Latter-day Saint officials kept the size of the church’s $100 billion investment reserves secret for fear that public knowledge of the fund’s wealth might discourage members from paying tithing, according to the top executive who oversees the account.
For members of The Church of Jesus Christ of Latter-day Saints, tithing — donating 10% of one’s income to the faith — “is more of a sense of commitment than it is the church needing the money,” Roger Clarke, head of Ensign Peak Advisors, which manages the denomination’s investing holdings, told The Wall Street Journal.
“So they never wanted to be in a position where people felt like, you know, they shouldn’t make a contribution,” Clarke said.
The Journal’s extensive exploration of church financial holdings included interviews with Clarke and with top LDS officials, including Presiding Bishop Gérald Caussé, the ecclesiastical leader who oversees the Utah-based faith’s vast financial, real estate, investment and charitable operations.
Neither Clarke nor other officials would provide The Journal with details on the size of the church’s annual budget or how much money goes to Ensign Peak. But, the paper reported, they “gave estimates for its main areas of expenditure that, collectively, total about $5 billion.”
In recent years, the church’s reserve fund has grown by about 7% annually, Clarke told The Journal, from returns on existing investments and not member donations.
The fund’s handlers were instructed not to invest in industries that Latter-day Saints consider objectionable — including “alcohol, caffeinated beverages, tobacco and gambling,” he said, alluding in part to the church’s health code known as the Word of Wisdom, which bar those substances (although caffeinated sodas are not part of that prohibition).
Some of the stocks Ensign has invested in include Apple Inc., Chevron Corp., Visa Inc., JPMorgan Chase, Home Depot and Google, according to the article.
Clarke and former Ensign employees said the firm created a system of more than a dozen shell companies to make its stock investments harder to track. That strategy, Clarke said, was designed to prevent members from parroting what Ensign Peak was doing and to, as the paper stated, “protect them from mismanaging their own funds with insufficient information.”
Debates about Mormon finances and the question of transparency have persisted for decades but were triggered again in December by a “whistleblower” complaint filed by David Nielsen, a former portfolio manager with Ensign Peak, and reported by The Washington Post.
In a complaint filed with the IRS, Nielsen accused Ensign of taking in billions from members’ tithes and other donations and not spending any of it over a 22-year period for charitable purposes. He urged the agency to strip the denomination of its tax-exempt status, saying Ensign may owe billions in taxes.
Church leaders may be right to worry that the financial revelations could have a negative impact on tithe paying.
Carolyn Homer, a Latter-day Saint who lives in Virginia, told The Journal that after she heard about the money held by Ensign Peak, she resolved to tithe less and give more to other charities.
And after The Post piece, Patrick Mason, head of Mormon studies at Utah State University, told The Salt Lake Tribune that stories like this “will undoubtedly trouble many church members and lead them to wonder whether their charitable giving is best directed toward an institution that reportedly has a stockpile twice as large as Harvard’s endowment.”
“We believe at some point the Savior will return. Nobody knows when,” Clarke told the newspaper. When it does happen, “we don’t have any idea whether financial assets will have any value at all. The issue is what happens before that.”