This is a guest post from Canuck Mo.
Given the recent discussion of LDS Church revenue and expenses, I thought it might be interesting to discuss Canadian LDS finances. This website lists LDS Church revenues and expenses in Canada. Here’s a few figures I want to focus on for the fiscal year that ends Dec 31, 2016.
| Revenue | $176,584,725 |
|---|---|
| Expenditures | $219,465,068 |
This would seem to indicate that even in Canada, the church is deficit spending, injecting about $43 million ($42,880,343) to support the LDS Church in the Great White North. This would seem to support Quinn’s contention that there is much deficit spending by the LDS Church in foreign countries. However, there is something a bit curious there.
| Total expenditures before gifts to qualified donees | $109,589,960 |
|---|
What are those qualified donees? Further down, it says
Gifts Provided to Other Organizations
| Receiving Organization | Amount | In Kind | Political |
|---|---|---|---|
| Brigham Young University | $60,000,000 | ||
| Brigham Young University – Idaho | $39,000,000 | ||
| Brigham Young University – Hawaii | $10,875,108 |
Why is Canada supporting BYU-Provo, BYU-Idaho, and BYU-Hawaii? Do they send their students there to support $109 million donation from Canada? Rumor has it there are just 146 Canadian students in Provo. I don’t think tuition for the Provo students is $410,959, is it?
If we subtract that $109 million from the $219 million expenditures mentioned earlier, it turns Canada from a deficit of $43 million to a surplus of almost $67 million ($66,709,617).
I’m no accountant, but something seems a little strange here. Any accountants in the audience? Is this some sort of accounting trick? Comments?
Wheat & Tares 
Interesting. Looking at this link here (http://beta.charitycommission.gov.uk/charity-details/?regid=242451&subid=0) under the operations tab, I hadn’t realised Britain includes France, (though not the ROI). I’m sure the inclusion of France will have some bearing on costs and expenditures, since there is a greater density of members here than there is in France.
On the face of it, looking at the financials tab on that link, it appears expenditures exceeded income.
This is the link for the annual report (2016) of accounts to the charities commission for Britain (http://apps.charitycommission.gov.uk/Accounts/Ends51/0000242451_AC_20161231_E_C.PDF).
Page 13 makes interesting reading, not least the observation the reduced resources in 2016 cf 2015 were attributed to a decrease in funding from the ‘parent company’. Anyway, I am not an accountant, but it is interesting reading. Not least that ‘the charities objective is to maintain high liquidity’ and that the policy is to hold as minimum the equivalent of 12 months expenditure in reserve. But the really interesting bits are all the reports at the end where future plans are outlined, photographs of building improvements (lots for car-parking), and building extension or new building plans are outlined, and public benefits (a requirement for charitable status) are stressed, so a review of family history activities, reports from all the CES coordinators…
Didn’t spot any of the BYUs in the accounts.
I had this explained to me once as, “donating” to BYU is the easiest way to transfer huge amounts of money from Canada to the US.
BYU was mentioned in the CES coordinator reports where the Pathway program is being introduced however.
Jewelfox is 100% correct.
They used to transfer funds by very granular transfers. That creates a lot of work.
I can’t quote the source, but I remember hearing that Canada (and some other countries) don’t allow these donated funds to flow outside the country. They do have at least one exception for educational purposes where Canadians are able to participate in. That seems to line up with the 3 “gifts” listed.
In addition to the donations to the BYUs, the link shows 29% of the expenditures are listed as amortization. That would work out to be $63,644,870. I’m not an accountant, but my understanding is that is a write-down to account for depreciation – not an actual cash outlay. I believe the Church pays for land and buildings outright – no financing. The amortization could be the way the Church expenses these assets to the people using them. Removing both the BYU gifts and amortization expense, the actual Canadian cash surplus would be about $131 million.
Dave—yes. Canada and the US are net positive and financing all the places that are net negative.
Amortization is not a cash outlay, but the outright purchase of land and buildings is a cash outlay–one that is not counted on the expenditure statement. The buildings, at least, would be amortized over time, and the reported amortization expense in any given year would reflect a portion of building purchases in each of the last 30 or so years. That would be a reasonable (if somewhat low) estimate of expenses for buildings in the current year. So it reflects expenditures undertaken in Canada and should not be excluded. (Land is trickier. It’s not clear to me that those expenses would ever show up on an income statement, but a real accountant could set me straight.)
Happy Hubby is right. From the Canadian Charity Law: The Income Tax Act (Canada) allows charities to conduct their charitable purposes by: 1) giving money or assets to another “qualified donee” (see below); or 2) by conducting their “own activities” (at home or abroad). There is no ‘third option’. A Canadian charity cannot just transfer or grant money to a foreign NGO or charity. In general, the same notion applies to operations within Canada. A Canadian charity cannot just give or transfer funds to another Canadian organization that is not a qualified donee (e.g., a registered charity).
The list of “qualified donee” includes the below:
universities outside Canada with a student body that ordinarily includes students from Canada (these universities are listed in Schedule VIII of the Income Tax Regulations);
So, since the church couldn’t spend all the tithing it gets in Canada, it sends it to a qualified university outside of Canada. This in affect launders the money, as the SLC church needs to spend less of its US donations for these schools.
“money laundering” has a certain connotation that isn’t exactly positive.
What about “Money cleansing” instead of “money laundering”? 🙂
“Transfer” — that is the appropriate term.
When I consider my membership in the Church, I consider I belong to a Church without borders. I think most members think this way. There is not one Church of Jesus Christ of Latter-Day Saints for the US, one for Canada, one for Nigeria, and so on. The Church, however, does comply with the laws of each country where it has a presence.
The Canadian government may dictate it’s charitable giving rules to be Canadian centric and don’t recognize foreign or worldwide charitable work. That’s on them, that’s their construct, but it doesn’t mean the Church must adopt that view. If complying with Canadian laws means the most effective way for Canadian donations to help the Church’s worldwide mission, without being taxed away, is to apply them in one “allowable” area of Church operations, that’s being prudent. It frees up other fungible funds to be applied to other areas of need throughout the world.
Dave C —exactly. The real issue with money is that it is so fungible.
So a dollar to BYU from one source frees up a dollar to go to another.
If the salaries and stipends were larger it would create issues, or potential issues.
But it isn’t going into BYU and then back out (that would be laundering). It actually gets spent there.
The real key is looking at older statements. Those used to be long, complex and involved. The current method is just a lot simpler for the same result.