Billion-Dollar Boondoggle

Anybody who's seen anything about Mormonism online recently is probably aware of the Washington Post article about a recent whistleblower's IRS complaint, which challenges the church's tax exempt status by pointing to investment holdings of roughly one hundred billion dollars.

Many of you may have seen an op-ed in the Deseret News that tries to spin this revelation as a positive thing.  Perhaps the details of the allegations themselves are best discussed by those with greater investment knowledge than mine, so I'd like to focus on this baffling pro-church response.  It begins:

Monday’s Washington Post story about the finances of The Church of Jesus Christ of Latter-day Saints has already gotten a lot of attention. We think it deserves more.

Not because the topic of church holdings is somehow new — it’s not (Time magazine once ran a cover story titled, “MORMONS, INC.”) — but because the renewed focus on the church’s extensive holdings once again proves that, well, the church actually practices what it preaches regarding provident living and self-reliance.

Dismissing challenging information as "not new" is kind of my pet peeve of Mormon aplogetics.  Sure, it's not new in its basic subject matter, but it's wholly new in its scope and in its evidence of dishonesty.  Yes, Time Magazine estimated church assets at 30 billion in 1997 and MormonLeaks outlined investments of 32 billion in 2018, but if these more recent accusations are accurate, the numbers dwarf previous figures and indicate outright lies by the prophets and apostles as to how church funds and tithes are used.  Newness isn't the issue.

As far as the "provident living" assertion goes, there's a difference between provident living and Scrooge McDuck living.  Just for kicks, let's take the hundred billion dollar figure and divide it by the US median income from 2018 of $61,937.  Using that obviously rough number, that means that if the church liquidated its fortune right now, they could support 1.6 million American households at a moderate level of comfort for a full year.

How many Mormons who followed the prophetic directive to prepare long-term food storage have accumulated enough to feed 1.6 million families for twelve months?  If you're hoarding food (or money) to such an extreme degree despite the obvious presence of hunger (or poverty) in the world, you're not being prepared—you're just hoarding.  Which, incidentally, is not practicing something the church preaches.  You know, that whole "sell all that thou hast, and distribute to the poor" thing?  That thing that was famously said by the person the church is named after?  The name that the church repeatedly urges news organizations to use?

100 billion dollars is the kind of money that can actually solve one of the world's serious issues.  100 billion dollars can provide fresh water to every corner of Africa.  It can produce huge amounts of lifesaving vaccines and medicines.  It can accomplish crucial research toward carbon capture technologies, water desalination, or high-yield genetically modified crops.  When you truly care about the well-being of the human species, you don't keep this kind of wealth to yourself.  Besides, Jesus Christ would certainly understand if you had a few billion less saved for his second coming because of all the homeless shelters and refugee housing and hospitals and aqueducts you'd built.  When ye are in the service of your fellow beings, after all, ye are only in the service of your God.  

Saving money is good.  Saving this much money is immoral, especially for an institution that claims to be an authority on morality.

In an age of ballooning federal deficits, massive student debt and failed pension promises, we should perhaps be a bit slower to blow whistles when an organization — once on the brink of financial ruin — actually stays out of debt and saves for a rainy day.

So we started the article by saying we want more light shed on this because it's such a good thing, but now we're criticizing the whistleblower for making this data public?  The moral of the story is that we should perhaps be a bit slower to share positive information?  I think we're trying to have this both ways and that doesn't make a lot of sense.  

As a nation, and especially as individuals, we would all do well to try harder to model this behavior.

No, actually, we need more people who exhibit selfless generosity.  I would never reach the point of having 100 billion dollars saved up, even if I did somehow have an income that made accumulating that sum possible.  Sure, I'd probably buy myself a house and some expensive toys.  I'd probably bestow some similar opulent indulgences on my friends and family.  But even at my greediest, how much could I really spend?  I've led a relatively privileged life, but even I know that there are people and places with crucial needs that easily supersede the importance of my materialistic desires.  My 100 billion dollars could fund replacement of lead pipes in Michigan or provide health services to refugees from Yemen or Myanmar or Syria.

The behavior of the church here—squirreling away money and not using it to help—is selfish.  This is not admirable behavior to be emulated.  When your neighbor's house is on fire, you don't hide your hose to save it for a time when your own house might be on fire. 

