Finances of The Church of Jesus Christ of Latter-day Saints
Encyclopedia
Non-profit organization
Nonprofit organization is neither a legal nor technical definition but generally refers to an organization that uses surplus revenues to achieve its goals, rather than distributing them as profit or dividends...
and religious
Religion
Religion is a collection of cultural systems, belief systems, and worldviews that establishes symbols that relate humanity to spirituality and, sometimes, to moral values. Many religions have narratives, symbols, traditions and sacred histories that are intended to give meaning to life or to...
organizations, where the principal source of funding comes from the donation
Donation
A donation is a gift given by physical or legal persons, typically for charitable purposes and/or to benefit a cause. A donation may take various forms, including cash, services, new or used goods including clothing, toys, food, and vehicles...
s of its members and the principal expense is in constructing and maintaining facilities.
When the LDS Church takes in more donations than it pays out in period expenses
Expense
In common usage, an expense or expenditure is an outflow of money to another person or group to pay for an item or service, or for a category of costs. For a tenant, rent is an expense. For students or parents, tuition is an expense. Buying food, clothing, furniture or an automobile is often...
, it uses the surplus
Economic surplus
In mainstream economics, economic surplus refers to two related quantities. Consumer surplus or consumers' surplus is the monetary gain obtained by consumers because they are able to purchase a product for a price that is less than the highest price that they would be willing to pay...
to build a reserve
Actuarial reserves
An actuarial reserve is a liability equal to the net present value of the future expected cash flows of a contingent event. In the insurance context an actuarial reserve is the present value of the future cash flows of an insurance policy and the total liability of the insurer is the sum of the...
for capital expenditures and for future years when period expenses may exceed donations. The LDS Church invests its reserve to maintain the principal and generate a reasonable return
Rate of return
In finance, rate of return , also known as return on investment , rate of profit or sometimes just return, is the ratio of money gained or lost on an investment relative to the amount of money invested. The amount of money gained or lost may be referred to as interest, profit/loss, gain/loss, or...
and directs its investments into income-producing assets that may help it in its mission
Mission (Christian)
Christian missionary activities often involve sending individuals and groups , to foreign countries and to places in their own homeland. This has frequently involved not only evangelization , but also humanitarian work, especially among the poor and disadvantaged...
, such as farmland
Arable land
In geography and agriculture, arable land is land that can be used for growing crops. It includes all land under temporary crops , temporary meadows for mowing or pasture, land under market and kitchen gardens and land temporarily fallow...
- and communication
Telecommunication
Telecommunication is the transmission of information over significant distances to communicate. In earlier times, telecommunications involved the use of visual signals, such as beacons, smoke signals, semaphore telegraphs, signal flags, and optical heliographs, or audio messages via coded...
-related companies (see below).
The LDS Church has not publicly disclosed its financial statements in the United States since 1959. The LDS church does disclose its financials in the United Kingdom and Canada
Canada
Canada is a North American country consisting of ten provinces and three territories. Located in the northern part of the continent, it extends from the Atlantic Ocean in the east to the Pacific Ocean in the west, and northward into the Arctic Ocean...
where it is required to do so by law. In the UK, these financials are audited by the UK office of PricewaterhouseCoopers
PricewaterhouseCoopers
PricewaterhouseCoopers is a global professional services firm headquartered in London, United Kingdom. It is the world's largest professional services firm measured by revenues and one of the "Big Four" accountancy firms....
.
The LDS Church maintains an internal audit department that provides its certification at each annual general conference that LDS Church contributions are collected and spent in accordance with LDS Church policy. In addition, the LDS Church engages a public accounting firm (currently Deloitte & Touche) to perform annual audits in the United States of its not-for-profit, for-profit, and some educational entities. In a June 2011 cover story, Newsweek magazine stated that the LDS church "resembles a sanctified multinational corporation—the General Electric of American religion, with global ambitions and an estimated net worth of $30 billion."
