In CBS’s ‘60 Minutes’ segment on church finances, it missed the sweeping rags-to-riches history of faith
On Sunday night, the CBS news program “60 Minutes” aired a segment about the financial assets of The Church of Jesus Christ of Latter-day Saints. The story rehashed widely reported items about the church’s investments and spending and one man’s criticisms, a self-described “whistleblower” who once worked with church investments.
What the “60 Minutes” segment about the church’s finances and other reports often miss is the sweeping and at times poverty-ridden history that helps explain the church’s finances and decision-making today, including its modern-day record of self-sufficiency that sustains a global church.
Sixty years ago, a financial crisis engulfed the church and threatened to become the worst in the faith’s history, one historian wrote. That’s saying something for a church with a storied past of economic distress.
For example, an apostle once secured new loans in New York City hours before the church would have defaulted on a large payment with a San Francisco bank. He awoke despondent that morning, aware that a run on the two banks owned by the church threatened to wipe out the last of its deposits. If he had failed, the church’s credit rating would have been ruined and debtors would have sued to seize church assets, according to the late historian Ronald Walker.
In 1962, the church ran a $32 million deficit. With red ink soaking the church’s books again in early 1963 and its financial officers worried they wouldn’t be able to meet payroll for church employees, President David O. McKay moved decisively. He changed the assignment of one the counselors in his First Presidency who had overseen church finances, historians say.
A few months later, President McKay handed that role to a brand-new counselor who set the church on a rigorous course of fiscal responsibility. It began with years of belt tightening. The biggest symbol of that frugality was an immediate building moratorium. For five years, construction was halted on the largest building in Utah and Latter-day Saint history to that time, the 28-story Church Office Building.
The new strategy worked spectacularly. One historian said the principles for church finances established in the 1960s led directly to its accumulation of assets today.
“As far as I know, that program has been relentlessly and consistently followed for half a century. And if you do that for half a century — you take a portion of the tithing revenue every single year and you just set it aside and invest it — between savings and then the exponential growth that you get from compounding interest on investments, the church gets this enormous pool of reserves,” said Nathan Oman, a historian and professor of law at William & Mary Law School in Williamsburg, Virginia.
Today, the church has a stock portfolio worth tens of billions of dollars. “60 Minutes” said some have estimated the church’s assets total as much as $150 billion, though it didn’t provide a source for that figure. The church does not publicize how much money it has so it can keep the focus on its religious mission, Bishop W. Christopher Waddell, first counselor in the Presiding Bishopric, told “60 Minutes.”
The program suggested, again without a source, that the church takes in $7 billion in tithing each year and spends $6 billion on its various religious and charitable causes, investing what remains for a time of need. These funds are managed by an investment arm known as Ensign Peak Advisors, which is not considered a separate entity but rather functions as an “integrated auxiliary” of the church.
If the church did have $150 billion, a figure the church did not confirm during the “60 Minutes” interview, then the $6 billion it is said to spend annually on its mission would represent 4% in annual charitable spending, above what a retired IRS executive told “60 Minutes” would be necessary for a non-church 501c3 to maintain its nonprofit status. Unlike other charitable 501c3 entities, churches are not required by the IRS to make minimum disbursements.
The church provides more than $1 billion in charitable contributions to an extensive multi-campus worldwide educational system (including its flagship university, BYU) and another $1 billion a year in humanitarian offerings. Meanwhile, it funds 30,000 congregations, a global missionary effort, as well as thousands of meetinghouses, hundreds of temples and extensive free genealogical services — all part of the church’s religious mission to invite people to follow Jesus Christ.
Bishop Waddell said the church’s goal is “to make sure that we’re comfortable with how many years’ worth (of operational budget) we have in case of a financial crisis to make sure that we can continue church operations. We just want to make sure that that is sufficient.”
It is impossible to understand the church’s financial holdings and practices by looking at stock filings alone or at incomplete estimates compiled by unofficial sources, historians say. Latter-day Saint leaders’ actions are deeply rooted in both specific theology as well as a history of economic distress.
Large church reserves have been wiped out before.
Those factors, combined with a history of societal and governmental tensions, created an immense drive to build independent, self-sustaining communities and economies. This is the story of how the Church of Jesus Christ rose from a small band of believers with little to no money to become a global faith that has achieved a sweeping economic sufficiency that its earliest leaders sought from the start.
And the unprecedented reserve funds that are a first in the church’s history could shape its increasingly global growth trajectory. Oman proposed that the church’s compilation of assets may be increasingly important during a time when most of its membership expansion is centered in Africa and Latin America.
“The per capita wealth of Latter-day Saints today is likely higher than the per capita wealth of Latter-day Saints in the future,” he said. “What savings does is move money from the high per-capita wealth of Latter-day Saints now and transfers it to the lower per-capita wealth of future Latter-day Saints.”
Financing preceded the birth of The Church of Jesus Christ of Latter-day Saints.