Earlier this year, The Wall Street Journal ranked church-owned Brigham Young University the No. 1 school in the nation in terms of value for the price. Thanks to church assets — and specifically the financial investments highlighted by The Washington Post’s article — tuition for BYU students remains astonishingly low ($2,895 a semester for church members). Even more recently, the Journal has applauded Utah for having the best economy in the country (with a state government that runs a surplus and also saves for a rainy day). Meanwhile, researchers such as Raj Chetty have highlighted how Utah communities sustain some of the highest rates of upward mobility in the country.

The billions of unspent LDS dollars are not why Brigham Young University has low tuition.  The billions of unspent LDS dollars are not why Utah has a strong economy. The billions of unspent LDS dollars are not why Utah communities have high rates of upward mobility.  Of course, that's not actually the point the opiner is trying to make here.  Here's why he's citing that data: 

Much of this success is influenced by the prudent financial and charitable principles taught (and evidently exemplified) by The Church of Jesus Christ of Latter-day Saints. Hopefully, by underscoring the church’s holdings, the Post article and the story’s whistleblower will draw some attention to an institutional model that’s actually working.

Okay, this is silly.  The failing financial models these authors previously identified are government budgets, student loans, and corporate pensions.  These are not financial models that can necessarily become viable by emulating the church.  

The church's institutional model requires a minimum of ten percent of the income of everyone who wants its divine services (such as baptisms endowments, and sealings).  It also convinces its adherents that these divine services are not optional, making the required ten percent payment essentially a mandatory act of self-interest.  The model then relies on the church's position of authority to assure those providing the funds that their money is being used to further the availability of these services even as the church stockpiles what it's not using and repeatedly eschews transparency and accountability.

Let's apply that model to the US Government.  The government does require payments of varying rates from those who benefit from its services (such as infrastructure, police and military protection, and social security).  It also convinces its citizens that these services are not optional, requiring these payments by law and penalizing those who do not satisfy the requirements.  So far, this seems pretty analogous, but here's where it starts to break down—secrecy is not a generally well-received concept when it comes to public funds.  Were the government to follow the institutional model embodied by the LDS church, it would be keeping all of its finances private, sending out its own accountant once a year to assure us that everything is being done according to approved procedures, and then stockpiling the taxes that could be going toward building schools, landing on Mars, and buying body armor for Marines.  Imagine the public outcry if this were to happen.  This is not an institutional model that's going to work for that particular institution.  This is an institutional model that is more likely to show up in a dystopian film.

Similarly, the institutional model of secrecy and stockpiling and unaccountability is not viable for student loan programs and pension programs.  So basically, telling the world it should look to the Mormon church as a paragon of fiscal responsibility is like telling an aspiring soccer player to use Simone Biles's workout routine.  Even though these are both athletic endeavors, what makes a gymnast good at gymnastics is not the same thing that makes a soccer player good at soccer.  What may work for one does not necessarily translate to all.

The Post’s whistleblower puts the church’s financial holdings at $100 billion, but more substantiated financial leaks from last year put the numbers closer to $32 billion.

We're trying to have it both ways again.  It's a good thing that the church has so much money!  But also it's not as much money as you think!

It's also bizarre to characterize the MormonLeaks data as "more substantiated," considering that it wasn't presented as an exhaustive list of holdings, just a group of thirteen companies.  MormonLeaks did not come out with this saying, "here is exactly how much money the church has."  It was more of a "we've found some of the money the church has, and it sure looks like a buttload."  It could have been anywhere from the tip of the iceberg to everything but the tip of the iceberg, and one hundred billion dollars falls pretty easily within that range.  While it's arguable that the MormonLeaks data is more substantiated as accurate information than the Nielsen data is, we really don't know much about whether it's more substantiated as complete information.

It's also weird that the MormonLeaks numbers are "more substantiated" considering that one of the authors of this article was sharply critical of that organization's tactics back in 2017.  This was prior to the reveal of the 32 billion stock holdings, of course.  And it's certainly possible that the author can hold disdain for MormonLeaks' methods while accepting the validity of their information.  But it does sorta feel like maybe we're saying nice things about last year's leak now because it makes us look less bad than the latest leak.  I don't know the author.  This supposition could be completely off-base. 

But it does fit the Mormon pattern. We now accept the narrative of the seer stone because it makes us look less like deniers of history than insisting on the traditional Book of Mormon translation narrative.  We now accept that the Book of Abraham papyrus is a funerary text and we developed the catalyst theory because it makes us look less ignorant than flat-out disagreeing with scholarly Egyptology.  We now claim that the Book of Mormon people are merely among the ancestors of Native Americans because it makes us look less anti-science than insisting against DNA evidence that the Lamanites are the primary ancestors of Native Americans.  So do we also now accept the substance of the MormonLeaks valuation because it makes us feel less embarrassed than accepting the substance of the Ensign Peak Advisors valuation?

