Hey guys, so The Church of Jesus Christ of Latter-day Saints today is known as a financially well-off organization. But it hasn’t always been that way. There are a lot of different things we could talk about within the realm of Church finance, but in this episode, we’re just going to start with a bird’s eye view of the Church’s financial status over the decades. Let’s do it.
Alright, so the fact of the matter is that for many decades, the Church’s financial story is one of deep, soul-crushing debt. In the 1830s leaders attempted to resolve financial problems by organizing the Kirtland Safety Society, which we’re not going to talk much about because we’ve already done an episode on that topic. Needless to say, the KSS failed miserably, and the situation was only worsened by the 1838 financial crisis that swept the country at the time.
Fast forward to the mid-1800s. Joseph Smith is killed, the Saints are kicked out of Nauvoo, and Brigham Young leads them West to Utah Territory. Despite extreme privations and the challenges associated with rebuilding your community from the ground up, the Church scraped by. But there was trouble on the horizon:
“The  depression paralyzed the Church. By late June, cash donations had almost ceased. On July 1 the Church failed to meet its payroll … Appropriations for Church education were halted, twenty schools were closed, and the opening of the new Church University in Salt Lake City was postponed indefinitely. Clerks struggled to pay even the low-priced fares of returning missionaries and sometimes failed. ‘Every day urgent demands for cash are made of us, which we cannot meet,’ wrote the First Presidency, ‘for the simple reason that we have no money. . . . We never saw such a time of financial stringency as there is now.’”
Desperate, the Church sent a representative to New York to look for loans. Quite miraculously, that representative was successful and brought the Church back from the brink (and I mean the brink) of financial ruin. The man’s name was Heber J. Grant.
But the Church’s financial struggles were not over. Multiple contributing factors, such as a series of bad investments and the confiscation of Church property under the Edmunds-Tucker Acts meant that “The Church debt by 1899 had skyrocketed to between one and two million dollars, undermining the entire financial structure of the Church.” The Church’s main source of support, as is the case today, was tithing funds. One scholar estimated that between 1890 and 1898, an average of only 15.9 percent of Latter-day Saints were paying at least some tithing. In 1899, then-President Lorenzo Snow hit the subject of tithing hard, raising the percentage for that year to 25.6. And by 1907 President Joseph F. Smith was finally able to announce that the Church was officially out of debt. But while getting out of debt was obviously a huge step, the Church wasn’t out of the wringer yet.
Soon the dark cloud of the Great Depression loomed over Utah, as it did the rest of the country. “In 1932 unemployment in Utah reached 35.9 percent, and per capita income fell by 48.6 percent.” Despite deficit spending in the late 1930s, the Church made it through the Great Depression, and J Reuben Clark set out to build a stronger reserve fund.
Regarding the Church’s financial decisions, President Clark said in the April 1940 General Conference, “We, the Authorities of the Church must … be extremely careful as to our commitments …. We are not infallible in our judgment, and we err, but our constant prayer is that the Lord will guide us in our decisions….”
The detailed financial report the Church had grown accustomed to presenting annually at general conference ended after 1959 in the wake of more deficit spending, largely on building projects. By the early 1960s, whatever reserve the Church had built up was gone, much to the chagrin of some leaders, like Harold B. Lee.
And then, in 1962, N. Eldon Tanner was called to the Quorum of the Twelve, and to the First Presidency just a year later. “President Tanner took the scattered budgeting of the Church and brought it into correlation. His strong influence in implementing a more exacting corporate finance model to Church headquarters during his tenure cannot be overstated.”
“N. Eldon Tanner rescued the Church from a cash-flow crisis in 1963. Within two decades he established LDS headquarters as a financial powerhouse, with significant annual income from both its investments and businesses.”
Now, when it comes to Church finances, people have strong opinions. Some people are elated with the Church’s success and substantial financial reserves. Others feel the Church should be doing more with the money they have or should be managing things differently. When it comes to money, there will always be opposing opinions. And everyone is entitled to those opinions. I try not to be dogmatic in my views simply because I don’t have the full picture of the Church’s financial assets and obligations. Can those in financial leadership make bad decisions? Yes. Reuben J. Clark was clear on that. Do I think I could do any better? Not a chance.
