How the Mormons Make Money - Businessweek - 0 views
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“The Mormon Church is very different than any other church. … Traditional Christianity and Judaism make a clear distinction between what is spiritual and what is temporal, while Mormon theology specifically denies that there is such a distinction.”
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To Latter-day Saints, opening megamalls, operating a billion-dollar media and insurance conglomerate, and running a Polynesian theme park are all part of doing God’s work. Says Quinn: “In the Mormon [leadership’s] worldview, it’s as spiritual to give alms to the poor, as the old phrase goes in the Biblical sense, as it is to make a million dollars.”
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“There are religious groups that own radio stations, but they don’t also own cattle ranches. There are religious groups that own retreats, but they don’t also own insurance companies,” says Ryan Cragun, a sociology professor at the University of Tampa and co-author of the recently published book Could I Vote for a Mormon for President? “Given their array of corporate interests, it would probably make more sense to refer to them as The Church of Jesus Christ of Latter-day Saints Holdings Inc.”
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As a religious organization, the LDS Church enjoys several tax advantages. Like other churches, it is often exempt from paying taxes on the real estate properties it leases out, even to commercial entities, says tax lawyer David Miller, who is not Mormon. The church also doesn’t pay taxes on donated funds and holdings.
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Under U.S. law, churches can legally turn around and sell donated stock without paying capital-gains taxes, a clear advantage for both donor and receiver.
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According to U.S. law, religions have no obligation to open their books to the public, and the LDS Church officially stopped reporting any finances in the early 1960s. In 1997 an investigation by Time used cross-religious comparisons and internal information to estimate the church’s total value at $30 billion. The magazine also produced an estimate that $5 billion worth of tithing flows into the church annually, and that it owned at least $6 billion in stocks and bonds.
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a recent investigation by Reuters in collaboration with sociology professor Cragun estimates that the LDS Church is likely worth $40 billion today and collects up to $8 billion in tithing each year.
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Several high-ranking church insiders told him that the church’s finances are so compartmentalized that no single person, not even the president, knows the entirety of its holdings
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it’s important to start at the very top: The Mormon Church is owned and run by what is called the Corporation of the President of the Church of Jesus Christ of Latter-day Saints. This entity is a “corporation sole,” which is an obscure legal body owned entirely by one person. In the case of the Mormon Church, that person is Monson, the prophet.
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McMullin says the Mormon Church has “two or three or four for-profit entities under the Presiding Bishopric,” and names DMC, AgReserves, and Suburban Land Reserve. He says DMC has about “2,000 to 3,000 employees.” He also confirms Hoover’s estimate that DMC has annual revenue of roughly $1.2 billion
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The Mormon belief in the spiritual value of financial success goes back to 1830, when the religion’s founder, Joseph Smith, announced to his followers that God had told him the following: “Verily I say unto you, that all things unto me are spiritual, and not at any time have I given unto you a law which was temporal.” In other words, historian Quinn translates, “whether it’s investing in a merchandising store, or tannery, or a lumber mill, or a hotel, or a bank—all of which occurred under Joseph Smith’s leadership—according to that 1830 revelation, it’s all spiritual.”
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In its early days, the church’s entrepreneurial rigor was fueled by necessity. Mormons, who clashed with neighbors and government authorities over practices such as polygamy, often had to fend for themselves. The group also espoused separatist financial goals of “erecting and maintaining an improved economic system for its members,” according to historian Leonard J. Arrington, who points out that 88 of Smith’s 112 revelations deal directly or indirectly with economic matters.
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When Mormons arrived in Utah in 1847 it was a barren territory, still under Mexican jurisdiction. To settle the land, Arrington writes, over a 15-year period in the late 1800s, “Mormons constructed 200 miles of territorial railroad, a $300,000 woolen mill, a large cotton factory, a wholesale-retail concern with sales of $6,000,000 a year, more than 150 local general stores, and at least 500 local cooperative manufacturing and service enterprises.”
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oday, Temple Square is filled with statues glorifying the industry of those pioneers. The state emblem is a beehive, in honor of diligent work, and the term “deseret,” used in the titles of many Latter-day enterprises, derived from the Book of Mormon, means “honeybee.”
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Until the 1990s, wards—the Mormon equivalent of parishes—kept some donated member money locally to distribute for aid and activities as they saw fit. Today all money is wired directly to Salt Lake City. McMullin insists that not one penny of tithing goes to the church’s for-profit endeavors, but it’s impossible for church members to know for sure. Although the Mormon Doctrine and Covenants says “all things shall be done by common consent in the church,” members are not provided with any financial accounting.
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the Mormon Church donates only about 0.7 percent of its annual income to charity; the United Methodist Church gives about 29 percent.
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“Though the church’s monetary donations are significant, much of the ‘value’ of our service is not monetary, but in the hundreds of thousands of hours of service and the talent and expertise given by church members to help others around the world.”
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The LDS Church’s legions of missionaries and volunteers don’t merely spread the Mormon message around the world; they’re also vital to the church’s businesses. According to McMullin, DMC alone employs 1,400 “people who are volunteering their time and their services—some are part-time and some are volunteer.” Many of these members being asked to serve full- or part-time are retirees.