Finances of The Church of Jesus Christ of Latter-day Saints

Finances of The Church of Jesus Christ of Latter-day Saints are similar to other non-profit and religious organizations, where the principal source of funding comes from the donations of its members and the principal expense is in constructing and maintaining facilities.

When the church takes in more donations than it pays out in period expenses, it uses the surplus to build a reserve for capital expenditures and for future years when period expenses may exceed donations. The church invests its reserve 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- and communication-related companies (see below).

The church has not publicly disclosed its financial statements in the United States since 1959. [Stack, Peggy Fletcher. [http://web.archive.org/web/20070715191640/http://www.sltrib.com/themix/ci_6364841 "Order to release financial data has LDS Church, courts on collision course"] . "Salt Lake Tribune". July 13, 2007. Accessed 13 July 2007.] The church does disclose its financials in the United Kingdom, where it is required to by law. [ [http://www.charity-commission.gov.uk/registeredcharities/AccountListing.asp?charitynumber=242451 The Church of Jesus Christ of Latter-day Saints, Great Britain Financial Statements] - provided by the Charity Commission based on the Charities Act] These financials are audited by the UK office of PricewaterhouseCoopers.

The church maintains an internal audit department that provides its certification at each annual general conference that church contributions are collected and spent in accordance with church policy. In addition, the church engages a public accounting firm (currently Deloitte & Touche) to perform annual audits in the United States of its not-for-profit, ["Why Deseret Trust Company?" http://www.lds.org/deserettrust/why.html. Accessed 15 May 2007.] for-profit, [Belo Corp Form 8-K. http://sec.edgar-online.com/1995/04/10/00/0000950134-95-000692/Section3.asp. Accessed 16 May 2007.] and educational ["Financial Planning". finserve.byu.edu. http://finserve.byu.edu/files/archives/Handouts/November%202005/Finance%20Section%20Draft%207-Without%20Requirements.doc. Accessed 16 May 2007.] ["Finance". accredit.byu.edu. See page 9 of pdf document available at http://accredit.byu.edu/resources/selfstudy/Standard_7.pdf?lms=30. Accessed 16 May 2007.] entities.

History

After the U.S. government confiscated church property under the Edmunds-Tucker Act, the church fell into severe debt. The government had seized most church assets, including tithing money donated by members. As a result, by the time Lorenzo Snow became church president in 1898, the church was $2.3 million in debt. ["Lorenzo Snow". http://www.historyofmormonism.com/lorenzo_snow.html. Accessed 29 May 2007.]

Snow reiterated the principal of tithing (giving 10% of one's income to the church) and by 1907 the church was completely out of debt and since then has not used debt to fund its operations, even for capital projects.

Current source of funding

Most church revenue comes from tithes and fast offerings (donations made to be used for the poor) contributed by church members. [cite web |url=http://www.lds.org/ldsorg/v/index.jsp?vgnextoid=bbd508f54922d010VgnVCM1000004d82620aRCRD&locale=0&sourceId=44812f2324d98010VgnVCM1000004d82620a____ |title=Church Finances—Commercial Businesses |accessdate=2008-02-22 |format= |work= ] These donations are transferred from local units directly to church headquarters in Salt Lake City, where the funds are centrally managed. [cite encyclopedia |last= |first= |author=Edgley, Richard |authorlink= |coauthors=Edling, Wilford G. |editor=Daniel H. Ludlow |encyclopedia=Encyclopedia of Mormonism |title=Finances of the Church |url= |accessdate= |accessyear= |accessmonth= |edition= |date= |year= |month= |publisher=Macmillan |volume=2 |location=New York |id= |doi= |pages=507-9 |quote= ] It is estimated that about ten percent of its funding also comes from income on its investments, [http://mormoninquiry.typepad.com/mormon_inquiry/2004/10/lds_revenues_an.html Mormon Inquiry article] ] mostly direct investments.