And just to offer some perspective, as we look at the arc of the Church’s financial situation over the decades — success is relatively recent. Late Church presidents Thomas S. Monson and Gordon B. Hinckley were both in the Quorum of the Twelve in 1963, “just as the Church was struggling to avoid the worst financial crisis of its history.” The current president, Russell M. Nelson, was born in 1924. In institutional memory, hard financial times weren’t all that long ago. Perhaps that perspective provides some context for the policies currently in place.
Now, this episode has been quite broad and admittedly simplified — but there’s still a lot to talk about. For example, people have lots of questions about the business and investment side of Church finances, which we’ll talk about in the next episode. In the meantime, check out the links in the YouTube description, watch some of our videos while you’re here, and have a great day.
- “Church Finances and a Growing Global Faith” news release from the Church (fantastic Q&A format that offers a good review of Church finances): https://bit.ly/3Ix3RhV
- “Crisis in Zion: Heber J. Grant and the Panic of 1983” via BYU Studies: https://bit.ly/3GeJzc8
- “LDS Church Finances from the 1830s to the 1990s” by D. Michael Quinn: https://bit.ly/32bpFQp
- “Church Finances — Commercial Businesses” via the Church’s website: https://bit.ly/3q9JUXZ
- “The Church and Its Financial Independence” via the Church’s newsroom: https://bit.ly/3f5eYBU
- “Tithing” via the Church’s website (Gospel Topics essays): https://bit.ly/3GflPoi
- Lorenzo Snow’s famous talk on tithing (Part 1, Millennial Star): https://bit.ly/3rnBR9x
- Lorenzo Snow’s famous talk on tithing (Part 2, Millennial Star): https://bit.ly/3GefSIh
- “N. Eldon Tanner and Church Administration” by John P. Livingstone (BYU Studies): https://bit.ly/34HfOTg
- “The State of the Church” by Gordon B. Hinckley (April 1991 GC): https://bit.ly/33AC7K3
- “Finances of the Church” via Encyclopedia of Mormonism: https://bit.ly/33nI6lr
- “Business: Church Participation in Business” via Encyclopedia of Mormonism: https://bit.ly/3rQKLfM
- “A History of LDS Temple Admission Standards” by Edward Kimball (Journal of Mormon History): https://bit.ly/3teoJWs
- The diary of James Talmage, which speaks to some of the financial distress of (Aug. 23) 1893: https://bit.ly/3f6U99h
- “‘The Lord’s Way’ The Genesis of the Church Security Plan, 1920-36” by Joseph F. Darowski: https://bit.ly/3GfVG8Q
- “Business and Religion” 2018 BYU Church History Symposium book, available online: https://bit.ly/3qmyuQM
- “The Church During the Great Depression” via the Church’s website: https://bit.ly/3FsqulC
- “The Development of the Council on the Disposition of the Tithes” by David Smith (BYU Studies): https://bit.ly/34HVn8M
- “LDS Church Real-Estate Holdings Include Farms, Ranches, Buildings” by Deseret News: https://bit.ly/3Fs0sif
- “Historian digs into the hidden world of Mormon finances, shows how church went from losing money to making money — lots of it” via The Salt Lake Tribune: https://bit.ly/356LD8x
- “How the Church of Jesus Christ Uses Tithes and Donations” via the Church’s newsroom: https://bit.ly/34Q6ZGP
- “Church responds to allegations made by a former employee in IRS complaint” via Deseret News: https://bit.ly/3Ijjc5c
- “$100 Billion In Mormon Till Does Not Merit IRS Attention” via Forbes: https://bit.ly/3tDR20M
- A video from the Church about their Florida ranch: https://bit.ly/3nrWfVs
- “Statistical and Financial Report” 1959 Conference Report (for 1958): https://bit.ly/3fAG3Nr
- “Statistical and Financial Report” 1957 Conference Report (for 1956): https://bit.ly/3FEBsnW
- “Financial Statement” 1928 Conference Report (for 1927): https://bit.ly/3AoudzP
- “Auditing Committee’s Report” 1906 Conference Report (for 1905): https://bit.ly/3fAQTmH
- List of Conference Report links: https://bit.ly/3AbMgsF
- If you want to dive really deep into this topic, you may be interested in D. Michael Quinn’s book, “The Mormon Hierarchy: Wealth and Corporate Power”.