not become the principle.  The principle is a separate thing.

But a lot of members never do really get to discuss it or consider different angles so in those cases, the idea that tithing is the same as investments from tithing probably lingers.

 

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Posted (edited)
21 minutes ago, Danzo said:

Obviously, the church has more than one bank account, they would need multiple bank accounts just to deal with banking situations in different countries.  On my mission in Italy, we used a bank that doesn't exist in the US.

My point is that bank accounts aren't the same as funds.  The church probably has a fund called "tithing" (which may be broken up into several sub funds based on country or other criteria) that are spread out among various bank accounts. 

I am not debating your claims as they have made sense to me (and hopefully I understand them like you intend me to understand them :) ), but Rongo’s claim*** the Church has one checking account.  I don’t see it as likely that bishops in Canada, Japan, Russia, etc write checks off the same account US bishops do…if only because of the problem I have experienced with nonUS banks accepting US banks’ checks.  There are fees for converting the money, in the past delays while they got confirmed….though all such troubles were minuscule in comparison to the hassles US Banks gave us (they freaked out and wouldn’t accept a US dollar check because it was from a Canadian bank as if US dollars would have had a different US value based on where the check was written).

In fact, I can just ask my husband what was the account used when he was clerk up in Canada.  I know he deposited the donation money in a Canadian bank.

***

Quote

All of the money in the Church (liquid, fungible money) is thrown into one big bucket, and any check written in the Church is drawn from this one account.

 

Edited by Calm
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34 minutes ago, bluebell said:

I don't think I have ever considered it to be both, but if I have in the past I don't any longer.

If I invested $100 dollars my grandmother gave me for my birthday, the money that came from that investment wouldn't be the gift from my grandmother.  

I think you, like most people didn't think about it much and when they did think about it they probably don't really care.  Most people think all the money goes in one pot and all the money comes out of one pot.

While these things are important to accountants, government officials and lawyers, they are not on most peoples radar.

 

I can definitely understand why someone would think that Investment income from tithing is the same as tithing, but to someone who was intimately involved in non profit financing (Like Pres Hinkley must have been, having been involved in church government for so long)  "tithing funds" would have a very distinct meaning that may have been lost on people without an accounting background. 

 

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3 minutes ago, Calm said:

I am not debating your claims, but Rongo’s the Church has one checking account.  I don’t see it as likely that bishops in Canada, Japan, Russia, etc write checks off the same account US bishops do…if only because of the problem I have experienced with nonUS banks accepting US banks’ checks.  There are fees for converting the money, in the past delays while they got confirmed….though all such troubles were minuscule in comparison to the hassles US Banks gave us (they freaked out and wouldn’t accept a US dollar check because it was from a Canadian bank as if US dollars would have had a different US value based on where the check was written.

In fact, I can just ask my husband what was the account used when he was clerk up in Canada.  I know he deposited the donation money in a Canadian bank.

I agree, Rongo's statement was probably oversimplified.  

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