During the first weekend in April 2023, the Church of Jesus Christ of Latter-day Saints is celebrating its semiannual General Conference in Salt Lake City. Tens of thousands of members will attend in person, while millions watch from home.
Over the course of two days, Latter-day Saints—often referred to as “Mormons”—will hear a variety of talks from religious leaders. But another speaker will probably be a member of the Church’s audit department, who, if he follows tradition, will state that the institution’s financial activities for the past year “were managed in accordance with Church-approved budgets, accounting practices and policies.” Usually no further details are provided.
This annual ritual may seem striking in light of the Church’s assent in February 2023 pay a $5 million fine in a settlement with the US Securities and Exchange Commission. According to the press release, the SEC concluded that the Church has made every effort to ‘black out’ his investment portfolio. a statement from the church expressed “regret” that its leaders had followed flawed legal advice and insisted that the fine be paid through “investment returns” rather than member donations.
The settlement came on the heels of other controversies about the Church’s taxes and financial portfolio, which journalists and whistleblowers have estimated at approximately $100 billion.
These revelations have raised questions about the ethics of a religious organization amassing such a large amount of wealth, and how this balances with charity. But headlines often overlook the long and surprising history of the modern church’s financial success, as well as the lingering concern about its economic reserves.
Share and share equally
Mormonism was born from it the spiritual quest of Joseph Smithwho grew up in the middle of America Second Great Awakening during the early 1800s, a period of Christian revivals. His parents were religious seekers struggling to find a satisfying church and grappling with the financial turbulence of the young country. Smith’s father had lost savings in it a fateful ginseng dealwhich plunged the family into two decades of poverty.
It is no surprise, then, that when Smith founded his own church, its teachings contained a sharp critique of the capitalist system. Early converts to what was originally called the Church of Christ, organized in 1830, were encouraged to do so dedicate all their goods to their new religious community so that it can redistribute resources to those in need.
It was one of many common experiments Americans tried it during the antebellum period when religious innovators offered alternatives to what they believed to be a dangerous and indifferent economic system. Smith’s earliest revelations denounced individualism and urged believers to do so share their property and resources with each other.
But financial problems, personal clashes and other challenges doomed the experiment from the start. Within a few years, the leaders of the new church had already abandoned the ideal of consecration. Instead, Smith led members to donate “excess property”.to help pay off the group’s direct debts and then donate “annually one-tenth of all their interest.” This commandment began a practice of tithing that still exists, although it has been interpreted in different ways over the years.
During the first two decades of the Church’s existence, the Latter Day Saints had to move their headquarters several times, including seven years in Nauvoo, Illinoisa focus of my historical research. By the time the Saints reached Utah’s Great Salt Lake in 1847, leaders and members alike were largely embracing the economic system that Smith had previously denounced.
A series of national economic crises during the late 19th century, the finances and financial ideals of the church were further tested. In addition, the government’s decision to prosecute polygamists amid growing criticism of the Church’s “plural marriages” crippled the region’s economy to the leaders of the Latter-day Saints abandoned the practice in 1890.
The prophet and President of the Church in 1899, Lorenzo Snow, facing financial ruin, urged members doubling their commitment to tithing. The church formalized its expectation that members donate 10% of their annual income to maintain a good reputation. To this day, Latter-day Saints are expected to meet each year and with local bishops declare that they have paid a full tithe.
In 1907, Snow’s successor, Joseph F. Smith, jubilantly announced that tithe income had paid off all of the Church’s loans. He even predicted that if the current rate continued, “we expect the day when we don’t have to ask you for one dollar in donation for any cause.”
From bust to tree
However, donations only increased in the following decades as the church continued to grow rapidly. The prosperity of the 1950s made it possible an ambitious construction agenda for the next decade, as the Church built over a thousand new meetinghouses and temples for its exploding membership.
But high spending, poor financial management, and ill-advised or unlucky investments created another financial crisis, and the Church soon found itself penniless. By 1962, the budget had run up a deficit of $32 million. Leaders stopped offering detailed financial reportswhich had been an inconsistent yet common staple during the Church’s General Conference.
Things began to improve the following year when N. Eldon Tanner, a successful Canadian politician and businessman, joined the leadership of the church And modernized the financial structureinvest any surplus. The church was back on solid financial footing by the late 1960s, though it did not resume publication of detailed financial reports. Instead, Tanner enabled a private economics team continue to expand the portfolio of faith.
Decades of membership growth, tithe donations, and lucrative investments resulted in the vast accumulation of wealth of the modern church. This financial success has made it possible to oversee a worldwide church nearly 17 million registered memberstens of thousands of employees and countless volunteer and charitable programs.
His investments became so profitable in the early 2000s that, according to the SEC report, Church leaders explored ways to shield their success from the public. According to one whistleblowerChurch authorities feared that more transparency would discourage members from paying more tithes.
Give to God
While the church reports to vomit $1 billion to charitable aid last year, both members and observers criticized leaders for not donating more, given the sheer size of their investment portfolio, which is nearly twice the size of Harvard’s endowment.
The issue also raises important ethical questions about a religious institution’s obligations to its own members. Should Latter-day Saints, especially those who are struggling financially, still have to donate a tenth of their income to a church whose reserves are probably deep enough to pay off more than a decade of expenses? The apparent discrepancy between the required transparency of individual members and the lack of accountability on the part of the church itself has upset some members.
Yet many believers emphasize that the purpose of their tithing is not just to contribute to the church’s treasury, but to help build the kingdom of God—their donations are offered primarily for spiritual reasons, not for worldly reasons. And investments are also a safety net for faith growth: leaders probably hope so support of rapidly growing membership in low-income countries.
As absurd as it may be to call a $100 billion dollar portfolio a “rainy day” fundperhaps the turbulent history of the Church led leaders to see it that way.