Behind the Latter-day Saint church's vast wealth are two centuries of financial hits and misses
Published in Business News
During the first weekend of April 2023, the Church of Jesus Christ of Latter-day Saints will hold its semiannual General Conference in Salt Lake City. Tens of thousands of members will attend in person, with millions watching from home.
Over two days, Latter-day Saints – often called “Mormons” – will hear an array of talks from religious leadership. But another speaker will likely be a member of the church’s auditing department, who, if he follows tradition, will state that the institution’s financial activities from the past year were “administered in accordance with Church-approved budgets, accounting practices, and policies.” No further specifics are typically provided.
This yearly ritual may seem striking in the face of the church’s February 2023 agreement to pay a US$5 million fine in a settlement with the U.S. Securities and Exchange Commission. According to its press release, the SEC concluded that the church went to “great lengths” to “obscure” its investment portfolio. A church statement expressed “regret” that its leaders had followed faulty legal counsel and insisted that the fine would be paid through “investment returns” rather than members’ donations.
The settlement came on the heels of other controversies about the church’s taxes and financial portfolio, which journalists and whistleblowers have estimated at around $100 billion.
These revelations have raised questions concerning the ethics of a religious organization amassing such a large amount of wealth, and how it is balanced with charitable giving. But headlines often overlook the long and surprising history of the modern church’s financial success – as well as the continued anxiety surrounding its economic reserves.
Mormonism was born through the spiritual quest of Joseph Smith, who was raised amid America’s Second Great Awakening during the early 1800s, a period of Christian revivals. His parents were religious seekers who struggled to find a fulfilling church, and tussled with the young country’s financial turbulence. Smith’s father had lost savings in an ill-fated ginseng deal, plunging the family into two decades of poverty.
It is no surprise, then, that when Smith formed his own church, its teachings included a sharp critique of the capitalist system. Early converts to what was originally called the Church of Christ, organized in 1830, were encouraged to consecrate all their goods to their new religious community so it could redistribute resources to those in need.
It was one of many communal experiments Americans attempted during the antebellum period as religious innovators offered alternatives to what they believed was a dangerous and uncaring economic system. Smith’s earliest revelations denounced individualism and urged believers to share their property and resources with one another.
Yet financial difficulties, personal clashes and other challenges doomed the experiment from the start. Within just a few years, the new church’s leaders had already abandoned the consecration ideal. In its stead, Smith directed members to donate “surplus property” to help pay off the group’s immediate debts and then to donate “one tenth of all their interests annually.” This commandment commenced a practice of tithing that still exists today, though it has been interpreted in different ways over the years.
Over the first two decades of the church’s existence, the Latter-day Saints had to relocate their headquarters multiple times – including seven years in Nauvoo, Illinois, a focus of my historical research. By the time the Saints reached Utah’s Great Salt Lake in 1847, leaders and members alike largely embraced the economic system that Smith had previously decried.