The church, by contrast, serves 16 million members with the scope of its work often spilling beyond its own membership. The church supports international humanitarian and welfare efforts, extensive education services, food banks, addiction recovery and employment programs, family therapy and counseling services, genealogical and self-reliance initiatives, and, of course, its broad ecclesiastical functions, which include more than 30,000 congregations worldwide.

Okay, until last year, I was one of those 16 million members and I hadn't received any services from the church since 2008—not that I was asking for any, of course.  But my point is that the church in no way serves 16 million members.  Any ward clerk should be able to see that this argument is inflated.  Estimates vary, and of course the church isn't going to share the information if they have it, but activity rates could be in the neighborhood of 25%—insert disclaimer that obviously this is speculation on my part here—which means that it's only 4 million members.  I mean, that's still a lot, and it could be much higher than that for all we know, but it's still pretty disingenuous, I think, to claim that one hundred billion dollars that the church isn't spending is relevant to their efforts to support an exaggerated number of members.

In education alone, the church runs a university system with total enrollments — both online and through four brick-and-mortar campuses — of nearly 90,000 students. And the church’s high-school-level church education program provides daily religious instruction and other services to more than 400,000 students each year.

Okay, but those 90,000 students pay tuition.  Crazy-low tuition, yes, but BYU does generate some income even if it operates at a loss based on tuition alone.  And again, the billions of unspent LDS dollars are not why Brigham Young University has low tuition.  The billions of unspent LDS dollars are not why seminary students have access to manuals and multimedia presentations.  These are reasons why the church has expenses.  These are things that are already being paid for without dipping into the multi-billion-dollar investments.  These things do not explain why it isn't problematic for the church to have so much tax-exempt money that is not being used for charitable, educational, or religious purposes.

I'm honestly not sure if these authors are missing the point on purpose.  I have no idea if this is sophistry or delusion.

Though this renewed focus on church finances will undoubtedly draw attention to the buzzier elements of its asset portfolio (hey, look, the church invests in a mall), it’s unlikely to change attitudes among those in its congregations who see how the money from investments and tithes funnels back to carrying out a global-sized mission. Their kids go to BYU or church seminary classes. They serve missions in foreign lands or receive financial assistance through unpaid clergy when they fall on hard times. They participate in disaster relief efforts, helping throngs of co-religionists in delivering food and other essentials.

Okay, first of all, the church has not invested in a singular mall.  It's more than one, although the one in downtown Salt Lake is easily the most extravagant.  But the reason the City Creek Center is "buzzier" than other things is because it's a hugely expensive for-profit endeavor by the one true church of God.  

Additionally, "invest" seems like a misleading verb that downplays the depth of the church's involvement in it.  I'd prefer verbs like bought, built, or operates.  If the LDS church merely invested in a 1.5-billion-dollar mall, then I suppose John Hammond merely invested in a theme park full of reconstituted dinosaurs. But let's focus on the cited ways by which these funds are funneled back toward the church's global mission:

• Mormon kids go to BYU, where they pay tuition, so I guess that means these unspent billions have somehow allowed access to significantly cheaper—but still not free—institutions of higher learning
• Mormon kids attend seminary classes, so I guess that means these unspent billions have somehow produced cringey "And My Soul Hungered" music videos and handy little laminated Book of Mormon timeline reference cards
• Mormon kids visit foreign lands on their missions, which they also pay for, so I guess that means these unspent billions have somehow allowed people to be taken away from their families to serve the multi-billion-dollar organization continuously for two years while doing very little to enjoy these foreign lands
• Mormons who have fallen on hard times receive financial assistance, so I guess that means that these unspent billions, with a local leader's careful approval, have somehow satisfied the electric bills and mortgage payments of families who have been taught to pay tithing to a multi-billion-dollar organization before they buy food for their children
• Mormon clergy is unpaid, so I guess that means these unspent billions have somehow not been used to compensate the local leadership whose dedication often makes them work long hours on top of the time they commit to their own professions and to their own familial obligations
• Mormons participate in disaster relief efforts, so I guess that means that these unspent billions are somehow responsible for the volunteer work of local wards and local members
• Mormons deliver food and other essentials, so I guess that means that these unspent billions have somehow paid for the supplies that come from the bishop's storehouses and are usually only available to church members at a bishop's discretion

Even the link this op-ed provides about helping during disaster relief is an article about a Mormon guy who was working at a flood shelter and personally housing two displaced families.  Sure, what that guy did was awesome.  But it has nothing to do with church funds if it's the individual guy taking it upon himself to provide Christlike service with his own resources.  Please explain to me how the Church of Jesus Christ of Latter-day Saints sitting on one hundred billion dollars made Brent Magnum's extraordinary acts of kindness possible.

