Demanding Responsibility in NZ Church Finances

There will be some Mormons who will be deeply uncomfortable with the subject of my musings today. Because we Mormons have been studiously instructed to cease to think about our contributions to the church beyond sealing the brown envelope. Matters of faith and pragmatics are often held apart so as to imbue the mundane and secular with a more ‘spiritual’ aura. This is an important and understandable strategy in the development of faith which I most certainly don’t wish to undermine.

However, there are machinations in the arena of church finances that I think are worthy of our consideration, especially in the New Zealand context. In the United States the legal identity of the church is a ‘Corporation Sole’ and operates under the legal name ‘The Corporation of the President” (with the President of the church having the powers of the Trustee in Trust – blah, blah blah…). This means that they are not required to disclose their financial position in an annual return. They are however required to give an audit report which they usually do at April conference. The church also has numerous other financial interests such as: Deseret Management Corporation, Beneficial Financial, Zion Securities etc….

In New Zealand, in an Act of Parliament (1954), the Church was incorporated with all assets transferring to the New Zealand Trust Board who have stated interests in the promulgation of religious, charitable and educational activities. So, unlike the US, in NZ the church is a registered charity (as it appears to be in the UK and Australia). As such they are required to submit an annual return for public scrutiny which is, as we speak, freely available on the Charities Commission website.

This makes for the most interesting reading. By my calculations there are about the equivalent of 160 full-time employees of the church in New Zealand. The salary costs for these 160 employees (as stated in their annual return) is ….wait for it…$16,034,000. If you do some sums, that works out at an average salary of over $100,000 – which looks really odd for a church whose stated purposes are ‘charitable’. Noting that the New Zealand church donations are about $30,000,000 per year and that they are derived from the not insignificant sacrifice of families, widows, beneficiaries and the working poor, I recently asked the NZ Church Trustee – Rick Chadderton, for some clarification on these figures. He responded with ‘we respectfully decline to respond‘ citing lack of resources to do so. I noted that they also spent $3.1million dollars on communication and was at a bit of a loss to know exactly how they lacked the resources to communicate simple information on a publicly listed charity with a budget like that – but there the conversation dried up.

My point is not ask you to dip your candle in the profane and leave the church in droves, but to start to hold the church managers accountable. There are two very obvious arms to the church; one is ecclesiastical and the other is bureaucratic. Sometimes, (and the CCNZ debacle) is a good example of this, the bureaucratic arm forgets its place as managing the adequate provision of charitable services and instead it behaves like a private business taking liberties that responsible charities must not take.

Just as we are inclined to demand responsibility in private financial dealings I do believe we have every right to demand accountability, responsibility and decency in church financial matters. I do believe it behooves us to begin to question the church bureaucracy. They aren’t set apart, ordained, they don’t have a call – they are employees – full stop! Our rights as financial contributors to the church is to demand transparency and responsibility from those PAID to manage the finances. So the next time a church ‘employee’ fronts up in the latest rental ‘Toyota Land Cruiser” or a Lexus, you do have a right to ask him why he didn’t hire a ‘rent a dent’ instead! Or you could even write to the NZ trustees and tell them to take a pay cut??!!

  • Jeff McIntyre

    Gina

    I’ve enjoyed your interesting blog but I must confess to being very puzzled by the one about the church’s paid bureaucracy. I get the impression that this blog post (and your request to have the Charities Commission investigate the church) is perhaps a rerun of the CCNZ demolition decision popular ‘uprising’ that you allude to. I think the two issues are quite dissimilar. Elder Baxter made a capricious and out of touch decision re the demolition that may have been made when he was not well because not long after he was transferred from his Area President position to Salt Lake for serious neurosurgery. The decision to demolish was a silly decision and when Pres Monson came to realize the depth of feeling amongst the local LDS community, he set in motion a reasonable consultation process that will result in a far better outcome. I don’t sense any popular discontent over the conduct, hiring and spending by the Area Office professional managers except amongst your sympathetic perennial questioning types.

    So I’m not sure what it is that you are seeking? Do you just want the world to know that you think that perhaps the Area Office staff is paid too much since that appears to be your inference from your attempt at extrapolating from the Charities Commission return? The Church’s Area Office is dominated by professionals – architects, lawyers, accountants, Property Managers, IT Manager etc. and these are well paid professions. Are they paid too much? Well here in the US the Church is notorious for paying its professionals below market salaries but usually better than market benefits. I can’t imagine the church in NZ is any different. Are you suggesting they be paid a pittance and treat the job like a calling – kind of like they did at Church College (Ewen McDonald told me when he was laid off they said he was “released”) – if you pay peanuts you get monkeys. I’d imagine any external review of salaries would struggle to show any excessive salaries. The church’s paid staff roll is not like the Anglican or other churches where they are staffing the entire work of the church such counselors, part time social workers, pastoral care people who are all paid far less than the professions that comprise the bulk of the Area Office payroll.

