How the Mormons Make Money | BusinessWeek.com

[_Stormy Waters]

The church issues a statement on their finances.

[_Drifting]

The church issues a statement on their finances.

They've taken the newsroom site down.

[Guest]

The church issues a statement on their finances.

They've taken the newsroom site down.

Here's the statement:

THE CHURCH AND ITS FINANCIAL INDEPENDENCE
SALT LAKE CITY — The growth of The Church of Jesus Christ of Latter-day Saints from a fledgling band of frontier Americans to a global faith that blesses the lives of millions is one of the great religious success stories of the 19th and 20th centuries.

From the very beginning, members of the Church displayed a remarkable ability to set aside material things for spiritual goals. One of the earliest Church members, Martin Harris, mortgaged his farm to pay for the publication of the Book of Mormon. Other examples of self-sacrifice among the early Latter-day Saints abound.

Driven from place to place – from Missouri to Illinois to the far reaches of the western frontier – Church members several times abandoned their homes, farms and cottage businesses they had lovingly nurtured. By the time they made the final great trek across the American Plains to the Rocky Mountains, many were already impoverished. Those who came by handcarts because they could not afford wagons are a poignant testimony to that fact.

Brigham Young once remarked that if the Latter-day Saints could have ten years unmolested in the Rocky Mountain Valleys, they would establish themselves as an independent people. Over time Brigham Young’s vision of a thrifty, independent and spiritual people largely came to be realized.

Complete financial independence and freedom from debt would take several decades, however. Historians today point to the early 1900s as the time when the Church finally began to turn the corner and free itself from decades of indebtedness – specifically highlighting a sermon by Church President Lorenzo Snow in which he called on the Latter-day Saints to renew their commitment to the principle of tithing.

Tithing is an ancient biblical principle, and has been practiced by many churches through the centuries. Independent studies show, however, that nowhere else in America today is the principle of tithing so widely and faithfully followed as among members of The Church of Jesus Christ of Latter-day Saints. The vast majority of the income used to manage the Church comes from tithing, not from businesses or investments.

Tithing has thus proved to be an enormous blessing to the Church and its people, along with simple but sound economic principles such as avoiding debt, living within one’s means, and setting aside funds for a rainy day.

The key to understanding Church finances is to understand that they are a means to an end. They allow the Church to carry out its religious mission across the world.

Does the Church own for-profit businesses? Yes. In the Church’s earlier history as it was establishing itself in the remote intermountain west, some of those businesses were necessitated by the simple fact that they didn’t exist elsewhere in the community. Gradually, as private businesses developed and the need for Church-owned businesses diminished, they were sold off, donated to the community or discontinued. Zions Bank and the LDS Hospital system are examples.

Today, the Church’s business assets support the Church’s mission and principles by serving as a rainy day fund. Agricultural holdings now operated as for-profit enterprises can be converted into welfare farms in the event of a global food crisis. Companies such as KSL Television and the Deseret News provide strategically valuable communication tools.

Tithing funds are used to support five key areas of activity:

- Providing buildings or places of worship for members around the world. We have thousands of such buildings and continue to open more, sometimes several in a week.
- Providing education programs including support for our universities and our seminaries and institute programs.
- Supporting the Church’s worldwide missionary program.
- Building and operating nearly 140 temples around the world and the administration of the world’s largest family history program.
- Supporting the Church’s welfare programs and humanitarian aid, which serve people around the world — both members of the Church as well as those who are not members.

From time to time, some people including journalists try to attach a monetary value to the Church in the same way they would assess the assets of a commercial corporation. Such comparisons simply do not hold up. For instance, a corporation’s branch offices or retail outlets have to be financially justified as a source of profit. But every time The Church of Jesus Christ of Latter-day Saints builds a place of worship, the building becomes a consumer of assets and a financial obligation that has to be met through worldwide member donations. The ongoing maintenance and upkeep, utilities and use of the building can only be achieved as long as faithful members continue to support the Church.

On occasion someone will try to estimate the Church’s income and determine how much of that is used to care for the poor and needy. Again, they rarely capture the whole picture. The bedrock principles underlying the Church’s welfare and humanitarian efforts are Christ like service and self-reliance.

Nearly 30,000 bishops who oversee their respective congregations have direct access to Church funds to care for those in need, as they help members achieve self-sufficiency.

