If you haven’t already heard about the whistleblower who used to work for Ensign Peak Advisors, an investment arm of The Church of Jesus Christ of Latter-day Saints, he alleges they don’t meet IRS regulations which states they should be using a percentage of funds annually for religious, educational or charitable purposes.
The name of the whistleblower is David Nielsen, and he is seeking a percentage of any back taxes the IRS may assess as a result of the complaint. Nielsen left his employment with EAP after his wife and children left the church and asked him to follow suit.
Whistleblower to IRS: Mormon Church has amassed $100 billion in tax-exempt fund rather than supporting charitable works https://t.co/KQ7s4gUo8f
— The Washington Post (@washingtonpost) December 17, 2019
Nielsen teamed up with his brother, Lars, to file a complaint with the IRS. Lars is no longer an active member of the church either.
For more particulars about the allegations and what is on record with the authorities, please reference this incredible article by Tad Walch at DeseretNews.com.
The First Presidency released a statement to the press in response to media stories about church finances:
We take seriously the responsibility to care for the tithes and donations received from members. The vast majority of these funds are used immediately to meet the needs of the growing Church including more meetinghouses, temples, education, humanitarian work and missionary efforts throughout the world. Over many years, a portion is methodically safeguarded through wise financial management and the building of a prudent reserve for the future. This is a sound doctrinal and financial principle taught by the Savior in the Parable of the Talents and lived by the Church and its members. All Church funds exist for no other reason than to support the Church’s divinely appointed mission.
Claims being currently circulated are based on a narrow perspective and limited information. The Church complies with all applicable law governing our donations, investments, taxes, and reserves. We continue to welcome the opportunity to work with officials to address questions they may have.
In addition to the Church’s response, I wanted to focus on some of the responses to these allegations from social media that shed light on the story and bring different perspectives to the table.
From @BoydMatheson: "Congress would do well to note that the federal government is straining to provide basic services to its citizens and struggles mightily to meet the needs of those most in need."https://t.co/wvs0fEOhTv
— Deseret News (@DeseretNews) December 18, 2019
A portion of Boyd Matheson’s piece in the Deseret News above, reads:
You could argue that The Washington Post ran a misleading piece about The Church of Jesus Christ of Latter-day Saints, complete with a misleading headline that the “Mormon Church” misled members on a $100 billion tax-exempt investment fund.
The headline was based on a former employee of a church-integrated auxiliary, Ensign Peak Advisors. The claim seems to be centered on the idea that the private foundation had not distributed 5% of its assets annually as required by the IRS.
Peter J. Reilly, a tax expert, disputed that assertion in Forbes, saying, “Ensign is not a private foundation. It is an integrated auxiliary of a church. And there is nothing in the tax law that prevents churches from accumulating wealth.” In the same article, Paul Streckfus of the EO Tax Journal agreed, stating, “this matter does not merit IRS attention.”
Beyond attempting to navigate the nuances of highly intricate and incredibly complex tax law, The Washington Post article seemed to question the validity and value of a religious organization accumulating financial assets.
Aaron Miller from publicsquaremag.org states:
In an age inundated with headlines, the American public has perhaps become accustomed to sighing and shaking their heads with reports of corruption. So, when the headlines pointed at the Church of Jesus Christ this week (“Mormon Church accused of stockpiling billions, avoiding paying taxes” or ”Mormon Church has misled members on $100 billion tax-exempt investment fund, whistleblower alleges”), the takeaway for many readers was likely clear-cut. But, the story beyond the headline merits a closer look.
If you read the headlines this week about the $100b held secretly by the Mormon church (the Church of Jesus Christ of Latter-day Saints), I wrote something that gives a more complete picture of what's going on.https://t.co/MEh9DDmbZH
— Aaron Miller (@aaronmiller) December 20, 2019
Matt Whitlock does a very good job of giving you a bullet point list of why these allegations released in the Washington Post should be taken with a grain of salt.
One of the more egregious media hit pieces I’ve ever seen.
➡️ WaPo acknowledges they don’t have docs/evidence to support claims
➡️ ”Complaint” was shared w/ WaPo by complainants brother without his consent
➡️ No comments from anyone involvedhttps://t.co/B6A4UsQr0I
— Matt Whitlock (@mattdizwhitlock) December 17, 2019
Proof that the leaders of the Church are mindful of the members’ generosity and when they don’t need any more money to support a fund, they will tell us so. I was SHOCKED when I heard this announcement shared below – when the Perpetual Education and Temple Patron funds were removed from the donation slip.
Let that sink in folks. When they had sufficient for their needs, they told the membership of the Church to stop contributing. THAT, in my humble opinion, is such an incredible statement. So good.
This is the greatest example to me that the leaders of The Church of Jesus Christ are mindful of the widow’s mite & they manage the sacred tithes and offerings as God would.
Remember when they told members of the church to stop donating to these funds? https://t.co/Pjs7VuSpda
— Called to Share (@MormonLight) December 19, 2019
Hank Smith, a full-time religious educator for the Church, boiled down the allegations with a twist of humor as he usually does.
