Sam Brunson did a great overview at BCC of the most recent breaking “scandal,” that a whistleblower who was working for the Church revealed that EPA (Ensign Peak Advisers) has mostly static investments equaling $100 billion that were produced by investing a portion of the members’ tithing funds. This pool of funds is tax exempt, or probably is tax exempt (Sam points out the gray areas this type of investment live in, similar to a university endowment). Sam asks three questions: is it true (the $100B), should the Church have this much moolah at its disposal, and does it violate tax law. I’d prefer to focus today’s post on that middle category: should a Church have this much money?

I suspect this is a question that is bothering some of those who are inclined to resent the way the Church handles tithing. It’s also a sticking point for those who feel the Church isn’t sufficiently charitable with the means at its disposal. Sam points out, rightly, that this is a fairly new problem for the Church, given that the Church had serious solvency problems in the 70s, and ward members (in addition to tithing) were asked to contribute to the Ward Budget directly.

So, let’s talk about tithing to an organization with a behemoth fund in its back pocket. Some of the issues are:

  • Regressive tax / church welfare requirements
  • Tithing settlement / bishop oversight
  • Temple recommend / pay to play
  • Transparency / member engagement
  • Loyalty / trust

Regressive Tax

According to the D&C, we are supposed to pay tithing on our “increase” (because it was written for farmers) which sounds like it shouldn’t include the money you use to pay for your housing and groceries (or crops you consume). The practice of paying on either net or (worse) gross income creates a seriously problematic regressive tax. It’s the same problem as any flat tax. It sounds “fair,” until you consider the vastly different circumstances and resources of the poor vs. the wealthy.

People who live paycheck to paycheck could need 95% of their net income to live, but also need to pay 10% of it to the church. Those who are middle class might need only 70% of their income to pay for basics, so even after tithing, they have 20% to save, invest, or use to pay for their kids’ college. That’s a regressive tax.

Then add to that the plight of the poor who seek church welfare. They are instructed that to qualify for short-term, limited assistance, they must be full tithe payers, and they must have a plan to become self-reliant. It makes the task much harder to have two potentially incompatible constraints.

Tithing settlement
Some church members find the process of annual bishop oversight to be nosy and intrusive. This can vary greatly from bishop to bishop. The process is designed to be an annual interview between the member and the bishop in which the member declares his or her tithing payer status as full, partial or non-payer. Sounds simple enough.

While these interviews are voluntary (trust me, if you don’t go, what are they going to do?), there are some objections to various ways bishops have handled the scheduling, how contributions are tracked in families with spouses that handle finances separately or part member families, badgering by a bishop who disbelieves the member’s self reported status, sexist “head of household” designations, and occasional strong-arm tactics if a bishop believes the member is paying less than he thinks that person should.

Temple Recommends
Maybe this is an offshoot of the less solvent 1970s, but having a temple recommend (which also means you are a full tithe payer) is a requirement for full participation on your local congregation. If you want to bless a baby, hold a calling, and generally be considered “in good standing,” you must pay up. It used to be a much more common thing for adults to allow their recommend to lapse due to non payment of tithing, then to have a family wedding requiring some last minute corrections (coughing up whatever the local bishop deemed necessary to demonstrate reformation). Jaded ex-Mormons refer to this as “pay to play,” and honestly, that’s what it has become since an active Temple Recommend became shorthand for worthy member.

This is probably the biggest sticking point for many–the idea that Church members put money in, but don’t know what happens with it. That the Church could go from such questionable financial status to something so grand in a few short decades is both impressive and a little alarming. Joseph Smith’s track record with money was such that I wouldn’t have entrusted him with a huge investment portfolio. We’ve come a long way since Kirtland. Sam’s article suggests that as a new problem, it is something the Church must be grappling with: how to operate with so much money available. How much should be given to charities, which ones, through what distribution channels. Will the Church grapple with it well or will it become more and more corporate? The charitable giving is a drop in the bucket compared to the available funds, but perhaps that will correct itself with the right planning. Two incidents of these funds being used to bail out poor Church investments were cited in the article. If that’s what this money is for, it seems of questionable benefit for those of us who paid the tithing that was invested in this way.

E. Causse stated that having these funds available is good preparation for the second coming, without really specifying how they would be of benefit in such a situation. Is money still needed after Jesus comes again or is that a capitalist fear that will be rendered moot? What financial needs would emerge in that situation that are more pressing than the plight of the homeless or lifting our fellow humans out of poverty through education and health care?

Lack of information about how funds are spent can lead to less engagement in a good cause, even if members don’t mind paying into a black hole. Our current system leads to detachment from these funds, not engagement with good causes.

Loyalty / Trust
Church members who feel a high degree of loyalty to the institutional Church will see this story as a positive one: evidence of good financial stewardship and learning from past mistakes (which is certainly a valid interpretation if these numbers are correct). They likely also view tithing as something out of their hands, in the hands of those who know better, and who are worthy of their trust as good men with inspired plans to invest for tomorrow, and to do the good they can today without jeopardizing the future. The very amount could be seen as a mark of God’s favor.

For those who already feel resentful of the Church for various reasons, the lack of trust in past actions creates skepticism about how the funds are being used and whether the Church is being responsible in requiring this level of sacrifice, even from the poor among us. Will these funds be used for political aims that some of us don’t support, that hurt members of our family or congregation who are vulnerable or marginalized? Is the Church benefiting from poorly written legislation, navigating loopholes rather than evaluating the ethics of the tax laws?

For those who sit somewhere between the extremes of cynicism and fealty, trust is fostered based on personal experience and one’s own priorities and values.

So what do you think?

  • Do you trust the Church to be a good steward of this much money?
  • Do you feel our tithing policies and practices are administered well as they are or would you make changes to them?
  • Do you think the Church should be more transparent with its finances, or would that lead to bad outcomes?
  • Will this latest “scandal” blow over like Mormons, Inc. did or will it result in less engagement from Church members (and a reduction in tithing payment)?