The Fascinating Finances of Mega Churches

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Edited By: Andrew Gonzales

Music Courtesy of: Epidemic Sound

Select Footage Courtesy of: Getty Images

All materials in these videos are for educational purposes only and fall within the guidelines of fair use. No copyright infringement intended. This video does not provide investment or financial advice of any kind.

#business #finance #howmoneyworks
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The church of Jesus Christ of Latter-Day Saints commonly known as the Mormon Church is one of the world biggest hedge funds involved in shady business deals and opaque corporate practices. Last month the Securities and Exchange Commission (an organization normally tasked with stopping insider trading and stock manipulation) fined the Mormon church 5 million dollars for a failure to report stock holdings that they had intentionally spread out over 13 different shell companies to avoid disclosing the churches investments. If it sounds ridiculous that a church would be charged for some of the same crimes as the biggest corporate frauds in history, then sit back because it get’s a lot worse.

The Mormon Church collects 10% of their members income as tithes that are tax deductible. That means if a Latter-Day Saint pays a 30% marginal rate on a one hundred thousand dollar income, they automatically give ten thousand dollars to the church every year. seven thousand dollars of that donation would have ended up in their bank account, but three thousand dollars would have gone to the IRS. That means that tight fisted Uncle Sam is effectively subsidising 30% of the church’s income.

The church is not obligated to report how much it brings in every year, but a joint analysis conducted by Reuters and University of Tampa Sociologist Ryan Cragun estimates that the number is at least seven BILLION dollars annually in tithes and other donations made by their members. Some of that money is used to fund the churches religious activities like paying salaries to priests, some of the money is spent on maintaining church facilities and some is spent on programs to help the community but the Mormon Church Consistently has a lot of money left over.

The excess money the church saves every year is funnelled into a trust which is managed by the Corporation of the President of the Church of Jesus Christ of Latter-Day Saints. The President is both the cultural and managerial leader of the church and controls the company that controls the trust that controls the churches extra money. The holding company directly owns an educational division including Bringham Young University, a think tank called the intellectual reserve and the Polynesian cultural center which is a LDS controlled tourist destination in Hawaii that was built with the intention to provide employment and scholarships to Mormon students attending the nearby Mormon owned university.

The last major asset owned by the Corporation of the President of the Church of Jesus Christ of Latter-Day Saints is yet another holding company, that is the Corporation of the Presiding Bishop of the Church of Jesus Christ of Latter-Day Saints. The presiding bishop is kind of like the Darth Vader if the president was Palpatine, both very powerful and wield immense authority in the church, but the bishop still answers to the president and it a little more hands on in the day-to-day affairs of the church. The holding company owned by a holding company also owns another holding company called the Deseret Management Corporation which is their private equity division. The Deseret Management Corporation owns several for-profit companies outright including beneficial financial group (which is an insurance, investment and retirement services company), Bonneville International Corporation (which owns radio station nation wide) and Utah Property Management Associates which is a real estate company that manages apartments and commercial properties.

So it’s time to learn How Money Works to find out how the finances of mega churches really work.

[leandervr]

I'm not religious and I don't believe in demonic possession, but Kenneth Copeland would be the first human I could believe to be possessed. Looking into his eyes gives me the shivers.

[cuatro]

As a religious Christian, we have failed to deal with this corruption and rot in our own house.

[RkandrewsNYU]

I think you mean Mel Gibson's Church of the Holy Family. Though admittedly the idea of Mel Brooks making Passion of the Christ is super funny

[moneysins]

The Church of Latter Day Saints knew to spread money between 13 shell companies to avoid the $100M reporting limit yet a ton of rich people didn’t bother to open multiple bank accounts to say under the $250K FDIC threshold

[Josh-Moody]

As a long-time viewer and member of The Church of Jesus Christ of Latter-day Saints, here's a couple of my thoughts on the video:
- The video is incorrect in saying that some of the church's money goes to paying priests. All positions in the church are volunteer and unpaid (including bishops, which are the equivalent of priests in other churches). The only exception is that the highest leaders in the church get living stipends because they are expected to give up their job and serve in the church full time. But these stipends are not making them rich.
- The church spends about 1 billion dollars a year on charity and another 1 billion on subsidizing education. As a student at Brigham Young University, these subsidies were a huge part of funding my college education. I'm extremely grateful for it and am determined to pay it forward when I can.
- The church is careful not to overspend its reserves because there are a large number of people who depend on the church for financial assistance, and the church would rather err on the side of having too many reserves than too few. The church almost went bankrupt last century and ever since, the church has been very financially conservative to avoid this happening again.
- With the exception of the error mentioned above and the obviously-mudslinging analogy of Palpatine and Darth Vader, I was impressed with the objectivity of this video. Personally, the church's large amounts of wealth don't bother me at all. If anything, it gives me more assurance that the church is genuinely being led by an actual God who wants His church to stick around for the rest of eternity while blessing the maximum number of people.
Just a few of my thoughts!

[mattm]

The church's mission = make the church

[denniss]

You should look at the financial practices of American universities, Harvard would be a good start

[thejanitor]

Okay, uh, quick thing - Mel Brooks is not the guy who runs A.P. Reilly and donates to the Kardashians. He is also not the director for Passion of the Christ. Mel Gibson is the one you're thinking of.

I re-watched that segment over and over to see if there was a joke I was missing because they're both named Mel, but if there is, it's so deadpan its going over my head.

