![\"Nigerian](\"https:\/\/wp-media.patheos.com\/blogs\/sites\/186\/2019\/12\/aba-mormon-temple3.jpg\")
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There has been huge indignation in some circles \u2014 including, sadly, among some active and professing Latter-day Saints \u2014 over the revelation that, under the aegis of a group called Ensign Peak Advisors, the Church of Jesus Christ of Latter-day Saints<\/a> has built up a reserve investment fund (or a \u201crainy-day fund\u201d) of one hundred billion dollars.\u00a0 And the indignation flared up again when it was announced that Ensign Peak and the Church had settled with the Securities and Exchange Commission over a matter involving financial reporting practices.\u00a0 (See \u201cChurch Issues Statement on SEC Settlement.\u201d<\/a>)<\/p>\n I haven\u2019t closely followed the discussion and the accusations \u2014 my eyes tend to glaze over at even the mention of stock prospectuses, annual corporate reports, and IRS forms \u2014 but I thought that I would share here a few of my general thoughts on the topic.<\/p>\n First of all, the Church hasn\u2019t confirmed the stunning figure of one hundred billion dollars \u2014 as I recall, Church spokesmen have said that the true number is substantially lower than that \u2014 and it doesn\u2019t seem to me to be so solid a fact that one should simply assume it to be true.\u00a0 In fact, I\u2019ve recently observed critics casually tossing the figure of one hundred and fifty<\/em> billion dollars around, so it seems that the number might be quite malleable depending on the mood and allegiances of the person throwing it about.\u00a0 Strikingly, a recent article in the Salt Lake Tribune<\/em> seems to give a substantially smaller total for Ensign Peak Advisors (\u201cLDS Church investments bounce back, shoot up by $4.1B after three straight quarterly losses: Ensign Peak\u2019s public portfolio valued at $44.4B at end of 2022\u201d<\/a>).\u00a0 But \u2014 the Tribune<\/em> article is behind a pay wall, so that all I have is the headline \u2014 I can\u2019t say for sure how Ensign Peak\u2019s \u201cpublic portfolio\u201d might be related to any total<\/em> portfolio.\u00a0 Are they the same thing?\u00a0 Are they substantially different?\u00a0 I have no idea.<\/p>\n But back to my meditations:\u00a0 My one serious and very indirect brush with Church investment practices came during my involvement as a leader of what, in the wake of its affiliation with Brigham Young University, became the Neal A. Maxwell Institute for Religious Scholarship.\u00a0 We had been given substantial funding by certain very generous private donors and, when we affiliated with BYU, we turned the management of those funds over to the University (which, I think, meant turning them over to management by Church financial experts).\u00a0 And we determined that, on the whole, we would operate on the basis of income derived from those funds rather than by depleting the principal.<\/p>\n In that context, we were given to understand that, barring unforeseen circumstances, we could count on an income for the Institute of five percent (5%) annually.\u00a0 In some years, the invested monies would generate returns of more<\/em> than five percent, but the \u201cexcess\u201d would be reinvested in order to handle years in which returns fell below<\/em> five percent.\u00a0 I will assume the same policy for the Church more generally, and I base what immediately follows on that assumption:<\/p>\n Now, how much does the Church spend each year?\u00a0 I don\u2019t know.\u00a0 But I can supply some figures and an informed guess.<\/p>\n Those two areas alone cost roughly $2B annually.\u00a0 (In other words, pretty much the sum that a five percent annual return on $44.4B would yield.)\u00a0 And we haven\u2019t even begun to get into the building and maintenance of chapels and temples (President Nelson has announced 133 new temples since 2018), the Church\u2019s welfare system, Family Search, the missionary program, Seminaries and Institutes, and so forth.\u00a0 I would think that $5B would be a conservative<\/em> figure for the Church\u2019s total annual budget.<\/p>\n So would it make sense to have a rainy-day fund in the range of $100B?\u00a0 It seems to me that it absolutely would.\u00a0 Suppose an an economic shock that somehow resulted in an absolute collapse of tithing income.\u00a0 Given my proposal of $5B in annual expenditures, having $5B in investment income would permit the Church to maintain its programs and project for a full year without skipping a beat.\u00a0 Already, the Church is expanding rapidly in areas (e.g., Latin America and Africa) where it is doubtful that tithing income fully covers expenditures.\u00a0 And, of course, depressions and recessions have often lasted more than just one year.<\/p>\n But, in fact, faced with the prospect of a more or less devastating financial downturn, it would not be difficult to justify having an investment portfolio even larger<\/em> than $100B.\u00a0 Why?\u00a0 Because a massive economic shock would not only depress tithing receipts but, almost inevitably, reduce the value of the investment portfolio itself \u2014 as the Tribune<\/em> article cited above indicated, Church investments had dropped for three straight quarters until they rose again at the end of 2022 \u2014 while at the same time dramatically increasing the need for humanitarian aid, welfare expenditures, and the like.<\/p>\n For those of us who were born peasants and whose experience with high finance is limited pretty much to paying our monthly bills and reviewing our monthly credit card statements, figures in the millions and billions are stunningly huge, almost inconceivably large.\u00a0 When viewed, however, in the light of the five percent rule that I\u2019ve mentioned here \u2014 or, in any case, some rule very like it \u2014 they shrink considerably.\u00a0 Having a million dollars in the bank sounds impressive.\u00a0 And, of course, it is<\/em> impressive.\u00a0 But keeping one\u2019s expenditures within a five percent annual return on that million dollars \u2014 that is, at $50,000K per annum \u2014 isn\u2019t exactly living high on the hog or putting on the Ritz.\u00a0 The average public school teacher salary in the United States during the 2021 school year was $65,090.\u00a0 The average police officer salary in Utah is $57,408 per year.\u00a0 Entry level police positions start at $48,100 per year while more experienced officers make up to $74,861 per year.\u00a0 The average salary for dentists in Utah is just over $170K.\u00a0 In that light, having a million dollars in the bank doesn\u2019t make one wealthy.\u00a0 It\u2019s a matter of the ratio of income to expenses.\u00a0 It\u2019s a matter of perspective.<\/p>\n I myself take considerable comfort in the fact that Church funds and the monies donated to the Church are competently managed, as well as in the fact that the Church is now fairly well positioned to withstand adverse economic tides, \u201cthat through my providence, notwithstanding the tribulation which shall descend upon you, that the church may stand independent above all other creatures beneath the celestial world\u201d (Doctrine and Covenants 78:14).\u00a0 We haven\u2019t always been in such a strong position:\u00a0 \u201cBehind the Latter-day Saint church\u2019s vast wealth are two centuries of financial hits and misses\u201d<\/a><\/p>\n For an interesting Interpreter<\/em> review-essay on Church finances by Larry Wimmer<\/a>, see \u201cThrough a Glass Darkly: Examining Church Finances.\u201d<\/a><\/p>\n \u00a0<\/p>\n \u00a0<\/p>\n<\/body><\/html>\n","protected":false},"excerpt":{"rendered":" \u00a0 \u00a0 There has been huge indignation in some circles \u2014 including, sadly, among some active and professing Latter-day Saints \u2014 over the revelation that, under the aegis of a group called Ensign Peak Advisors, the Church of Jesus Christ of Latter-day Saints has built up a reserve investment fund (or a \u201crainy-day fund\u201d) of 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