[D. Michael Quinn] said that if people understood “the larger picture” on church finances they would “see the church is not a profit-making business.” Yes, the church saves and invests its surplus pennies, 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.

Okay, sure, that's a nice thing for Quinn to say, but there are some problems here.  First of all, yes, it is a profit-making business. It literally makes profit by owning malls and real estate developments.  And you don't wind up with one hundred billion dollars anywhere without making a profit.  If a hundred billion dollars doesn't count as profit, pretty much every business in history has been a complete failure. 

And perhaps the most outrageous thing in this entire article is the comment that the church saves and invests its surplus pennies.  Just in case I haven't thrown this number around enough times, let me remind you that this line is included in an op-ed about a one hundred billion dollar investment structure.  Even going by the authors' claim that the 32-billion-dollar leak from last year is "more substantiated," that's 3.2 trillion pennies.  That's like saying Saudi Arabia represents Rhode Island's surplus sand.

The college debt comment is, by my count, the fourth reference to BYU in this article (though still not as many times as I've mentioned one hundred billion dollars in mine).  Is the church really reducing the debt of college students?  Because that wording makes it sound like it's paying off people's loans.  What it's actually doing is offering really low tuition when people attend its own universities.  This may prevent higher student debt for some people, but it's not exactly an altruistic largesse that the church is magnanimously bestowing upon the world.  It's a discount on its own educational programs for people whose families have generally already donated huge sums of money to the church on a yearly basis.  I'm not complaining about the cheap BYU tuition—I'm just saying it isn't an indicator that the church is leading the charge to alleviate the student debt crisis the way this article's phrasing seems to imply.

"Gives to the poor regardless of background" is something I'd like a citation for.  I'm perfectly willing to believe that Mormons do this.  I'm skeptical that the organization of Mormonism does this.  If you're Mormon and you become destitute, your access to church welfare may become contingent upon your worthiness in the eyes of the bishop.  So it's not like the church is turning away people of specific racial groups who request assistance, but it does mean that aid isn't freely dispensed.  I'm conjecturing that if the author had provided some kind of link for the church giving to the poor, it would have been something similar to the $25,000 the church donated for LGBT suicide prevention last year—a donation made mostly for public relations purposes and a paltry sum considering its full resources.

The best evidence I can find for the church helping the poor is too easily explained away by the organization's obsession with appearances.  While the ten million they donated toward housing for the homeless in 2017 is an impressive sum, I consider it likely that the leadership wanted to increase the appeal of their tourist draws in Salt Lake City.  And the amount they donated was roughly one hundredth of one percent of the wealth the whistleblower's report claims they had at the time.  Meanwhile, in this past October's conference, President Nelson bragged about the church's generosity in giving the residents of a Congalese village without running water the "materials and training to pipe water to the city."  Ten million dollars to help less than 3000 people in your backyard but only "materials and training" to help 100,000 people on a different continent?  I think that's suspiciously incongruent.

Obviously, donating ten million dollars to help the homeless is a great thing to do.  The impact that housing made on any of those affected Utahns was likely life-changing in a very literal sense.  But with these immense resources and with an estimated seven-billion-dollar annual return on the investments outlined in the report sent to the IRS, the church could put a huge dent in, say, world hunger—which we once thought would take $30 billion a year.  My point is not to deride the church for helping the needy.  My point is that, as good old Uncle Ben advised the world, with great power comes great responsibility.  A hundred billion dollars and a worldwide network represents great power.  Staggering power.  By accumulating so much wealth and endeavoring to hide the magnitude of that wealth, the church is trying to give the impression that it is acting on that responsibility while secretly abdicating as much of it as possible.

That's immoral.

That's not Christlike.

That's not something we should be defending.

And if you still think that the church's sound fiscal practices spread philanthropy around the world without enriching those at the top, well...just remember that the church is a corporation sole.  Theoretically, Russell M. Nelson could be worth a hundred billion dollars right now.