The actual "church" that Joseph Smith established back in 1830 no longer exists as such. What we think of as "The Church of Jesus Christ of Latter-day Saints" (hereafter referred to as "The Church™"), exists today as a trademark, owned by a subsidiary of a corporation known as "The Corporation of the President of The Church of Jesus Christ of Latter-day Saints".
So technically, there are no members of "The Church™", despite the common usage whereby people call themselves members. The actual church that used to go by that name, and which claims Jesus Christ as its head, does not exist today in any legally recognised form.
But, I'm getting ahead of myself. Let's look at the history...
An economic history of this organisation:
In 1830, the Church of Christ was established by Joseph Smith. This original church underwent several name changes during the 1830's, including the Church of the Latter Day Saints (1834) and the Church of Jesus Christ of Latter Day Saints (April 1838).
In 1851, Brigham Young, by legislation of the State of Deseret, incorporated what then became known as "The Church of Jesus Christ of Latter-day Saints" (adding a hyphen and lower case 'd'). Over the next 40 years, the church's leadership embarked on many money making enterprises:
In 1870, Brigham Young publicly announced a revelation for Mormons to invest in a railroad. In 1881, John Taylor privately dictated a revelation to organise an iron company.
In 1883, John Taylor dictated another revelation to invest tithing funds in a gold mine.
In the 1890's the hierarchy gave various men the religious 'callings' or obligation to invest thousands of dollars each in a sugar company.
By this time, the Twelve Apostles were now much too busy to to go forth throughout the world and spread the gospel message of Christ - their original divine mandate. Instead, they needed to stay home and spend all their time managing literally hundreds of church owned businesses. These leaders were partners, officers or directors in more than 900 Utah-area businesses. They owned wool mills, cotton factories, 500 local co-ops, 150 stores and 200 miles of rail-road. Not content with just running these enterprises, when occasionally faced with competition, they insisted that church members patronise LDS-owned businesses. It was virtually impossible by this time to find where the division lay between ecclesiastical and monetary interests.
This focus on the financial over the spiritual was starting to take its toll on the church. According to Brigham Young, Jnr, it had all gone too far: “There is too much time given to corporations, stocks, bonds, policies, etc. by our leaders to please me,” he wrote in his diary, “We are in all kinds of business interests. Even the members of the Twelve represent businesses which are jealous of each other and almost ready to fight each other.” (Michael D. Quinn: Mormon Hierarchy - Extensions of Power [1])
Eventually this theocratic control over politics, economics, and resources in the west became too much for the U.S. Congress. In 1887 it passed the Edmunds-Tucker Act. This act disincorporated the LDS Church on the grounds that it fostered polygamy and gave the federal government power to confiscate all church assets, including the Salt Lake temple and all of Temple Square.
The provisions of this Act were later upheld in the 1890 Supreme Court ruling Late Corporation of the Church of Jesus Christ of Latter-Day Saints v. United States, when the U.S. government went ahead and confiscated LDS Church property, including tithing money donated by members (real estate such as churches and temples was never seized, though the Edmund-Tucker act allowed for such seizures), and The Church of Jesus Christ of Latter-day Saints, as a legal entity, simply ceased to exist.
Additionally, the LDS Church had borrowed extensively to finance a variety of infrastructural developments (e.g. gristmills) and after the 1893 financial crisis the LDS Church was unable to make timely payments on their loans; Wilford Woodruff, Church President from 1889-1898, privately expressed doubt that the church would ever pay its debts.
By 1898, when Lorenzo Snow took over as Church president, the church was $2.3 million in debt. So President Snow re-emphasised the payment of tithing (giving 10% of one's income to the church) - previous to this, tithing was paid in goods and was not enforced. Additionally, the Mormon leaders offered up the future tithes of the Mormon people as guarantees against their investments. Thus the members of what used to be The Church of Jesus Christ of Latter-day Saints became the main source of primary income. In addition, the LDS Church issued bonds backed by the labour of Utah residents.
Around 1900, the office of Trustee-in-Trust was reformed.