    I note your objection to the types of rental cars church employees’ use urging the use of ‘Rent a dent’. What types of rental cars do lawyers or architects who do the same work for Fonterra or the Ministry of Social Development use? Do they drive Rent a dents? Maybe the church has a massive global discount with Hertz or Budget that makes the cost of a standard car barely more than a Rent a dent. What signal does an architect or property manager showing up to meet Fletchers Construction on a building site in a 1996 Toyota Corolla with 280,000 km on the clock send about the church?

    So I’m assuming what you’re after is more accountability. But about what? Salaries? Rental car policies? Who decides what is appropriate or inappropriate? Are your views truly representative of the wider tithe paying church membership or are they influenced by your well-publicized ideological lens of socialism, anti-capitalism and class struggle? Are tithe payers the same as shareholders in a publicly listed company? Is the Area Office obliged to hire communication staff to support Ricky Chadderton like Telecom to liaise (like Telecom do) with their shareholders or comms staff at government departments who must be on hand to answer OIA requests or Parliamentary questions? Is that what you’re after? Do you want some sort of Tithe payers Forum or Association? If so who would be on this Forum? Are they elected or appointed? If appointed by who – Stake presidents? If elected by who? Only full tithe payers? Baptized members over 18 or only active members? How many would be on such an Association? How long would their terms be? Would there a gender and race quota that must be met to be truly representative? Would LDS members of all political persuasions get to have a say or only the left leaning academics who love to moan and bleat about the church on their educated and enlightened forums? Would such an Association have a Constitution? Would its members be for a 3 or 5 year term? Would its decisions be binding? Passed by a simple majority or 2/3rds majority? If you want to have a church that is run like a democracy then try out the Presbyterians or Anglicans for size.

    You seem to want some kind of greater transparency as if the church does absolutely nothing to monitor its expenditure. Aside from the fact that the church’s expenditure on its management overheads is a miniscule portion if it’s gross income, the church has a very professionally run and thorough Audit Department. I know someone who used to work for the Church Audit Department and they told me not only how thorough they were but that they hired the very best they can find for those positions. Minor discrepancies were uncovered but do not rise to any major level of concern – same as any well run large company with good control processes. We all know of cases of expropriated tithing funds and in all cases the parties are caught and dealt with quite strictly. Face it one of the reasons for the eventual decision to close CCNZ I feel was because of ongoing mismanagement of funds so sooner or later things that ought not to be happening get unearthed and dealt with.

    Finally the church is not a company that holds an AGM where shareholders get to vote on the actions of directors. It’s not the Presbyterian Church with a Synod that allows its membership to vote on matters of finance. If its members object to the way tithing funds are spent or feel the church is hiding something, they are welcome to withhold payment of their tithe.

    • http://kiwimormon.wordpress.com kiwimormon

      No, but it is a registered charity and has a statutory obligation to refrain from the pursuit of pecuniary interest. Other credible and effective charities operate without the salaries we see here. This is not a private sector venture. You are talking about the US context which under the legislation of incorporation doesn’t apply in NZ – that’s why we have a trust board. The church in NZ is registered with the charities commission and because it does it does there is a public interest.

      With respect to the CCNZ case, I’m referring to a generalized feeling that the demolition of the site was somehow inspired because the decision came from the ‘Church’. Rob was vilified for calling into question the apparent ‘inspiration’ of the decision. When it turned out that it was purely pragmatics, ‘inspiration’ finally came from the First Presidency. This is what Mark referred to in his post. There seems to be an unhealthy conflation of the ecclesiastical and corporate roles – and I don’t see that as healthy because the corporation can effectively hide behind their machinations with the sheen of ‘inspiration’.

      And you know very well that withholding payment of tithes is not an answer. People want to give their money to the church but they also want to be assured that it is being used for the purpose it is intended. There is no glory nor is there any justification for an employee bowling around in fancy cars at the expense of the tithe payer. If they are that fricken clever that they need to be paid exorbitant amounts.

      How about we have pay parity in the church with the women who ‘man’ the desks for the blokes? That would make it both fair and equitable.

    • http://kiwimormon.wordpress.com kiwimormon

      Oh and by the way – I’m hoping that all of us perennially questioning types actually have a contribution to make, even if its us working things out among ourselves. Tell me – what do you propose one does with ones questions? I do believe the foundation of our church was built on one perennially questioning type by the name of Joseph Smith. Since when did he have a monopoly on that character trait? I think wonderful, hard, transformative, uncomfortable things come out of questioning and we are all the better for it.

