Over the last week or so, a number of people have pointed me to investigative journalism regarding the church’s finances in Canada and Australia and asked my opinion on them. Which is flattering but, unfortunately, right now I don’t have a ton of spare time. So rather than go through in detail, I’m going to try to contextualize a little bit of what I think is going on.
And what I think is going on is two things. First, the church thinks of itself and, to the extent it legally can, operates as a single economic entity. Over the last several decades or so, it has consolidated its finances in Salt Lake (which significantly diverges from most religious organizations I’m familiar with, including other hierarchical religions like the Catholic church).
Second, the church is obsessed with being financially opaque. It values its financial privacy to a degree that it can be harmful to the public’s perception. (I’m sure I’ve blogged about this, but I’ve also written about the history of the church’s varying levels of financial transparency/opacity for Dialogue.)
And these two things, I believe, underlie the stories coming out of Canada and Australia. And frankly, my quick blog post (written between getting kids up for school, getting them breakfast, and getting ready for work) may or may not be satisfying. It’s not meant to convict or exonerate the church. And pretty much everything I know about this comes from two articles. And I believe that the church should be more financially transparent, and that such transparency would be good for it in both the short and the long run.
Canada
The news out of Canada is that the Canadian church has sent about C$1 billion to the BYUs over the last fifteen years.
Which, I have to admit, I found kind of unsurprising. More on that in a minute.
The church has a separate corporate existence in Canada (and Australia, when we get there). Like in the US, my understanding is that Canadians who donate to the (Canadian) church get a charitable deduction. But Canadian law (at least according to the article–I’m not an expert in Canadian tax law) requires a Canadian charity to use the money for charitable purposes or to give it to another qualified charity. The US church is not a qualified charity for these purposes, which undercuts the church’s general financial organization. Like, in the US, when you hand your $100 of tithing to the bishop, he deposits it in a bank account that goes to Salt Lake, then Salt Lake distributes that money back according to its own criteria. (This is, on net, probably a good thing. Otherwise, poorer wards would have fewer resources, while richer wards could fund massive parties or ski trips or whatever.)
That’s not an option in Canada. But good news! Money is fungible. So if the Canadian church can’t remit tithing to the Salt Lake church, economically it does exactly the same thing by paying expenses that the Salt Lake church would have to pay. If the BYUs are qualified recipients and the church would have put at least C$1 billion into them over those 15 years, the church is indifferent to whether it pays directly or the payment comes through Canada or Australia or the UK or Brazil or whatever.
Secondarily, Canadian law requires some level of disclosure of how Canadian charities spend their money. By transferring all except some administrative expenses to the US and letting the US pay expenses directly, it circumvents the detailed reporting.
So what should we think of this? It’s ultimately up to you. The journalist points out that this is perfectly legal. Of course, perfectly legal is not the same as normatively good. And frankly, this issue would go away if the worldwide church were transparent about its finances, a thing entirely within its power.
That said, honestly, this feels like the church trying to shove the square peg of Canadian charity law into the round hole of its preferred corporate/economic regime. It really wants to act like a unified economic entity and, because Canadian law makes that hard, it has adjusted. But again, the fungibility of money means that, by structuring its expenditures to meet Canadian law, it can effectively include its Canadian revenue within its unified vision of church finances.
Australia
An Australian newspaper reports that the church has massively overstated its humanitarian giving. (Okay, it says “charitable,” but legally, charitable includes religious—it’s using “charitable” to mean “relief of poverty,” so I’m going to stick with “humanitarian.”) Several years of leaked financial statements suggest that Latter-day Saint Charities has made significantly less humanitarian donations than the church claims. (Apparently there’s also a 60 Minutes Australia TV segment? but I don’t watch US 60 Minutes—in fact, the only TV news-like show I watch is the Last Week Tonight segment that goes on YouTube—and I don’t plan on starting now.)
Is it plausible? Absolutely. Like I’ve said way too many times already, the church is far too opaque with its finances. But in evaluating the articles claims, I did have a couple questions.
First, the article says that the church:
“the church has claimed its global giving through its charity arm, Utah-based Latter-day Saint Charities increased by $US1.35 billion between 2008 and 2020. The church says it funds programs through organisations such as the Red Cross, Water For People and the World Food Program.
“But an analysis of the Latter-day Saint Charities own accounts — which have never been released or reported previously — show it only provided $US177 million in total charitable support over the same period, a discrepancy of $US1.18 billion ($1.82 billion). Latter-day Saint Charities uses global accounting firm PwC as its auditor.”
But here’s the thing: it doesn’t link to that claim. And in the church’s 2021 disclosure, it doesn’t mention anything about Latter-day Saint Charities in connection with its giving. And frankly, here the opacity gets in my way. I don’t know the purpose of LDS Charities. I don’t know whether the church does the bulk of its humanitarian giving through LDS Charities or if it just uses LDS Charities for particular endeavors. But without knowing whether LDS Charities is the exclusive font of church humanitarian aid or not, its financial statements don’t tell us much.
Again, it is clearly possible that the church is overstating its humanitarian aid. Its lack of transparency means that’s something we can’t objectively evaluate. But the Australian story doesn’t give us a ton of information about that question, either way.
And again, this is within the power of the church to resolve. It could be—and should be—more transparent.
And with that, it’s time to get kids to school and start the work day.
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