Today on LDS.org, Presiding Bishop Gérald Caussé published a companion article to his recent remarks at the 2018 Church History Symposium, “Financing Faith: The Intersection of Business and Religion.” In conjunction with Bishop Caussé’s article and talk, the following materials provide additional context regarding Church finances.
The Church of Jesus Christ of Latter-day Saints has a singular purpose: to invite all people to come unto Christ. The Church is not a financial or profit-making institution; it uses resources to carry out its divinely appointed mission. The Church is a steward of the tithes and generous donations provided by its members, and it practices the principles it teaches — avoiding debt, living within a budget and preparing for the future.
Following sound financial principles over an extended period of time, the Church has grown from meager beginnings into a worldwide organization able to support its divine mission. Its current relative prosperity only reflects the faith of its members in keeping the law of tithing and the accomplishment in their lives of the Lord’s often-repeated promise that “inasmuch as ye shall keep my commandments ye shall prosper in the land” (Alma 9:13).
The Church uses its resources to pursue the Lord’s work by:
- Sharing the message of Jesus Christ throughout the world.
- Building and maintaining places of worship to strengthen individuals and communities (stakes, districts, wards and branches).
- Providing welfare, humanitarian assistance and emergency response to alleviate suffering and help people achieve self-reliance.
- Promoting spiritual and secular learning through the Church Educational System (seminaries, institutes, universities and other higher education initiatives).
- Building and operating temples and sustaining family history work to strengthen families.
- Supporting general institutional administration.
Resources used to carry out this work come principally from the tithing donations of Church members. A small portion of funds comes from businesses maintained by the Church.
Budget and Expenditures
The Church’s Council on the Disposition of the Tithes is composed of the First Presidency, the Quorum of the Twelve Apostles and the Presiding Bishopric. Together, they establish and administer the specific policies and budgets guiding the use of Church resources (see D&C 120:1). Those policies embody the following principles:
- Expenditures will not exceed forecasted revenue.
- The budget for operating expenses will not increase at a more rapid rate than anticipated tithing contributions.
Budgets for the Church’s efforts are specifically approved and funds are appropriated by the Church’s Budget and Appropriations Committee, a subcommittee of the Council on the Disposition of the Tithes. Additionally, the Church Auditing Department, which is independent from all other Church departments, employs credentialed professionals to ensure that Church funds are administered and recorded in accordance with Church policies and standard accounting practices.
Church members are taught to “gradually build a financial reserve by regularly saving [a portion of their income]” (Providing in the Lord’s Way: Summary of a Leader’s Guide to Welfare [booklet, 2009], 2). The Church applies this same principle in its own savings and investments. In addition to food and emergency supplies, the Church also sets aside funds each year for future needs. These funds are added to Church reserves, which include stocks and bonds, taxable businesses, agricultural interests and commercial and residential property. Investments can be accessed in times of hardship or to meet the emerging needs of a growing, global faith in its mission to preach the gospel to all nations and prepare for the Second Coming of Jesus Christ (see Gérald Caussé, “In the Lord’s Way: The Spiritual Foundations of Church Financial Self-Reliance,” Mormon Newsroom, Mar. 2, 2018).
Some investments serve a dual purpose. For example, Church President Gordon B. Hinckley stated that “we have felt that good farms, over a long period, represent a safe investment where the assets of the Church may be preserved and enhanced, while at the same time they are available as an agricultural resource to feed people should there come a time of need” (“The State of the Church,” Ensign, May 1991, 54). Another example is the Church’s participation in the development of downtown Salt Lake City. With its investment in the City Creek Center (a mixed-use development that includes retail space, residential units, office space and parking), the Church enhanced the environs of Temple Square and underscored a commitment to Salt Lake City, Utah, where it is headquartered. The investment increased local economic activity during a financial downturn and attracted visitors and residents to Salt Lake City’s historic downtown.
The Church’s reserves are overseen by Church leaders and managed by professional advisers, consistent with wise and prudent stewardship and modern investment management principles. Ultimately, all funds earned by the Church’s investments go back to supporting its mission to invite souls to come unto Christ.
While the vast majority of its financial resources comes from the tithes and offerings of Church members, the Church also holds business interests that help in accomplishing its mission.
“Essentially,” President Gordon B. Hinckley explained, “the business assets which the Church has today are an outgrowth of enterprises which were begun in the pioneer era of our history when we were isolated in the valleys of the mountains of western America.”
President Hinckley noted the sugar beet industry, the Hotel Utah, media and merchandising interests as examples of early Church enterprises. “The Church has maintained certain real estate holdings,” he continued, “particularly those contiguous to Temple Square, to help preserve the beauty and the integrity of the core of the city. All of these commercial properties are tax-paying entities.” He observed that “the combined income from all of these business interests is relatively small and would not keep the work going for longer than a very brief period” (“Questions and Answers,” Ensign, Nov. 1985, 49).
Latter-day Saints believe in “obeying, honoring, and sustaining the law” (Articles of Faith 1:12). Accordingly, the Church and its affiliated entities pay taxes and other governmental levies as required by the laws of each country in which the Church functions. In the United States, where churches and other nonprofit organizations are generally exempt from federal and state income tax, the Church pays taxes on any income it derives from revenue-producing activities that are regularly carried on and are not substantially related to its tax-exempt purposes. Church-affiliated entities that are organized as for-profit corporations pay regular federal and state corporate income taxes on their net income. The Church and its affiliated entities also pay property taxes on property that is not used for religious, educational, or charitable purposes, including taxes on undeveloped land and properties held for investment or commercial purposes. Government fees, levies and assessments are paid in connection with the development of Church property. The Church also pays federal and state employer taxes and withholds and remits employee payroll taxes. Where applicable, the Church and its affiliated entities pay state and local sales and use taxes.
Presiding Bishop Gérald Caussé has said, “We are the Church of Jesus Christ, and this Church has no other objective than that which the Lord Himself assigned to it; namely, to invite all to ‘come unto Christ, and be perfected in him’ (Moroni 10:32), by ‘helping members to live the gospel of Jesus Christ, gathering Israel through missionary work, caring for the poor and needy, and enabling the salvation of the dead by building temples and performing vicarious ordinances’” (“In the Lord’s Way: The Spiritual Foundations of Church Financial Self-Reliance,” Mormon Newsroom, Mar. 2, 2018).
Read the rest of the article on LDS Newsroom RSS Feed.