Use of funds

The church uses most of its financial resources to construct and maintain buildings and other facilities. The church also spends its funds on providing social welfare and relief and supporting missionary, educational, and other church-sponsored programs. [cite web|url=http://lds.org/newsroom/page/0,15606,4032-1---14-168,00.html|publisher=newsroom.lds.org|title=Church Finances] The church does not pay its local leadership, only the upper echelons of leadership (general authorities) [

] and mission presidents [

] , who serve in these capacities full-time, receive payments from the church. Some of these leaders receive payments in the form of salaries, others in the form of housing and living allowances. [cite book |last=Ostling |first=Richard N. and Joan K. |title=Mormon America: The Power and the Promise |edition= |year=1999 |publisher= Harper |location=San Francisco |page=] page number
*Construction of facilities.The church builds additional chapels (structures used for weekly worship and for baptisms) and temples (structures used for other rites and ordinances) as wards and branches of the church are organized. On average, the church builds a little more than one chapel a day. The church built about 40 smaller temples between 1998 and 2001. LDS Temple status (See List of temples of The Church of Jesus Christ of Latter-day Saints.)

*Maintenance of facilitiesThe church pays to maintain its chapels and temples around the world. These costs include repairs, utilities, grounds maintenance, and specialized custodial work. Members also assist with cleaning local chapels by providing general custodial work. These facilities are cost-centers for the church, and maintaining them represents a significant use of the church's income. [Hinckley, Gordon B. "The Widow's Mite". BYU Speeches. 17 September 1985. See [http://speeches.byu.edu/reader/reader.php?id=6965] .] These facilities are maintained to support the mission of the church.

*Social welfare and relief.The church operates a welfare distribution system, as it encourages members to seek financial assistance from family and church first before seeking public or state-sponsored welfare. [ [http://library.lds.org/nxt/gateway.dll/Magazines/Ensign/1978.htm/ensign%20november%201978%20.htm/the%20stake%20presidents%20role%20in%20welfare%20services.htm The Stake President’s Role in Welfare Services - General Conference Oct 1978] ] AgReserves Inc., Deseret Cattle and Citrus Ranch, and Farmland Reserve, Inc. are part of its welfare distribution system. Welfare resources are distributed by local bishops but maintained by the Presiding Bishop. See "Preparedness". It also sends relief aid to victims of natural disasters such as earthquakes, tsunamis, hurricanes and others around the world. The relief effort has been recognized through many organizations and political leaders, including the United States leaders in reaction to the Hurricane Katrina relief effort by the church.

*Other programs.The church also spends much of its money collected through tithing on missionary, educational, and other programs which the church considers to be within its mission. Although the families of Mormon missionaries (usually young men ages 19 - 21 or young women ages 21 - 23) generally pay $400 a month for missions, [ [http://www.newsobserver.com/425/image_media/360949.html Acts of Faith: 2005] The News & Observer] additional general funds of the church support missionaries unable to pay for their own missions, mainly in less-developed countries. These missionaries are expected to repay the assistance they received when they are able to do so. Additionally, the church provides a mission office and mission home for each of its 340 missions and pays for television advertising offering free copies of the "Book of Mormon", the Bible, church videos, etc. The church also owns and subsidizes education at its three universities (see Church Education). Throughout the world, it also supports Scouting programs for young men. [cite web | url= http://www.lds.org/pa/display/0,17884,5169-1,00.html| title=History of Scouting in the Church|accessdate=2007-11-07] In addition, it supports its Seminary and Institute programs with tithing money.

*Volunteer LaborThe church tempers its cash expenses through the use of volunteer labor. As of 1995, the church's human resources department estimated that the 96,484 volunteers (not including 50,000 full-time missionaries) serving at the time contributed services with an annual value of $360 million.