History
After the U.S. government confiscated the LDS Church's property under the Edmunds–Tucker Act in 1887, the church fell into severe debt. The government had seized most of the LDS Church assets, including tithingTithe
A tithe is a one-tenth part of something, paid as a contribution to a religious organization or compulsory tax to government. Today, tithes are normally voluntary and paid in cash, cheques, or stocks, whereas historically tithes were required and paid in kind, such as agricultural products...
money donated by members. As a result, by the time Lorenzo Snow
Lorenzo Snow
Lorenzo Snow was the fifth president of The Church of Jesus Christ of Latter-day Saints from 1898 to his death. Snow was the last president of the LDS Church in the nineteenth century.-Family:...
became the LDS church president in 1898, the church was $2.3 million in debt. Snow reemphasized the payment of tithing
Tithe
A tithe is a one-tenth part of something, paid as a contribution to a religious organization or compulsory tax to government. Today, tithes are normally voluntary and paid in cash, cheques, or stocks, whereas historically tithes were required and paid in kind, such as agricultural products...
(giving 10% of one's income to the church) and by 1907 the LDS Church was completely out of debt and since then has not used debt to fund its operations, even for capital projects. An early pioneer venture of the LDS Church was ZCMI which lasted from 1868 to divesting ZCMI Center Mall
ZCMI Center Mall
The ZCMI Center Mall was a shopping center near Temple Square in Salt Lake City, Utah that was owned by Zions Securities Corporation, which opened in 1975 and closed in 2007. At the time of its opening, it was the largest downtown mall in the country...
in 2007.
Current source of funding
Most of the LDS Church revenue comes from titheTithe
A tithe is a one-tenth part of something, paid as a contribution to a religious organization or compulsory tax to government. Today, tithes are normally voluntary and paid in cash, cheques, or stocks, whereas historically tithes were required and paid in kind, such as agricultural products...
s and fast offering
Fast offering
Fast offering is the term used in The Church of Jesus Christ of Latter-day Saints to denote money or usable commodities donated to that church, which are then available to provide financial help to those in need...
s (donations made to support new buildings and needs of its members) contributed by the LDS church members. Tithes donations are transferred from local units directly to the LDS Church headquarters in Salt Lake City, where the funds are centrally managed. It is estimated that about ten percent of its funding also comes from income on its investments, mostly direct investments.
Fast offerings are held locally and used in part to stock Bishop's Storehouses
Bishop's storehouse
A bishop's storehouse in The Church of Jesus Christ of Latter-day Saints usually refers to a commodity resource center that is used by bishops of the church to provide goods to needy individuals...
, local food banks used to feed the needy. Fast offering funds in excess of the local unit's needs are also sent to the LDS Church headquarters to be distributed to other localities whose offerings fall short of their needs.
Use of funds
The LDS Church uses most of its financial resources to construct and maintain buildings and other facilities. The LDS Church also spends its funds on providing social welfare and relief and supporting missionary, educational, and other LDS Church-sponsored programs. The LDS Church does not pay its local leadership. General authoritiesGeneral authority
In The Church of Jesus Christ of Latter-day Saints , a general authority is a member of certain leadership organizations who are given administrative and ecclesiastical authority over the church...
and mission president
Mission president
Mission president is a priesthood leadership position in The Church of Jesus Christ of Latter-day Saints . A mission president presides over a mission and the missionaries serving in the mission...
s, both of whom serve in these capacities full-time, can receive monies from the LDS Church in the form of housing, living allowances, and other benefits while they are on assignment. No funds are provided for services rendered.
- Construction of facilities.
The LDS Church builds additional chapels (structures used for weekly worship
Sacrament meeting
Sacrament meeting is the weekly worship service held on Sunday in The Church of Jesus Christ of Latter-day Saints .Sacrament meetings are held in individual wards or branches in the chapel of the meetinghouse. The bishop or branch president of the ward or branch presides, unless a higher authority...
and for baptisms
Baptism (Mormonism)
In Mormonism, baptism is recognized as the first of several ordinances of the gospel.-Overview:Much of the theology of Mormon baptism was established during the early Latter Day Saint movement founded by Joseph Smith, Jr...
