Monday, December 30, 2019
About two weeks ago, Religion Unplugged and the Washington Post simultaneously broke a story: the Church of Jesus Christ of Latter-day Saints (which going forward I'll refer to as the Mormon or the LDS church). In brief, they reported a whistleblower complain to the IRS saying that Ensign Peak Advisers, a tax-exempt supporting organization/integrated auxiliary of the Mormon church, was sitting on investment assets worth $100 billion. Moreover, during its 32-year existence, the whistleblower alleged, it had never made any charitable distributions, to the Mormon church or any other charitable institution.
As both someone who spends a lot of time researching and writing about the intersection of tax and religion AND as a practicing Mormon, that revelation ended up taking a lot of my time. It raises interesting and ambiguous legal questions, many of which I wrote about here.
Over the course of my blogging this week, I'm planning on using the story to reflect on questions of church financial disclosure, of endowments held by tax-exempt organizations (and especially churches), and other policy questions. I'm not going to spend a lot of time on the technical treatment of this kind of church endowment, both because the answers are ambiguous and are probably not terribly important. After all, had Ensign Peak Advisers made modest distributions, or had the Mormon church held its investments in-house or with a for-profit investment fund, there would be no legal question: there is nothing preventing an actual public charity from holding a large endowment (section 4968 notwithstanding).
But even with that money held in-house, this size of an endowment would raise the transparency questions and questions of whether public charities should be able to amass so much money without paying taxes on it. So please join me this week as I try to think about some of these questions.
Samuel D. Brunson