Will a Man Rob the Corporate Sovereign Fund?

Updated: Feb 12

Early on, the economic laws of Mormonism were proto-socialistic, based on the Owensian theories of applying the economic laws in the Book of Acts in the New Testament, where the covenant people shared all in common together. This was an attempt to eliminate poverty, and any church willing to take the Restoration of a New Testament church seriously, would look at the economic systems set up by the original Apostles. It was was the keystone doctrine of Mormonism in many ways.


Joseph Smith revealed consecration[1], which was set up so that converted Saints would do two things 1) Consecrate all of their property to the Church, and receive back a stewardship, and 2) Donate all of their surplus (defined as what was left over after all expenses were covered) to the church for redistribution, in essence, for the poor. The attempt to implement this was mostly focused on the church in Missouri and it was a dramatic failure. The definition of needs and wants were often blurred. The bishop was instituted to be the economic steward of the redistribution, keeping a storehouse for the poor. Yet as the Missouri problems peaked in 1838, it was clear to Joseph Smith, that leaders who were entrusted with property redistribution the stake presidency in Missouri, including David Whitmer and W.W. Phelps[2], were abusing this authority by land-sharking in northern Missouri and then selling back property to Saints resettling there. This was one of the catalysts to the final solution in Missouri that ended up expelling all Mormons from the state. The hearts of men were too corrupt to initiate such a radical economic system without baby steps.


Thus, in Nauvoo, Joseph stepped back the economic model simply to the Judeo-Christian concept of[3]“tithing.” Under this system, properties were not consecrated, but surpluses were still donated, initially all, but ongoing at a tenth, instead of 100%. A surplus and interest were defined in terms of small business, not paychecks (since the idea of a paycheck was limited in the mid-19th Century). Most people were farmers and small business proprietors. They would view this in terms of a retained earnings, with surpluses being defined as earnings on the investment of assets. It would have included all cash inflows incurred to support the business as well as outflows, but a tenth of what was left over after reconciling would be the tithe. In agrarian America, the household expenses were typically part of the business model and were not separated. Often, the tithe was in kind, not cash. This new system was meant to be less burdensome on the people, while supplying needs for the church both in terms of income, and for the poor.


For a half a century, this was the model of operations for the LDS Church. It was marginally successful, depending on booms and busts. However, past financial interloping by the Federal government against the Church under the Edmunds/Tucker Act on 1887 combined with the severe depressions of the late 1800’s threatened to bankrupt the Church, creating need for new cash. After a decade of financial turmoil, Lorenzo Snow is credited for fixing the problem by placing a stronger and better-defined emphasis on tithing. In the movie, [4]Windows of Heaven, Snow purports to receive a revelation on promising the Saints rain if they tithed. Of course, this prophecy was only recorded some 35 years later, and the truth of the rain coming was tempered by the fact that it took three more years for the drought to break. Snow began to emphasize the importance of tithing and began tightening up its emphasis, creating a new demand on the Saints to tithe.


Portrayal of Lorenzo Snow in Windows of Heaven


Although tithing was being emphasized more at the time, it was still defined as retained earnings with farms and households being commingled enterprises. However, one other concept came into being with this new focus on tithing, the [5]Church Handbook of Instructions, initially only a financial manual for the handling of tithes since there almost no uniformity for how tithes were handled at the time, introduced a systematic way to interpret tithing. Later, the Handbook’s focus grew to interpret all sorts of labyrinthian policies.

The idea of tithing being simply, “interest” was one that morphed over time. It seems to have taken advantage of two factors: more Americans being employed with paychecks instead of working their own farms and businesses, and using that language to shift the intent of income from a balance retained earnings interpretation, to a gross income interpretation. While the Church has never been very explicit about what defines income, they have [6]inferred “interest” as income in their most recent statements. For most Mormons, and those in leadership who interview and ask people each year about their settlements of tithes, income is what you get on your paycheck each month. Some even go so far as to define tithe-able income as pre-tax gross income. On the other hand, those that own businesses, or having holdings, or are simply wealthy, use the [7]older definition because it makes little sense to pay a tenth of gross income (as on an income statement). For example, if you have $200,000 of annual gross income, but only $100,000 of expenses in your enterprise, and you are a small business, you only see $100,000 in retained earnings and that becomes both your taxable net income and your tithe-able income. Essentially, you are only truly earning $100,000 and would be paying $20,000 on that income, which is 20%, under the gross tithing model. If, however, you only made $50,000, it would be almost half of your earnings! And for many businesses, household expenses are written off as business expenses, and thus, they co-mingle in the same way their ancestors did 100 years ago. So, of that $100,000 or $50,000 they are claiming as earnings, many of these would be netted after personal expenses are written off as business expenses. These tithe payers often pay tithing once a year after they do their taxes. Some of them donate stocks in lieu of cash. Many remember the controversy of [8]Mitt Romney’s taxes being less than it should have been because taxes are a percentage of income, but most of the Romney’s gains were in capital assets, not income. For the ultra-rich who file taxes, income or interest on their annual tax statement may be much less than they really earn, particularly when the unrealized gains aren't monetized. While many rich Mormons may define tithing more broadly and define it as a percentage of capital gains, they are not required to under the Mormon tithing definition of “income,” because often the gains are not realized or recognized under tax laws.