  • Jeff McIntyre

    Gina your blog is awesome. It is a great forum for you to speak your mind without fear or favour and I support your effort 100%. I’ll never be someone to say you ought not be heard. But don’t be surprised when people challenge you. Some will feel threatened and challenge even your right to speak out. I think that is not the way to handle people with questions. I am only challenging your facts and also indicating my belief that some of your questions need to be seen in the context of your very clear and obvious ideological lens. As you can see from my lastest post on Facebook – I am challenging the factual basis to your claims that the church’s staff costs in NZ are exhorbitant. I also find limited to non existent grounds on which a complaint can be laid to the Charities Commission since the list of grounds for complaint are as follows:
    ◦significant financial loss to the charity, or the illegal or corrupt use of the charity’s funds or resources
    ◦serious harm to beneficiaries (especially to vulnerable beneficiaries)
    ◦direct or indirect funding of terrorism
    ◦criminal activity within or involving a charity
    ◦sham charities set up for an illegal or improper purpose
    ◦charities deliberately being used for private pecuniary profit or to abuse New Zealand’s tax laws
    ◦where a charity’s independence may be compromised
    ◦serious wrongdoing by a charity, its officers/trustees or employees, that damages or has the potential to damage its reputation and/or the reputation of the charitable sector
    ◦people collecting for non-existent charities or unauthorised people pretending to collect for registered charities
    ◦serious non-compliance in a charity which could constitute serious risk to the public interest
    ◦damaging public trust and confidence in the Commission as an effective regulator.

    I see nothing on that list that gives rise to a legitimate complaint.

    If you think that the church rents cars that are too flash well that’s ok to have that opinion. I venture to say that the total cost of rental cars forms a tiny portion of the overheads even in NZ let alone globally and that the church’s bulk purchasing discount with the major rental car firms would make the savings from moving to ‘Rent a dent’ even more negligible. It all boils down to the peception of how it looks – you feel upset to see a visiting employee driving a flash car. Maybe they were given a complimentary upgrade from a Toyota Yaris – happens to me all the time. Maybe they used frequent flier miles to get the car for free! Maybe the church should operate out of a poky office in a rundown old building and make its staff drive dungas. This comes back to the ideological divide between a left leaning person who tends to resent corporate structures, managerial cultures and capitalist systems in general and the church is very much seen as a religious version of corporate America that is an anathema to the left. Do you have the right to moan about the rental cars used by church employees? Absolutely! Is your complaint that its profligate use of tithe payers funds justified? Debatable.

    • http://kiwimormon.wordpress.com kiwimormon

      Thanks Jeff! I’m more than happy for there to be a reasonable and straightforward explanation for what I see to be bloated remuneration expenditure figure for the church. In fact I will be relieved. What is more I have given the NZTB the opportunity to explain. Unfortunately they have chosen not to, which is indicative of what I see as the deeply problematic lack of transparency. I don’t believe that they honor the legal and structural context which they find themselves in in New Zealand. They USE the statutory rendering ‘Charitable Entity’ to legitimate their presence here but in practice behave like a corporation sole. I don’t believe that that necessarily honors our country, its processes or its culture. There is nothing superior about the Corporation Sole – it was the most pragmatic legal rendering to mitigate for the possibility of the church assets being escheated. But there is nothing holy about it – it just works for the United States. So what about what works here? If they are going to the designation ‘charitable trust’ then they should behave like one.

      With respect to the way that the area office in NZ operates, I’ve long been alarmed by the anecdotes from past employees and those associated with the day to day machinations of the organization to have the same confidence that you have. They have raised not a few eyebrows. Similar anecdotes have come out the those I know have worked in the Sydney office and at Church offices in SLC giving rise to a general sense of discomfit and concern. CCNZ is a good case in point. While there I saw the flagrant misuse of resources and I’ve known a number of employees who were similarly alarmed at the excesses. In order to justify or inoculate themselves from critique they often hid behind the adage ‘ we are the Lord’s church’. I find that problematic – and I don’t see that as a lefty thing. I just see it as the responsible thing.

      I don’t take offense at being challenged. I absolutely LOVE the debate – sometimes I get hot under the collar – but I’d rather be challenged than not because I’m a sucker for it!