) and temples
Temple (LDS Church)
In The Church of Jesus Christ of Latter-day Saints , a temple is a building dedicated to be a House of the Lord, and they are considered by Church members to be the most sacred structures on earth. Upon completion, temples are usually open to the public for a short period of time...
(structures used for eternal marriage
Celestial marriage
Celestial marriage is a doctrine of Mormonism, particularly The Church of Jesus Christ of Latter-day Saints and branches of Mormon fundamentalism.Within Mormonism, celestial marriage is an ordinance associated with a covenant that always...
and ordinances) as wards and branches of the church are organized. On average, the LDS Church builds a little more than one chapel a day. The LDS Church built about 40 smaller temples between 1998 and 2001. (See List of temples of The Church of Jesus Christ of Latter-day Saints.)
- Maintenance of facilities
The LDS 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 LDS Church, and maintaining them represents a significant use of the LDS Church's income. The materials used in church classes and the budgets to run activities and other things done by the various congregations of the church are also centrally funded. It also funds the printing and distribution of manuals for classes, and funds all congregational activities through centralized budgeting.
- Social welfare and relief.
The LDS Church operates a welfare distribution system, as it encourages members to seek financial assistance from family and the LDS church first before seeking public or state-sponsored welfare. AgReserves Inc., Deseret Cattle and Citrus Ranch
Deseret Ranch
Deseret Ranches refers to the ranching operations of The Church of Jesus Christ of Latter-day Saints in Central Florida. The Ranches include several organizations including Deseret Ranches of Florida, Deseret Cattle and Citrus, Taylor Creek Management, East Central Florida Services, Agreserves, and...
, and Farmland Reserve, Inc. are part of its welfare distribution system. Welfare resources are distributed by local bishops
Bishop (Mormonism)
Bishop is the highest priesthood office of the Aaronic priesthood in the Latter Day Saint movement. A bishop is usually the leader of a local congregation of church members. The Latter Day Saint concept of the office differs significantly from the role of bishops in other Christian denominations,...
but maintained by the Presiding Bishop
Presiding Bishop (LDS Church)
The Presiding Bishop of The Church of Jesus Christ of Latter-day Saints is a priesthood calling with church-wide authority. The Presiding Bishop is the highest leadership position within the church's Aaronic priesthood.-Presiding Bishopric:...
. 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
Hurricane Katrina
Hurricane Katrina of the 2005 Atlantic hurricane season was a powerful Atlantic hurricane. It is the costliest natural disaster, as well as one of the five deadliest hurricanes, in the history of the United States. Among recorded Atlantic hurricanes, it was the sixth strongest overall...
relief effort by the church.
- Other programs.
The LDS Church also spends much of its money collected through tithing on missionary
Missionary (LDS Church)
The Church of Jesus Christ of Latter-day Saints is one of the most active modern practitioners of missionary work, with over 52,000 full-time missionaries worldwide, as of the end of 2010...
, educational, and other programs which the LDS church considers to be within its mission. Although the families of Mormon missionaries
Missionary (LDS Church)
The Church of Jesus Christ of Latter-day Saints is one of the most active modern practitioners of missionary work, with over 52,000 full-time missionaries worldwide, as of the end of 2010...
(usually young men ages 19–25 or young women ages 21–25) generally pay US$400 a month for missions, additional general funds of the LDS Church support missionaries unable to pay for their own missions. Additionally, the LDS 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
Book of Mormon
The Book of Mormon is a sacred text of the Latter Day Saint movement that adherents believe contains writings of ancient prophets who lived on the American continent from approximately 2600 BC to AD 421. It was first published in March 1830 by Joseph Smith, Jr...
, the Bible, and church-produced videos and DVDs. The cost of printing or producing these materials is also covered entirely by the church since they are distributed for free. The LDS Church also owns and subsidizes education at its three universities and LDS Business College
LDS Business College
LDS Business College is a two-year college in Salt Lake City, Utah, focused on training students in business and industry. The college is owned by The Church of Jesus Christ of Latter-day Saints and operates under the Church Educational System and is associated with the Brigham Young University...