Assets

"TIME" magazine estimated in 1996 that the church's assets exceeded $30 billion.cite news
author = Biema, David Van.
url = http://www.time.com/time/magazine/article/0,9171,986794,00.html
title = Kingdom Come.
publisher = Time Magazine
volume = 150
number = 5,
date = August 4, 1997
accessdate = 2006-09-02
quote = With unusual cooperation from the Latter-day Saints hierarchy (which provided some financial figures and a rare look at church businesses), TIME has been able to quantify the church's extraordinary financial vibrancy. Its current assets total a minimum of $30 billion. ] This figure represents only one side of the balance sheet and does not include current liabilities for maintenance, although the church incurs virtually no long-term liabilities.Hinckley, Gordon B. "Of Missions, Temples, and Stewardship". Ensign. November 1995, p. 51.] After the Time article was published, the church responded that the financial figures in the article were "grossly exaggerated." [cite journal |last=Hinckley |first=Gordon B. |authorlink=Gordon B. Hinckley |coauthors= |year=1997 |month=November |title=Latter-day Saints in Very Deed |journal=Ensign|volume=27 |issue=11 |pages=85 |id= |url=http://www.lds.org/ldsorg/v/index.jsp?vgnextoid=2354fccf2b7db010VgnVCM1000004d82620aRCRD&locale=0&sourceId=351357b60090c010VgnVCM1000004d82620a____&hideNav=1 |accessdate=2008-02-22 |quote=A recent magazine article praised us as a well-run financial institution of great wealth. It grossly exaggerated the figures.] Three years later, annual revenues were estimated to be $5 billion, with total assets at $25 to $30 billion. [cite book
title=Mormon America
last=Ostling|first=Richard and Joan
pages=395-400] Whatever the actual figure, about two-thirds of it is made up of non-income-producing facilities and the land they sit on, including thousands of meetinghouses and over 120 temples the church operates world-wide, as well as educational institutions (mainly Brigham Young University). The remaining assets include direct investments in for-profit businesses managed through Deseret Management Corporation. Although the church is a tax-exempt organization, its for-profit entities generate "unrelated business income" that is subject to federal, state, and local income and other taxes.

The church's holdings include:
* AgReserves Inc. - the largest producer of nuts in America.
* Hawaii Reserves, Inc. - Miscellaneous church holdings in Hawaii. Along with the Polynesian Cultural Center (the leading for-profit visitor attraction in Hawaii [ [http://www.polynesia.com/history.html History] from Polynesian Cultural Center website] ) and Brigham Young University-Hawaii, Hawaii Reserves generated revenue of $260 million for the Hawaii economy in 2005. ["Pacific Business News" (Honolulu), 6 March 2007. http://www.bizjournals.com/pacific/stories/2007/03/05/daily29.html. Accessed 8 March 2007.]
* Farmland Reserve Inc. - 228,000 acres (923 km²) in Nebraska, [Duggan, Joe, [http://www.journalstar.com/articles/2004/10/03/nebraska/doc415f8dff391b2123060506.txt Mormon land holdings rise] . "Lincoln Journal Star" 2004-10-03.] and over 312,000 acres (1,260 km²) in Florida (dba Deseret Cattle and Citrus). [Deseret Cattle and Citrus Ranch east of Orlando, Florida is the world's largest beef ranch, and the land is worth an estimated $858 million. (Biema, 1997)]
* Bonneville International Corporation - the 14th largest radio chain in the U.S.
* "Deseret Morning News" - a daily Utah newspaper, second-largest in the state. [Deseret News Publishing Company is a [http://www.deseretmanagement.com/?nid=6 Subsidiary] of Deseret Management Corporation a for-profit corporation affiliated with the Church [http://www.deseretmanagement.com/?nid=9] .]
* Beneficial Financial Group - An insurance and financial services company with assets of $3.1 billion. [ [http://www.beneficialfinancialgroup.com/about_us/financial_information.html Financial Information] . [http://www.beneficialfinancialgroup.com beneficialfinancialgroup.com] . Beneficial Financial Group. Retrieved on 2006-01-25.]

Notes