As a result of the changes made by President Snow, by 1907 the church was completely out of debt and since then has not used debt to fund its operations, even for capital projects. e.g. the recent $2 billion City Creek Mall project (some estimate -> $5 billion) was fully funded without any borrowings or capital venture.
To protect it's fast growing financial interests, the church then organised several tax-exempt corporations to assist with the transfer of money and capital. These include the Corporation of the Presiding Bishop of The Church of Jesus Christ of Latter-day Saints, organised in 1916 under the laws of the state of Utah to acquire, hold, and dispose of real property.
At this point we need to ask...
What exactly is a "corporation"?
A corporation is an organisation chartered by the state and is given many legal rights separate from its owners.
"A corporation is a creature of the state...It receives certain special privileges and franchises and holds them subject to the laws of the state and the limitation of its charter. Its powers are limited by law. It can make no contract not authorized by its charter. Its rights to act as a corporation are only preserved to it so long as it obeys the laws of its creation. There is a reserved right in the legislature to investigate its contracts and ascertain if it has exceeded its powers" (Hale v. Henkel, 201 U.S. 43)
"Corporate existence is a privilege granted by the sovereign upon compliance with specified conditions." (Smith and Roberson's Business Law)This poses a problem for a church that is considering to incorporate, because in the church, Jesus Christ is supposed to be the sovereign. When application is made to incorporate a church, the will of Jesus Christ becomes subordinate to the will of the state. "To become a corporation in effect divorces the church from Christ." [2] In other words, a church that incorporates no longer can claim separation from state.
In America, churches automatically operate in a sphere separate from the state. Governments have no jurisdiction in the church whatsoever. There is no tax advantage for a church to incorporate, as some mistakenly believe. But there is if that church actually wants to operate as a business. Then it can trade its sovereignty in exchange for special privileges granted by the government.
So in 1923, after the church lawyers found a rare, little known, and hardly ever used mode of incorporation known as The Corporation Sole, the President of what used to be the LDS church incorporated the "Corporation of the President of The Church of Jesus Christ of Latter-day Saints" in Utah to receive and manage money and church donations.
Under this corporation sole, all financial power was vested in one man, the prophet, or as he was named in the corporate charter, “the President” of the church (the word “Prophet” doesn't appear anywhere in the charter - this is now a corporation, not a church).
The president of this corporation could do whatever he wanted with the member's money without asking permission from the members whatsoever. This president needs no authorisation from any mere member of the Lord's church. No show of hands, no vote, no “all in favour please manifest.”
Succession
Also written into the charter of the Corporation of the President as amended was how the line of succession was to operate within the church. In order for there to be no question as to who held the purse strings following the death of the President (the “Sole” in a ”Sole Corporation”), the Senior Apostle automatically becomes the next president of the Corporation.[3]
Wait a minute...what??? I always thought growing up, that the next "Prophet" could be any of the Quorum of the Twelve, and it had nothing to do with who was in the most senior spot. So if God (for some reason) did not want the most senior (longest serving) apostle to become the next prophet, e.g. Boyd K Packer at the time of writing, He could technically "inspire" the entire Quorum to sustain ('vote') in another.
Wrong! The line of succession is outlined in the state approved charter - the longest called living apostle (President of the Quorum of the Twelve Apostles) will ALWAYS become the President of the church upon his predecessor's death. God's will isn't mentioned anywhere in it.
So while the process of "by common consent" revealed in D&C 26:2 is a well known principle, it is also a legal process written into the Constitution of the Corporation of the church. The rules for succession of the president of the church are also written into this Constitution [4].
So, this "church" is really a corporation. It is chartered as a corporation, and it behaves like a corporation. Before they were called to their positions of leadership within "The Church™", most of the 1st Presidency & the Twelve Apostles (directors) made their livings as lawyers and businessmen in the corporate world. They are in these positions because the talents and skills they developed on the outside are needed on the inside.
When each of them get called to serve in this corporation, even though they believe it is ecclesiastical in nature, they would soon learned that things are run here very much the way things were run in the corporate world they left.