At Welfare Square in Salt Lake City, where the Church cans goods for its distribution warehouses, some procedures would be more efficient if automated. Instead, the Church has opted for more labor-intensive production lines that provide opportunities for people to give service and for welfare recipients to work for what they get. This is not the pattern of a commercial business, but it is the pattern for helping people to help themselves. The Church aim is to help individuals to overcome temporal barriers as they pursue spiritual values.

Published numbers related to our humanitarian efforts include only dollars spent directly on humanitarian service. The Church absorbs the administrative costs. Furthermore, these numbers do not reflect the Church’s extensive welfare and employment services that serve many thousands worldwide. They also do not represent Deseret Industries thrift stores that provide vouchers to other charities for their use, donations to food pantries, or humanitarian-or welfare-focused missionary service or support given to aid other relief organizations in their missions. Hundreds of thousands of hours of donated service underpin Church programs such as these.

The Church exists to improve the lives of people across the world by bringing them closer to Jesus Christ. The assets of the Church are used in ways to support that mission. Buildings are built for members to come together to worship God and to be taught the gospel of Jesus Christ. Missionaries are sent to invite people to come to Christ. Resources are used to provide food and clothing for the needy and to provide ways for people to lift themselves up and be self-reliant. What is important is not the cost but the outcome. As former Church President Gordon B. Hinckley said, “The only true wealth of the Church is in the faith of its people.”

Those who attempt to define the Church as an institution devoted to amassing monetary wealth miss the entire point: the Church’s purpose is to bring people to Christ and to follow His example by lifting the burdens of those who are struggling. The key to understanding the Church is not to see it as a worldwide corporation, but as millions of faithful members in thousands of congregations across the world following Christ and caring for each other and their neighbors.

Translation: your numbers are all wrong, but we're still not going to give you the right numbers. Neener neener.

[Guest]

Can anyone see in that statement anything that coverhet he purpose of the $5 billion dollar expenditure on City Creek?

I notice the statement from the Church doesn't point out where the article "how the Mormons make money" got anything wrong...

[_Drifting]

The Church exists to improve the lives of people across the world by bringing them closer to Jesus Christ.

Building a $5 billion dollar shopping mall complex rather than feeding those starving children in Africa is certainly speeding up their meeting with Jesus...

[_Drifting]

Those who attempt to define the Church as an institution devoted to amassing monetary wealth miss the entire point: the Church’s purpose is to bring people to Christ and to follow His example by lifting the burdens of those who are struggling. The key to understanding the Church is not to see it as a worldwide corporation, but as millions of faithful members in thousands of congregations across the world following Christ and caring for each other and their neighbors.

In other words 'pay no attention to the man behind the curtain'

[_moksha]

I am at a loss for words! I cannot believe Monson said that. Maybe it was the dementia speaking...

Not all words need to be holy. Besides, this is very understandable. What business owner would not be desirous for customers? Mall owners would suggest shopping, car dealers would suggest browsing, funeral directors would suggest dying -- wait, scratch that last one.

[Guest]

/PR spin

Translation: most of what your donations go to and money is spent on is overhead and administrative costs, including our vast payroll which we did not mention. Actual charity work that helps human beings is a small percentage of where the Church's money goes. Of the charity work that "the Church" does do, most of it is members volunteering their time, not things that the organization does. The Church exists primarily to try getting other people to join it. But we'll make sure to have our cake and eat it too by releasing figures about how much we claim to spend on humanitarian aid, and releasing figures about how much we have spent on a high-end retail mall, and then complaining when people compare and contrast our own stated figures.

[_brade]

Published numbers related to our humanitarian efforts include only dollars spent directly on humanitarian service.

Wait? What? For years the church published numbers related to humanitarian efforts specifically included dollars spent directly on humanitarian service (called "Cash donations") and a value given in dollars on what the church called "Material assistance".

By the late 2000s the fact sheets no longer reported those two categories and instead combined them into one value. But, that one value did not suddenly come to represent nothing more than dollars spent. This is trivial to check because the first year the numbers were combined into one category essentially adds up to the combination of the previous years' two categories. The new value is clearly a combination of two values - actual dollars spent and an estimation of the value of other assistance given.

The point here is that the published numbers related to the church's humanitarian efforts very clearly do not include only dollars spent directly on humanitarian service.

The statements misleads people to believe that the current numbers published (by the church, remember) represent nothing more than cash and that there's this whole other unaccounted for value floating around that would make the numbers look better than they look. But the numbers currently published already account for that.

President Newsroom goofed.

[_moksha]

With that official rebuttal statement, it is now doubly important to not release any financial statements, lest nosy eastern reporters use those figures to prove us wrong.