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Behind the Latter-day Saint church’s vast wealth are two centuries of financial hits and misses

Salt Lake cit

During the first weekend of April 2023, the Church of Jesus Christ of Latter-day Saints held its semiannual General Conference in Salt Lake City. Tens of thousands of members were expected to attend in person, with millions watching from home.

This yearly ritual may seem striking in the face of the church’s February 2023 agreement to pay a US$5 million fine in a settlement with the U.S. Securities and Exchange Commission. According to its press release, the SEC concluded that the church went to “great lengths” to “obscure” its investment portfolio. A church statement expressed “regret” that its leaders had followed faulty legal counsel and insisted that the fine would be paid through “investment returns” rather than members’ donations.

The settlement came on the heels of other controversies about the church’s taxes and financial portfolio, which journalists and whistleblowers have estimated at around $100 billion.

ANALYSIS OF THE WORLD, FROM EXPERTS

These revelations have raised questions concerning the ethics of a religious organization amassing such a large amount of wealth, and how it is balanced with charitable giving. But headlines often overlook the long and surprising history of the modern church’s financial success – as well as the continued anxiety surrounding its economic reserves.

BUST TO BOOM

Donations only increased over the following decades, however, as the church continued to grow rapidly. The prosperity of the 1950s enabled an ambitious construction agenda for the next decade, as the church built over a thousand new meetinghouses and temples for its exploding membership.

Yet high spending, poor financial management and unwise or unlucky investments brought another financial crisis, and the church soon found itself cash-poor. By 1962, the budget had amassed a $32 million deficit. Leaders ceased offering detailed financial reports, which had been inconsistent yet common staples at the church’s General Conference.

Huntsville, TEXAS — Things started looking up the next year when N. Eldon Tanner, a successful Canadian politician and businessman, joined the church’s leadership and modernized its financial structure, investing any surplus. The church was once again on solid financial footing by the end of the 1960s, though it did not resume the release of detailed financial reports. Instead, Tanner empowered a private economic team to continue growing the faith’s portfolio.

Decades of membership growth, tithing donations and lucrative investments resulted in the modern church’s massive accumulation of wealth. This financial success has enabled it to oversee a worldwide church with nearly 17 million members of record, tens of thousands of employees and countless volunteer and charitable programs.

Its investments became so profitable in the early 2000s that, according to the SEC report, church leaders explored ways to shield their success from the public. According to one whistleblower, church authorities feared that greater transparency would discourage members from further tithing.

GIVING TO GOD

While the church reports giving over $1 billion in charitable aid last year, some members and observers alike critique leaders for not donating more, given the vast size of its investment portfolio, which is almost twice the size of Harvard’s endowment.

The issue also raises important ethical questions regarding a religious institution’s obligations toward its own members. Should Latter-day Saints, especially those who are struggling financially, still donate a tenth of their income to a church whose reserves are likely deep enough to pay off more than a decade of expenses? The seeming discrepancy between the transparency required of individual members and the church’s own lack of accountability has unsettled some members.

Yet many believers emphasize that their tithing’s purpose is not merely to add to the church’s coffers but to help build the kingdom of God – their donations are primarily offered for spiritual reasons, not worldly ones. And investments are also a safety net for the faith’s growth: Leaders likely hope it can support rapidly growing membership in lower-income countries.

As absurd as it may be to call a $100 billion dollar portfolio a “rainy day” fund, the church’s turbulent history may have led leaders to see it as just that.