Thus, the areas that the corporate Church tends to focus on are, by and large, the same things any corporation lends its attention to: Growth, Image, and Control.
Especially damage control to its image. Notice that in the early LDS church, the spokesman for the church was called a Prophet. Today the press is continually quoting a “church spokesman” who turns out to be someone from the Public Relations department.
Also note that in "The Church™" today, members can be called to Public Relations "callings", specifically to "grease the wheels" - i.e. to promote the good name of "The Church™" to those in power within the community - namely politicians, other corporations, social groups etc, and to sway political favour on issues such as building projects (Temples, malls, etc).
That is just how a corporation works. It is not what most people would expect from a church that claims Jesus Christ as its head. If Jesus Christ was the head of this church, He would have His spokesman speak for His church, not some flunky from the PR department whose job it is to act as a buffer to protect the prophet from potential embarrassment.
Funding
January 1st 1990 was the day "The Church™" dropped all pretences.
From that day on, it was announced, all tithing monies collected from local congregations would be sent directly to Church headquarters, and "The Church™" would then dispense a portion back to the wards. This was all sold as a more efficient way of running things. But it turned the traditional church of Christ on its head, requiring the members to send in their money to a corporate entity that was far removed from them and which became the sole judge on how contributions would be spent. Nothing about the doctrine of common consent was mentioned in the announcement.
President Hinckley and Elders Packer and Monson announced the news at a priesthood satellite broadcast. The details were sketchy, but the new program, said Monson, “eliminated the need for local units to raise budget money as their...expenses are now funded almost entirely from general Church funds.”[5]
Now "The Church™" would fund everything through a “ward budget” it dispensed, based in part on attendance at Sunday services. The tithing slips now read (as of 2012), “Though reasonable efforts will be made globally to use donations as designated, all donations become the church’s property and will be used at the church’s sole discretion to further the church’s overall mission.”
And by "the church" they mean "the Corporation". The general Mormon membership were not included in those decisions, because they are not members of "The Church™".
Finally, in 1997 "The Church™" incorporated Intellectual Reserve, Inc. (IIC) to hold all the church's copyrights, trademarks, and other intellectual property, all media and other copyrightable assets, including all Church owned websites which end with "© 2014 by Intellectual Reserve, Inc. All rights reserved.", and of course...the trademark "The Church of Jesus Christ of Latter-day Saints ©".
"The Church™" also holds several non-tax-exempt corporations, such as Bonneville International and the Deseret News - see below.
Conclusion
So "The Church™" is really a profit making corporation, with a corporate structure, paid directors and corporate by-laws. It:
- Controls at least 100 companies or businesses that generate in excess of $3 billion a year through direct contributions, dividends, trusts or investment income.
- Never borrows money to finance its acquisitions. It pays cash, out of its members' contributions and its business income.
- Has become one the US's largest private landowners, with holdings in all 50 states.
- Has a stocks and bonds investment portfolio in excess of $3 billion.
- Appoints spiritual leaders who double as business leaders.
Because of it's corporate nature and legal structure, what we today call "The Church of Jesus Christ of Latter-day Saints ©" no longer exists as a church - it is purely a trademark owned by a subsidiary corporation (IIC), which is owned by the "The Corporation of the President of The Church of Jesus Christ of Latter-day Saints".
And so now you know why it is, that bloggers and forum users (outside of the LDS membership) refer to "The Church™" as the "Morg" or "TSCC"!
Addendum - Church Finances
In researching the corporate side of things it was hard not to be exposed to copious amounts of material on the financial side of things.
As a result, I now plan to make this the topic of a future blog, but for now... As mentioned above, it is estimated that "The Church™" brings in approximately $11 billion annually from tithing donations and its many business ventures. In addition it owns ~$35-$40 billion in temples and church buildings, real estate and corporate enterprises. Additionally, the church is registered as a charity, and as such, receives tax exemption from the US government, and is not required to disclose its finances.