The publisher hired to print the Book of Mormon required the full payment upfront. There was no church yet, and the printing would cost the equivalent of nearly $100,000 in today’s money. Prosperous New Yorker Martin Harris, for whom Joseph Smith had worked as a day laborer, covered the cost by mortgaging his 320-acre farm in 1829.
The church was organized in 1830. Five months later, Joseph Smith received a revelation stating that to God, all things are spiritual. That statement became the theological underpinning for the church’s vigorous economic development across the American frontier and through 21st century globalization. Church leaders continue to interpret the scripture to mean that both the spiritual and earthly are eternal and inseparable. For Latter-day Saint leaders, then, economic welfare is an indispensable part of religion, according to the late economic historian Leonard J. Arrington.
Joseph Smith had a management role in more than 20 business enterprises, according to the late historian D. Michael Quinn. Brigham Young oversaw economic expansion from the Rockies to the Pacific Ocean. They believed money was necessary to build the kingdom of God, provide maximum security for the church, help church members, and care for the poor and needy, Quinn said.
So the church bought property and built up — then abandoned under duress — frontier cities from Ohio to Missouri to Illinois. It received pennies on the dollar for the properties it could sell as it left each place.
“Leaders had to devise ways of helping poor members move westward,” Arrington wrote. The moves also involved church leaders in buying land and formulating plans for community and economic development.
Finally driven from the United States by murders and mobs, the bedraggled religious pioneers didn’t just stop beyond its borders in the Salt Lake Valley. They expanded from there to create more than 300 settlements ranging from Mexico to Idaho and California to Colorado.
Success in each depended on developing an economy from scratch. They founded stores, sawmills, printing shops, asheries, farms and much, much more. Some succeeded. Others did not. In early Utah, church leaders persisted in their quest to be self-sufficient from the United States.
Brigham Young once said that if the church was left alone for 10 years in the Great Basin, Latter-day Saints would establish themselves as an independent people. In the 1850s, he instigated missions dedicated to economies — the Iron Mission, the Sugar Mission, the Lead Mission and others for cotton, flax, silk, wine and wool.
“From the very beginning of the church, there was a need for money, and I think that’s something that influences how the church operates today, because it’s been such a large part of our history,” said Matthew Godfrey, senior managing historian for outreach and engagement in the Church History Department.
Church leaders also started a salt business and a resort, bought interests in railroads and telegraph lines, and pioneered the hydroelectric power industry in the West. All of those interests eventually were sold to eastern businesses. That, too, has been a Latter-day Saint pattern.
The Church of Jesus Christ filled community needs, then over time donated or sold off assets when it no longer made sense for the church or the need could be met by others, historians say. In some cases, keeping businesses would have benefited the church’s bottom line. For example:
In the 1930s, as public education disrupted church schools, the Latter-day Saints gave to Utah and Arizona what today are Weber State University, Utah Tech University, Snow College and Eastern Arizona College.
The church’s three banks merged in 1957, but in 1960, it got out of the banking business, too, selling its controlling interest in Zions Bank for $9.8 million. In 2021, Zions reported a net income of $1.1 billion.
In 1975, it donated its 15 “vigorous and financially viable” hospitals to a nonprofit organization because they were not “central to the mission of the church.” Intermountain Healthcare since has expanded to 33 hospitals in seven states with $13.9 billion in total revenue last year.
What remains central to the mission of the church is welfare and humanitarian aid, education, missionary work, genealogical work, meetinghouses and temples for weekly worship and religious ordinances.
Historical efforts by church leaders to build economic independence and look after the welfare of its members sometimes failed to pan out.
Deficit spending was common for the church in the 19th century. The church experienced deficits repeatedly, in the 1830s, ’40s, ’70s and ’90s, and in the 1900s, ’20s, ’30s and ’60s, according to historians.
The worst early financial setback was the failure of the Kirtland Safety Society, the church’s first foray into banking, though the institution technically was a joint stock company. It opened in January 1837, suffered major losses by May and closed in November.
“The church established the Kirtland Safety Society because, like other frontier communities, Kirtland was a cash-poor society. The idea was to leverage the land that people owned to provide for economic development in the area,” Godfrey said.
A complex set of factors doomed the bank. One was the nationwide Panic of 1837, a recession that caused 600 banks to fail. Every bank in Michigan closed, including one the church had acquired to shore up the Kirtland Safety Society. The church’s leader, Joseph Smith, lost the most money, Godfrey said.
“Generally, church-owned or -controlled businesses have been a drain on its resources, often helping drive the LDS church to the edge of bankruptcy,” Quinn wrote. “This happened first in 1837 during a national depression.”
Joseph Smith led the church next to Missouri, but within 10 months, the governor issued an extermination order against the Latter-day Saints. An apostle and at least 17 others were killed in the days before and after the order. (A future governor formally rescinded the order in 1976.)
The church again suffered losses in the next move, to Nauvoo, Illinois.
Argggg….more at: https://www.deseret.com/faith/2023/5/14/23649253/cbs-60-minutes-mormon-lds-church-finance-story-what-it-missed