The stark reality is that under this system, the richer person pays less as a percentage of total earned wealth than the middle-class person who is taking home a check from his employer every month but cannot write off personal expenses. And even more, for the poor person who is barely making ends meet, the stress of tithing is much more pressing than that of the rich person. Remember, under consecration, when you donate all your surplus, the poor have no surplus, and so they are not required to give. And under early Mormon tithing, the poor have no interest (which was then defined as surplus) and so also gave nothing and is was not counted against them. How then, in the modern Mormon tithing system, are the poor being required to sacrifice more than the rich?


Here’s another way to look at it on a chart:


It’s not hard to see how this system unfairly burdens the poor. It is reminiscent of the scripture in [9]Mormon that warns against such behavior in the Last Days:

15 What mean ye that ye abeat my people to pieces, and grind the faces of the poor? saith the Lord God of hosts . . .
36 And I know that ye do walk in the pride of your hearts; and there are none save a few only who do not lift themselves up in the pride of their hearts, unto the wearing of very fine apparel, unto envying, and strifes, and malice, and persecutions, and all manner of iniquities; and your churches, yea, even every one, have become polluted because of the pride of your hearts.
37 For behold, ye do love money, and your substance, and your fine apparel, and the adorning of your churches, more than ye love the poor and the needy, the sick and the afflicted.

And the churches (and temples) of Mormonism are very well adorned, paid by the storehouse of tithes, the price of non-payment of tithing being denied entrance into these edifices, a sign of full fellowship and exaltation.


The handling of tithes is one thing as pertaining to its income stream. The other is how the Church has managed to entangle itself with corporate concerns, as well as making its financial practices secret. D. Michael Quinn has recently released a history of this practice, dubbed [10]The Mormon Hierarchy, Corporate Wealth and Power to illuminate just how entangled the Church is with business. While this book reads like a business ledger, one gets the un-enthralling prospect that the Church’s leaders spend much more time on corporate affairs then they do on spiritual ones. One first looks at Joseph Smith, who was a very poor business manager, and moved money from personal to church coffers as they were one in the same. Yet, while Joseph seemed to have some ethics in terms of his personal use, probably to the detriment of his own family, Brigham Young had no such scruples as trustee-in-trust. He mingled church and personal loans for lavish living that made him for a time the richest man west of the Mississippi (Quinn). Both men today would be jailed for embezzlement. It was because of his opulence that the Church thankfully, created a separation between authorities’ personal finances and that of the Church’s trustee-in-trust. Now the Brethren get a [11]stiped for their services at the highest level (around $100,000 annually for the Twelve, and $250,000 for the First Presidency, $400,000 for the prophet or trustee), which while modest in terms of compatriots in other denominations, still suffers from the definition of priest craft, where they labor not with their own hands. They also receive other non-compensatory benefits like housing and travel allowances and free tuition at church institutions for their family members.


The history of Mormon corporate behavior also showcases a large effort made to run and manage industries and ensure family dynasties thrive within those industries as well as church leadership. For a time in Utah, this was a self-sustaining economy. The justification comes from the early definition of the spiritual and temporal being one and the same. And since there were efforts for Mormons to self-manage their own empire, this was understandable but distracting from their larger gospel mission. At the turn of the century, it was not unheard of for one Apostle to be managing three industries either as board chair or chairman of the board for sugar or iron or some other manufacturing industry.


While chairmanships have largely abated due to the globalization of many of these industries, Mormon authorities still sit on boards of related insurance, media, and publication businesses (Beneficial, Bonneville Communications, and Deseret News) who have managing partners that ensure Church interests are met, or that these businesses continue to be held as subsidiaries of the Corporation of the President. So, while individual earlier enterprises have been largely abandoned, the Church itself has been growing its own balance sheet and acquiring capital at a rapid pace. This includes the purchasing and development of retail shopping centers, as well as massive real estate enterprises in [12]Pennsylvania and [13]Florida.



It may be that the Church is diversifying its income streams due to falling tithing revenue, or so that they can temper their draconian definition of tithing in the future. For many, they see tithing, or any Church asset, as poorly managed if being invested in real estate or they have moral problems with those investments, such as pharmaceuticals, or luxury retail chains, or as it was rumored, to have been invested heavily in the build-up of the [14]Las Vegas strip in the 1950’s. Should not tithes be locked away from such things? Even if claims that these investments are in a lockbox from today’s tithing revenues, it would be surprising that there would be such a lockbox, as tithing receipts have recently been changed to indicate that the Church can do whatever it wants with those donations. Indeed, the Parable of the Talents would indicate that all are the Lord’s regardless of the initial investment.


While records have leaked out to indicate how the Church is using its funds, such as the recent [15]IRS whistle-blower indications that they are hoarding over $100 Billion in wealth, is there a reason that church members need to know or approve of church funds usage?



According to the D&C, yes there is. [16]D&C 104: 71 states in relation to tithing or treasuries of the Church:

71 And there shall not any part of it be used, or taken out of the treasury, only by the voice and common consent of the order.