So, what does "The Church™" do with all those billions? Well it does cost money to send out Sunday lesson materials (print, DVD, and so on), build and maintain temples and chapels, and funds missionary efforts (partially). Estimates are between $3-4 billion. However, it also invests in many corporate profit making enterprises. The church's holdings include (#):
- AgReserves Inc. - the largest producer of nuts in the United States (circa. 1997)
- Beneficial Financial Group - An insurance and financial services company with assets of $3.1 billion.
- Bonneville International - the 14th largest radio chain in the U.S.
- Deseret Management Corp. ($1.2 billion in annual receipts)
- Deseret News - a daily Utah newspaper, second-largest in the state of Utah.
- Deseret Trust Co.
- Ensign Peak Advisors - a multi-billion dollars investment fund management company
- Farmland Reserve Inc. - 228,000 acres (923 km²) in Nebraska,; 51,600 acres in Osage County, Oklahoma; and over 312,000 acres (1,260 km²) in Florida (dba Deseret Cattle and Citrus).
- Hawaii Reserves, Inc. - Miscellaneous church holdings in Hawaii. When combined with the Polynesian Cultural Center (the leading paid visitor attraction in Hawaii) and Brigham Young University-Hawaii, LDS Church-related entities generated revenue of $260 million for the Hawaii economy in 2005.
“By the time the money comes back from the Church Office Building, [The Church™] has generously tithed to the needy from its multi-billion dollar revenue stream something on the order of one percent, often in used, tattered clothing and rice and wheat and so on...For all its bluster and public relations about humanitarian aid, The Corporation, in other words doesn't follow its own rule of tithing. I would not be surprised, if more was spent on PR than on those good works which are PR'd before men.” [Daymon Smith, a former Church Office worker]Lay (non paid) ministry?
Although the LDS Church is largely run by a lay clergy, most General Authorities work full-time and receive salaries from the Corporation of the President.
There are at least 150 or so leaders in the LDS Church that are paid, such as the Quorum of the Twelve Apostles, First Presidency, and the First Quorum of the Seventy and the Second Quorum of the Seventy. On top of that are a little over 400 mission presidents that receive compensation from "The Church™" for a total of approximately over 550 paid church leaders, not counting Church employees. (Aside, it is purported that each new member of the Quorum of the Twelve Apostles, at time of accepting their new position, is given one million dollars to take care of any financial obligations they have - see here).
These
According to one source, in the mid 1990's (twenty years ago) "The First Presidency and Twelve Apostles were paid $600K a year and the Seventy were paid about $120K". Today, estimates are that the highest leaders are paid anywhere from $400,000 to $4,000,000 per year [7]. In addition, in the members of the First Presidency each have unlimited, unaudited charge cards. Hinckley lived in a million dollar condo with servants all provided by Church funds (the house that the current president of the corporation lives in is said to be valued at $2.1 million, which he did not purchased with his own money). General Authorities have significant other benefits like vacation retreats owned by "The Church™" down by St. George and in Oahu, free tuition in Church colleges for their families, world-wide travel pretty much any time they want"....this is arguably appropriate for someone assisting in the management of a $100 billion corporation.
These
All of these multi-billion dollar operations are under direct control of the Corporation of the President, who himself allocates board control to his fellow Apostles and Presiding Bishops, and whose stocks and shares are distributed among the many General Authorities. Most, if not all, of the finances and ledgers (profits, assets, investments, payments, etc.) of these corporations are closed to public scrutiny by deliberate design from "The Church™" (i.e., the Corporation Sole of the President of the Church of Jesus Christ of Latter-day Saints), making disclosure on board payments nearly impossible to discover.
For more information on Church finances, see "How the Mormons Make Money" and "How Mormon General Authorities are Paid", as well as the links proceeding this article (below).
Links:
Wikipedia: History of The Church of Jesus Christ of Latter-day Saints
Wikipedia: Finances of The Church of Jesus Christ of Latter-day Saints
Wikisource: Late Corporation of the Church of Jesus Christ of Latter-Day Saints v. United States (136 U.S. 1)
Corporate structure and succession
Daymon Smith - The Book of Mammon
How Corporatism Has Undermined and Subverted The Church of Jesus Christ
How the Mormons Make Money
MormonThink: Tithing in the LDS Church