Breaking: The LDS Church saves more than it spends.
— Hank Smith (@hankrsmith) December 17, 2019
Derek Andersen speaks to the misleading nature of the article but also to the truth that it doesn’t make much sense to think that transferring funds from the Church, who can manage it’s money well, to the government that can’t, will somehow solve any problems or make things better.
This article is what's so misleading. Also if true the church has a $100B surplus on 10% of small group's income. Govt takes 40% of income and is $22T in debt. Maybe the LDS church should be put in charge of managing the country's money. https://t.co/wUjdPru17d
— Derek Andersen (@DerekjAndersen) December 17, 2019
“The only thing necessary today is that the Latter-day Saints everywhere recognize these men, who sit here on the stand, as the fountainheads of truth, through whom God will reveal His will, that His Saints might be preserved through an evil day.” – Harold B. Lee
I don’t know how many comments I’ve seen from people saying they don’t understand, or it doesn’t make sense, or why doesn’t the Church do this or that – if God tells the prophets, “Save so you are prepared for the days ahead” – then that is what needs to be done.
Trust the prophets. They are seers – which means they see things that we can’t, which often don’t make sense to us.
— Garrett McClintock (@GJMcClintock) December 17, 2019
This user is heavy with the sarcasm to prove his point, which is, that there is so much that the Church does to bless the world with the funds that they have.
If the LDS Church has 100 billion saved why arent they
1. Subsidizing college or trade degrees for members in the developing world
2. Subsiding temples and church buildings in developing nations that cant afford them
3. Subsidizing poor missionaries from all over the world?
— Vakaviti (@vakaviti) December 18, 2019
One interesting theme that continues to rise to the top is many people declaring that because the Church has so much money they should be paying for Medicare, resolving student debt, and solving the homeless crisis. Hank Smith addressed this in part with his tweet below.
People who think the church’s alleged 100 billion could solve the world’s problems seem to be forgetting the US Gov brings in 4 trillion in taxes every year.
— Hank Smith (@hankrsmith) December 18, 2019
I believe we will soon see the true wisdom in the reserves that the Church has and will look back with gratitude.
Click on the image below to find the full comment by Kwaku, who is a Latter-day Saint that sustains and defends his faith every day.
— kwaku (@thekwakuel) December 17, 2019
Personally, I have never worried about what the leaders of our Church are doing with my tithing money. Why? Because I trust them. I believe they are incredible men of God.
Additionally, the donations are guarded with sacred stewardship and reverence. Elder Bednar shared the following experience sitting in on his first meeting of “The Council of the Disposition of the Tithes.”
Before my call to serve as a member of the Quorum of the Twelve, I read many times in the Doctrine and Covenants about the council appointed to oversee and disburse sacred tithing funds.
The Council on the Disposition of the Tithes was established by revelation and consists of the First Presidency, the Quorum of the Twelve Apostles, and the Presiding Bishopric (see D&C 120).
As I prepared in December of 2004 to attend my first meeting of this council, I eagerly anticipated a most remarkable learning opportunity.
I still remember the things I experienced and felt in that council. I gained a greater appreciation and reverence for the Lord’s laws of finance for individuals, for families, and for His Church.
The basic financial program of The Church of Jesus Christ of Latter-day Saints—for both income and disbursement—is defined in sections 119 and 120 of the Doctrine and Covenants. Two statements found in these revelations provide the foundation for the fiscal affairs of the Church.
Section 119 simply states that all members “shall pay one-tenth of all their interest annually; and this shall be a standing law unto them forever, … saith the Lord” (verse 4).
Then, concerning the authorized disbursement of the tithes, the Lord said, “It shall be disposed of by a council, composed of the First Presidency of my Church, and of the bishop and his council, and by my high council; and by mine own voice unto them, saith the Lord” (D&C 120:1). The “bishop and his council” and “my high council” referred to in this revelation are known today as the Presiding Bishopric and the Quorum of the Twelve Apostles, respectively.
These sacred funds are used in a rapidly growing church to spiritually bless individuals and families by constructing and maintaining temples and houses of worship, supporting missionary work, translating and publishing scriptures, fostering family history research, funding schools and religious education, and accomplishing many other Church purposes as directed by the Lord’s ordained servants.
I marvel at the clarity and brevity of these two revelations in comparison to the complicated financial guidelines and administrative procedures used in so many organizations and governments around the world. How can the temporal affairs of an organization as large as the restored Church of Jesus Christ possibly operate throughout the entire world using such succinct instructions?
To me the answer is quite straightforward: this is the Lord’s work, He is able to do His own work (see 2 Nephi 27:20), and the Savior inspires and directs His servants as they apply His directions and labor in His cause.
In that first council meeting I was impressed by the simplicity of the principles that guided our deliberations and decisions. In the financial operations of the Church, two basic and fixed principles are observed.
First, the Church lives within its means and does not spend more than it receives.
Second, a portion of the annual income is set aside as a reserve for contingencies and unanticipated needs. For decades the Church has taught its membership the principle of setting aside additional food, fuel, and money to take care of emergencies that might arise. The Church as an institution simply follows the same principles that are taught repeatedly to the members.
