You Want the Church to Be a Corporation. Really.

I blame Time for the whole “LDS Inc.” movement.

The other day, our own Aaron B. posted this on Facebook:

The single DUMBEST criticism of the LDS Church is the claim that “it’s a business, not a church”, or “it’s a corporation, not a church”. Obviously it’s both …[fn1]

I’ll confess that, like Aaron, I’ve never been particularly impressed by the implication that somehow corporate organization is antithetical to spirituality. After a discussion with one of Aaron’s friends, though, I think I kind of understand where some who object to its corporate status are coming from. 

Aaron’s friend explained that he’d grown up with the church’s transcendent truth claims, the idea that the church was both True and special. And finding out that its organizational structure is common and secular felt like a letdown, somehow, the mundanity of the container tarnishing the claims of transcendence.

I can understand where that disappointment comes from, even if I disagree that there’s anything disappointing. That said, throwing “corporation” around like an epithet shows a significant lack of understanding of religion in America broadly, and of the benefits (not only to the church and its members, but also to those who are skeptical of the church’s good motives) of the corporate form. In the interest of helping out, then, some context:

The Corporate Form Is Common for Churches

It’s not unique to Mormonism. Among others, the Catholic church, the Presbyterian church, and the United Methodist Church incorporate.[fn2] They each do it slightly differently—the Catholic church appears to incorporate each diocese separately, where the Methodists appear to permit the incorporation of each church separately, and the Presbyterians incorporate at least at the state level.

And why do churches incorporate? A couple big reasons: for a tax exemption in the US, you have to have a corporation. Also, a corporation is a legal person that can enter into contracts and own property. That prevents issues with succession (that is, if the Bishop owns the diocese’s property, when he dies, what happens to it? A corporation, on the other hand, never dies, and when the Bishop dies or leaves, the corporation continues to own the property).

But I Don’t Trust Corporations (and/or the Mormon Church)

Fair enough. But there’s nothing inherent in the corporate form that is antithetical to religiosity. Believe it or not, under US law (or, better, state law in the US) there is no requirement that corporations maximize their profits.[fn3] Again, the whole point of corporate status is that the church has the ability to act in certain legal ways.

And, to the extent you don’t trust the church, you definitely want it to be a corporation. Remember the sex abuse scandals in the Catholic church? Those who were abused sued various Archdiocese where the abuse occurred, and won significant recoveries. Note that they won the recoveries from the corporate entities; had they been required to sue individuals, it would have been really tough to get any money, because priests—including those who abused children—take a legitimate vow of poverty. That is, the abusers were basically judgment-proof. But the corporate form made it possible for victims to have some degree of recovery.[fn4]

So Are You Saying I Can’t Criticize the Mormon Church?

Absolutely not. There are definitely places that the church does poorly.

I am saying, though, that criticizing the church for being a corporation is stupid. It misunderstands both churches and corporations. At best, it is a lazy way of saying, I’m critical, but I don’t want to work hard enough to explain what my criticism is. At worst, it’s a lazy way of saying, I’m critical, but I haven’t thought carefully enough to even figure out what my criticism is.

(N.b.: I know, from long experience, that someone’s going to comment that the church needs to disclose its finances!!!1! I mean, feel free, but I’m going to delete any comment that does, since it has nothing to do with the post at hand. The question of transparency is unrelated to the question of entity form.)

[fn1] And I’m not particularly interested in the argument that the church isn’t actually a corporation, but instead is a series of corporations. Sure, it’s “The Corporation of the Presiding Bishop” and “The Corporation of the First Presidency,” not “The Church of Jesus Christ of Latter-day Saints, Inc.,” but so what? What we think of Apple, Inc. is actually a series of corporations, LLCs, partnerships, and foreign entities, each of which has different duties and different roles. But, while for-profit entities differ in many ways from non-profit entities, in both, it’s easier to think of the series of entities as a single entity and, for most purposes, that’s good enough anyway.

[fn2] It’s not unique to those three, of course, but I didn’t feel like Googling any further.

[fn3] There is one case, about a century old, that suggests they might, but the context—a closely held corporation, minority shareholders who were being squeezed out, and a state court in Michigan—indicate that it has little, if any, relevance in today’s world.

[fn4] And note that it’s possible that, had there been no corporate form, there would have been a person to sue, but it was a whole lot easier with the corporate form.