  • Jeff McIntyre

    These things have a human and explanable element to them. Ricky’s first cab off the rank response IMO was understandable – he’s too busy. The Church is used to the US regime (as are all churches here so there’s nothing sinister in LDS leaders being used to US style charitable disclosure requirements) and so local adminstrators probably find the likelihood of scrutiny of the greater financial information disclosure requirements under the 2005 Charities Act a little hard to get their heads around. Trust law in general builds in ambiguity between the rights and obligations of trustees and beneficiaries. The statutory obligations of trustees of a charitable trust are governed by the Trust Deed which by law requires that they must adminster the assets and income of the Trust in accordance with the said Deed and of course comply with the wider trust law as well. I had a look at the Deed of Trust which is enshrined in The Church of Jesus Christ of Latter Day Saints Trust Board Empowering Act 1957 – a carryover of the Trust Deed that was registered in May 1921 under the previous Religious Charitable and Educational Trusts Act 1908. There are no provisions in the Deed or its attached Schedules or in the 1968 Amendment Act that expands the Board to incorporate the fact that Stakes were now operational in NZ (that weren’t when the 1957 Act was passed) that suggests any obligation for the Board to report to the church membership. I’ve scoured the Charities Act 2005 to find any statutory obligation that the Trust Board owes to the church membership other than the obligation to publish on the Charities Register its Annual Financial Accounts and could not find any. Under s50 (2) (c) the Commission has the power to” investigate the management and administration of the charitable entity” so that is a definite check on abuses. So one could argue that in not answering requests for information they aren’t breaching any laws. Now whether their silence is a good look – thats another matter.

    • http://kiwimormon.wordpress.com kiwimormon

      I realise they have no obligation under the law to report to its contributors. But the publication of their annual returns indicates the requirement to allow public scrutiny. When a member of the public scrutinizes their returns they should have something in place to respond with the kind of transparency that the Charities Commission highly recommends.

      I recently had a chat with the administrator of the Christchurch Cathedral who in half an hour told me how much they get off the plate, the size of the endowments, the size of their property portfolio, income from leases etc. how much they pay to the diocese, and the costs associated with running the cathedral – including all kinds of nifty information about the cardboard cathedral rebuild. From a vicar I found out how much the salaries of priests (and the bishop) with no resistance, self-consciousness, snarky or mind your own business retorts.

      I can only guess why they were being so stuffy about it, and that’s dangerous! When you keep people guessing they get irate. Look at the fall out from Romney’s refusal to release his tax return. While there will be many people who will say ‘why should he?’ the fact that he simply won’t (unlike his father) makes him look like he’s got something to hide. He’s probably not dishonest but has found all kinds of loopholes to avoid paying taxes. But he knows that might not look good and has weighed the PR fall out. He’s probably judged that being transparent will be more costly for his campaign than not – which is a worry on many levels.

      So I say, why not just get it all out on the table? Why not have open and transparent ways of dealing with public enquiry? They are after all a publicly listed organisation with an obligation to report to the public. So when they do – why not just front up?

  • Michael

    If you visit the Canada Revenue Agency website and look for the Church of Jesus Christ of Latter Day Saints in Canada, the legal entity that collects approximately $150 million dollars from Canadian church members each year, you will come to a document that indicates that recently, the Canadian Mormons gave $40 million Canadian dollars to BYU. As a Canadian, I really find that rots my socks a little bit. My children don’t get reduced tuition for the $40 million given. Why would Canadians of any stripe raise such a sum for a US University that they have no practical affiliation with?

    • http://kiwimormon.wordpress.com kiwimormon

      Well, well! That’s very interesting. And a very good question. Perhaps the church in Canada (and NZ for that matter) establish a scholarship fund for LDS kids attending there. Surely that must be in keeping with the same principle?

  • Michael

    Here is a link to the charity return for the LDS church in Canada. This return includes the assets of all the wards an branches and the amounts forwarded on from those same wards and branches. Each ward and branch received an amount back, which in my opinion must be for maintenance and utilities. However, if you were to look at any of the nearly 500 returns for the individual units, you will see that a huge amount more is sent to the church office in Calgary than spent by the units. The balance must go to BYU, as I said in one case and of course, who knows where else. No one says.

    Sorry for the big link, I couldn’t work out how to make the hyper link here, but could have done it in Word I guess and posted it here.

    http://www.cra-arc.gc.ca/ebci/haip/srch/t3010form21-eng.action?b=119223758RR0001&e=2009-12-31&n=THE+CHURCH+OF+JESUS+CHRIST+OF+LATTER-DAY+SAINTS+IN+CANADA&r=http%3A%2F%2Fwww.cra-arc.gc.ca%3A80%2Febci%2Fhaip%2Fsrch%2Fadvancedsearchresult-eng.action%3Fn%3DThe%2BChurch%2Bof%2BJesus%2BChrist%2Bof%2BLatter-day%2BSaints%2Bin%2BCanada%26amp%3Bb%3D119223758%26amp%3Bq%3D%26amp%3Bs%3Dregistered%26amp%3Bd%3D%26amp%3Be%3D%2B%26amp%3Bc%3D%26amp%3Bv%3D%2B%26amp%3Bo%3D%26amp%3Bz%3D%26amp%3Bg%3D%2B%26amp%3Bt%3D%2B%26amp%3By%3D%2B%26amp%3Bp%3D2

    • http://kiwimormon.wordpress.com kiwimormon

      That’s a huge link!! But that’s also a lot of money as well on office supplies and cars!


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