As the meeting progressed, I found myself wishing that all members of the Church could observe the simplicity, the clarity, the orderliness, the charity, and the power of the Lord’s own way (see D&C 104:16) for conducting the temporal affairs of His Church.
I have now participated in the Council on the Disposition of the Tithes for many years. My gratitude and reverence for the Lord’s pattern has grown each year, and the lessons learned have become even more profound.
My heart swells with love and admiration for the faithful and obedient members of this Church from every nation, kindred, tongue, and people. As I travel the earth, I learn about your hopes and dreams, your varied living conditions and circumstances, and your struggles.
I have attended Church meetings with you and visited in some of your homes. Your faith strengthens my faith. Your devotion makes me more devoted. And your goodness and willing obedience to the law of tithing inspires me to be a better man, husband, father, and Church leader.
I remember and think of you each time I participate in the Council on the Disposition of the Tithes. Thank you for your goodness and faithfulness as you honor your covenants.
The leaders of the Lord’s restored Church feel a tremendous responsibility to care appropriately for the consecrated offerings of Church members. We are keenly aware of the sacred nature of the widow’s mite.
I am so grateful for the words of Elder Bednar. I trust him and the other leaders of our Church who sit on The Council of the Disposition of the Tithes. I am grateful for the wonderful principle of tithing. I am grateful for a Church that is able to live within its means, bless the nations, and save for the future.
The Church of Jesus Christ of Latter-day Saints also sent an email to the worldwide membership detailing how they use tithes and offerings. The contents of that email are found below.
The Church of Jesus Christ of Latter-day Saints uses the sacred tithes and generous donations of its members in worldwide efforts to love God and neighbor. In light of recent media stories that have misrepresented the Church’s approach, the Church provides the following summary.
The Church is committed to helping the poor and needy. Latter-day Saint Charities is a global program that primarily benefits those who are not Latter-day Saints. In times of need and during other emergencies, we partner with many global organizations like the Red Cross to provide assistance. President Russell M. Nelson spoke recently about some of these efforts. And this represents only a small portion of what the Church spends to care for those in need. The most recent annual report shows that the Church’s humanitarian arm has given more than $2.2 billion in aid in 197 countries since it was created in 1985. In addition, through the Church’s welfare program, leaders of the faith’s 30,000-plus congregations regularly help men, women and children with food, housing and other temporal needs, totaling billions more dollars in assistance.
The Church builds temples and connects families through family history. The Church is heavily focused on the doctrinal principle of connecting families across generations. This spiritual work is done in 217 announced or operating temples, an effort supported by the faith’s nonprofit family history organization, FamilySearch, which also freely offers its genealogical resources to anyone.
The Church provides worship and gathering space for its members. The Church must fund facilities, education and activity programs for its 30,500 congregations. Meetinghouses also serve as spaces for community education, family history research and emergency response.
The Church supports a global missionary program. Currently, more than 65,000 Latter-day Saint missionaries around the world are preaching the good news of Jesus Christ — an effort that requires significant financial support from the Church beyond the missionaries’ personal or family contributions. The faith’s approximately 400 missions include mission homes, apartments, offices and automobiles — all funded by the Church.
The Church invests in education. The Church believes that both secular and spiritual learning are eternal, and it invests significant financial resources in education. The Church’s Seminaries and Institutes program provides daily religious instruction to some 400,000 high school students and 300,000 university students each year. The Church provides higher education opportunities globally through its expansive PathwayConnect program, which paves the way to a university degree for those with limited opportunities or resources. And the Church operates several universities and a business college serving a combined 93,000 students.
“The fact that the Church of Jesus Christ has been able to fund the operation of meetinghouses, temples, educational institutions and missionary work — while also building up reservoirs of resources for the difficult days that eventually come — is a model that should be celebrated and emulated by governments and other institutions around the world,” one opinion editor writes.
The Church follows the same sound financial principles it teaches its membership. It avoids debt, lives within its budget and prepares for the future. Little wonder the pages of the Wall Street Journal recently praised Utah’s strong economy, in part because of the state’s “predominant [Latter-day Saint] culture that encourages out-of-fashion virtues such as thrift, delayed gratification and stable families.”
D. Michael Quinn, a scholar who published a 600-page history of Church finances in 2017, summed up his findings as “an enormously faith-promoting story.” He told a newspaper reporter that if Latter-day Saints could see “the larger picture,” they would “breathe a sigh of relief and see the church is not a profit-making business.”
“Yes, the church saves and invests its surplus pennies,” a Deseret News op-ed concludes, “but it also helps vastly reduce the debt of college students, gives to the poor regardless of background and supports one of the largest non-governmental welfare programs in the country. Most importantly, it does all this without enriching those at the top.”
The sacred funds donated by members of The Church of Jesus Christ of Latter-day Saints are an expression of faith, devotion and obedience to the biblical law of tithing and a desire to build Christ’s Church through living the two great commandments to love God and neighbor.
What responses to these allegations have resonated with you the most?