[notaword]

Honestly, I love the format of this, "Here's all the ways you could be incredibly, stupidly wealthy. Just know you're a monster if you do ;]"

[natenelson]

I'm a current member of the church, and I feel, like some others have, the need to clarify some points. The only "paid" clergy positions are ones that are expected to drop any employment in order to serve constantly, and those are known to receive a healthy, but not excessive, stipend. This includes top leadership, most of whom were very well off financially before their service.
The existence of the funds are, to us, an implementation of the principles of self-reliance and good financial decision-making that we are taught as members. I personally don't agree with the lack of transparency provided by the church surrounding finances, but if the intentions were good, then I understand why they made the decisions they did. I chose to believe what I do while being aware of this shadiness, and I look forward to what further investigation will uncover. If there was any malintent, I hope it is rooted out and justice is served. I hope this helps explain my perspective.

[badluck]

In Houston, we joke the moral that mega preacher Joel Osteen got from the story of Noah is that Osteen needs a giant yacht.

[ConnorSmith-lhuw]

I’m a long time subscriber to the channel and a faithful member of the Church of Jesus Christ of Latter Day Saints, so I feel like I ought to offer my perspective here. What people forget is that we’ve spent the majority of our history flat broke or in serious debt. It wasn’t until the 1960’s that we finally got our financial act together. That was when a few leaders of the church who were former businessmen reorganized the Church’s budget and assets and got us out of debt. Unfortunately, they did their job a little too well and now the Church is ridiculously wealthy after decades of setting aside a little bit out of their yearly budget. Exponential growth over years and years tends to do that. As this video demonstrates, that fact is a bit embarrassing to us, even though we didn’t do anything wrong to get that money. I can understand why the Church would want to hide it (mostly because it associates us with people like Kenneth Copeland), though I think their plan to hide it was a dumb idea. What they did was illegal, and I think this serves as an excellent demonstration of why we believe in following the law. No one ever said we were perfect, and frankly sometimes people need to learn from their mistakes (I know I have).

As for myself, I continue to pay tithing because I believe it’s a commandment from God. However, since many people have different beliefs or don’t even believe in God at all, I won’t try to convince you of the spiritual benefits. Instead I’ll outline some of the financial benefits of being in the Church, so that nobody walks away thinking that my Church is scamming people. For example, did you know that we help our members out with their bills and living expenses? I’m a clerk in my local congregation, and we had a regular audit a few weeks ago. I happen to know that a very large chunk of the congregation’s budget is spent on things like helping our needy members out with groceries, rent, medical expenses, and so on. I know that if I ever need financial help, I can always go to my pastor and ask. If I ever lost my job, I could go to LDS Employment services and get their help in finding a new one. If I want to go to college, I can go to BYU at a heavily discounted price (and I have). I remember watching the video on getting married a little while ago and thinking about how my wedding cost me barely anything because the venue was provided free of charge for both the wedding itself and the reception.

To be clear, I don’t think anyone should join the Church for the financial benefits, but I do think that having that lifelong safety net for me and my family is well worth what I pay in tithing, even if you ignore other, less tangible benefits.

[ethanstump]

As a former Mormon, this is ultimately what lead to me leaving. I had a lot of misgivings myself, and had doubts, but what inflamed my sense of betrayal, was understanding that loyalty goes both ways, and why be loyal to a church that clearly is a corporation in a trench coat.

[yorgasor]

A couple corrections, the shell companies did NOT keep the value under $100M to avoid 13F filings. When you have $37B, you'd end up with hundreds of shell companies to do that. Instead, they were kept between $2-4B, but the shell companies claimed that they were independent companies, given names and addresses far from Utah so it couldn't be tied back to the church, and managed by people with common names so they couldn't be traced back to church members. The key problem with the SEC is that the were NOT independent companies, managing things on their own. They were all managed by Ensign Peak.

Also, the LDS church didn't apologize. The second in command is famous for declaring that the church doesn't give apologies. Instead, their press release said that they regret that mistakes were made, and pawned as much of the blame as possible on lawyers who gave them legal counsel.

[jtgd]

“What if we get 20, 000 people to donate 20 dollars weekly? That’s 1.6 million a month!”

[ewanmorkel]

Good video overall. You egregiously oversimplified when it comes to the deductibility of tithes. Most people who pay tithing cannot deduct it because the standard deduction still exceeds their total amount of itemized deductions. Tax law still incentivizes donations to churches and charitable organizations, just not to the extent that this video depicts.

[christianjuarez]

The Mormon church quite famously has an all volunteer clergy. No one makes a salary to lead a congregation. Whether that makes it better or worse, you decide, but it’s quite blatantly factually incorrect. They do employ other people in administrative roles though.

[bigreaderpike]

Correction the church of Jesus Christ of latter they saints is a layman church and does not pay It's Priests. Work of missionary, priest and other religious activities is voluntary. Thier are positions hired for specific duties like accountant and other work but never the priesthood itself. As missionaries we try to save up money for our missions as well. Please do research before saying something like that.

[stefanlehnardt]

I have consistently enjoyed the videos from this channel, but the multiple inaccuracies and misrepresentations in this video have me worried that the videos in this channel are carelessly researched. I recommend Economics Explained for a similar, but better-researched alternative.

[jfitz]

As a Pastor, the stories of church leaders spiritually abusing parishioners to extort them makes me want to cry. I see it happen far too often…