This was the order of things. It used to be that every conference, a disposition of funds was given where the people had an opportunity to vote up or down on the usage of such funds, by common consent. Early on, this was not always a given. The Saints turned down a living allowance for the First Presidency in Navuoo, for example. There was at first, a large part involved with common consent, as a check against excesses in the use of the church treasury. That all changed in [17]1959. It was after that conference, where a large deficit was revealed, that the Church quietly put the tithing disposition reports to rest, in violation of the commandment in the D&C. No revelation has been provided to supplant that report. We do get an internal audit review that sort of meets that requirement, but that audit is really meant to ensure fraud is not occurring according to internal definitions. The Church can use the funds any way they want, and you don’t get to know how they are used. You simply need to trust that they are being used wisely. It is interesting to note that since the radio silence on tithing disposition, the Church’s financial power seems to have increased by leaps and bounds.


So, what does one do if they feel tithes are being [18]mishandled? One way is to simply donate and forget about the outcome. If one believes the Church is the Lord’s, then they send the money and forget about the results, this is a way to go. The other option is to donate with reservations, either expressing concern to your leaders or at least to God about the use of those funds. Perhaps you donate but give all your tithe to fast offering as its purpose is to help the poor. Or maybe you tithe on your own to the poor and needy you know without having it go through the institutional church. Any of these options are available and appropriate as one goes to God for instruction. There is no commandment in scripture that one must give tithes to a church. There IS a commandment to help the poor, both in the Book of Mormon, and the Bible.


But what about [19]Malachi? Aren’t we told we will burn if we don’t pay tithes (ostensibly to the priests?) Aren’t we promised blessings, and “gross” blessings if we take a liberal interpretation of tithes?

8 Will a man rob God? Yet ye have robbed me. But ye say, Wherein have we robbed thee? In tithes and offerings.
9 Ye are cursed with a curse: for ye have robbed me, even this whole nation.
10 Bring ye all the tithes into the storehouse, that there may be meat in mine house, and prove me now herewith, saith the Lord of hosts, if I will not open you the windows of heaven, and pour you out a blessing, that there shall not be room enough to receive it.

It is helpful to understand the entire scope of the Malachi and the audience for that book. Malachi lived in the 4th and 5th Century BC, at a time when the Jews had returned to Jerusalem, rebuilt the temple, and were glutting themselves upon the backs of the people. Malachi’s warning was primarily to the priestly class, as was most of the Old Testament prophets, in their mishandling of sacred funds. It’s not just that the tithe payer robs God, but that those that are anointed to handle the funds, priesthood leaders, are robbing God in how they mishandle those funds. The commandment is to put the tithes back in the storehouse, that there may be food, which is used for helping the poor. It’s our service and offerings to the poor, both from individuals, and those with stewardships to those individuals, that brings the blessings of heaven.


Those are the “gross” blessings promised, a prophecy of Zion.


[1] https://en.wikipedia.org/wiki/Law_of_consecration [2] TRIAL OF THE FAR WEST PRESIDENCY OF THE CHURCH Minutes of the proceedings of the Committee of the whole Church in Zion. in General Assembly at the following places, to-wit: At Far West February 5, 1838 [3] https://www.churchofjesuschrist.org/manual/doctrine-and-covenants-student-manual/section-119-the-law-of-tithing?lang=eng [4] http://mormonhistoricsites.org/wp-content/uploads/2014/03/Reexamining-Lorenzo-Snows-1899-Tithing-Revelation.pdf [5] https://contentdm.lib.byu.edu/digital/collection/EoM/id/3726 [6] https://newsroom.churchofjesuschrist.org/article/tithing [7] https://www.mbsinc.com/tithing-considerations-for-business-owners/ [8] https://www.forbes.com/sites/kaipetainen/2012/01/24/what-romneys-tax-forms-can-teach-us-and-mormons-about-tithing/#6e0a90746d49 [9] https://www.churchofjesuschrist.org/study/scriptures/bofm/morm/8?lang=eng [10] https://www.amazon.com/dp/B074PFF3W7/ref=dp-kindle-redirect?_encoding=UTF8&btkr=1 [11] https://kutv.com/news/local/mormonleaks-web-page-posts-information-about-living-allowance-of-lds-general-authorities [12] https://www.bizjournals.com/philadelphia/blog/real-estate/2014/02/mormon-church-to-build-32-story.html [13] https://www.theguardian.com/cities/2017/jan/30/from-book-to-boom-how-the-mormons-plan-a-city-for-500000-in-florida [14] https://en.wikipedia.org/wiki/History_of_Las_Vegas [15] https://www.wsj.com/articles/the-mormon-church-amassed-100-billion-it-was-the-best-kept-secret-in-the-investment-world-11581138011 [16] https://www.churchofjesuschrist.org/study/scriptures/dc-testament/dc/104?lang=eng [17] https://en.wikipedia.org/wiki/Council_on_the_Disposition_of_the_Tithes [18] http://puremormonism.blogspot.com/2012/12/are-we-paying-too-much-tithing.html [19] https://www.churchofjesuschrist.org/study/scriptures/ot/mal/3?lang=eng

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