. Throughout the world, it also supports Scouting
Scouting
Scouting, also known as the Scout Movement, is a worldwide youth movement with the stated aim of supporting young people in their physical, mental and spiritual development, that they may play constructive roles in society....
programs for young men. In addition, it supports its Seminary and Institute
Institute of Religion
Institutes of Religion provide religious educational classes for young single adult and university students who belong to The Church of Jesus Christ of Latter-day Saints...
programs with tithing money.
- Volunteer Labor
The LDS Church tempers its cash expenses through the use of volunteer labor. As of 1995, the LDS 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
TimeTime (magazine)
Time is an American news magazine. A European edition is published from London. Time Europe covers the Middle East, Africa and, since 2003, Latin America. An Asian edition is based in Hong Kong...
magazine estimated in 1996 that the church's assets exceeded $30 billion. This figure represents only one side of the balance sheet and does not include current liabilities for maintenance, although the LDS Church incurs virtually no long-term liabilities. After the Time article was published, the LDS Church responded that the financial figures in the article were "grossly exaggerated." Three years later, annual revenues were estimated to be $5 billion, with total assets at $25 to $30 billion. 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 130 temples
Temple (LDS Church)
In The Church of Jesus Christ of Latter-day Saints , a temple is a building dedicated to be a House of the Lord, and they are considered by Church members to be the most sacred structures on earth. Upon completion, temples are usually open to the public for a short period of time...
the LDS Church operates worldwide, as well as educational institutions (mainly Brigham Young University
Brigham Young University
Brigham Young University is a private university located in Provo, Utah. It is owned and operated by The Church of Jesus Christ of Latter-day Saints , and is the United States' largest religious university and third-largest private university.Approximately 98% of the university's 34,000 students...
). The remaining assets include direct investments in for-profit businesses managed through Deseret Management Corporation
Deseret Management Corporation
The Deseret Management Corporation is a for-profit management company of assets for The Church of Jesus Christ of Latter-day Saints. It was established in 1966 by then church president David O...
. Although the LDS 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 (circa. 1997)
- Hawaii Reserves, Inc.Hawaii ReservesHawaii Reserves, Inc. is a subsidiary of the Deseret Management Corporation that manages property for The Church of Jesus Christ of Latter-day Saints in the town of Laie, Hawaii. These properties include the Laie Water Company and the Laie Treatment Works, as well as the Laie Shopping Center, Laie...
- Miscellaneous church holdings in Hawaii. Along with the Polynesian Cultural CenterPolynesian Cultural CenterThe Polynesian Cultural Center is a Polynesian-themed theme park or living museum located in Laie, on the northern shore of Oahu, Hawaii. Dedicated on October 12, 1963, the PCC occupies owned by nearby Brigham Young University–Hawaii....
(the leading paid visitor attraction in Hawaii) and Brigham Young University-Hawaii, Hawaii Reserves generated revenue of $260 million for the Hawaii economy in 2005. - Farmland Reserve Inc. - 228,000 acres (923 km²) in Nebraska,; 51,600 acres in Osage County, Oklahoma; and over 312,000 acres (1,260 km²) in Florida (dba Deseret Cattle and Citrus).
- Bonneville International Corporation - the 14th largest radio chain in the U.S.
- Deseret Morning NewsDeseret Morning NewsThe Deseret News is a newspaper published in Salt Lake City, Utah, and is Utah's oldest continuously published daily newspaper. It has the second largest daily circulation in the state behind The Salt Lake Tribune. The Deseret News is owned by Deseret News Publishing Company, a subsidiary of...
- a daily Utah newspaper, second-largest in the state of Utah. - Beneficial Financial GroupBeneficial Financial GroupBeneficial Financial Group is an insurance and financial services company based in Salt Lake City, Utah. It is a subsidiary of Deseret Management Corporation, which is in turn owned by The Church of Jesus Christ of Latter-day Saints...
- An insurance and financial services company with assets of $3.1 billion.