Whistleblower claims that LDS Church stockpiled $100 billion in charitable donations, dodged taxes

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A whistleblower complaint to the IRS accuses The Church of Jesus Christ of Latter-day Saints of building a $100 billion investment portfolio using donations intended for charitable purposes, potentially in violation of federal tax laws, according to a Monday report published by The Washington Post.

The complaint was filed by David Nielsen, a former portfolio manager for the church’s nonprofit investment arm Ensign Peak Advisors, with the help of his brother Lars Nielsen, who spoke with and provided supporting documents to The Post.

“In a declaration signed under penalty of perjury, Nielsen urges the IRS to strip the nonprofit of its tax-exempt status and alleges that Ensign could owe billions in taxes,” The Post reports. “He is seeking a reward from the IRS, which offers whistleblowers a cut of unpaid taxes that it recovers.”

Church spokesman Eric Hawkins declined to respond to The Post’s reporting, and instead directed The Salt Lake Tribune to a Q&A on church finances and an ecclesiastical article titled “The Spiritual Foundations of Church Financial Self-Reliance” that makes reference to a practice of reserving a portion of the church’s annual income for future needs.

“The church does not provide information about specific transactions or financial decisions,” Hawkins said.

According to The Post, Nielsen’s complaint describes the church collecting roughly $7 billion in member contributions each year. Of that amount, the complaint alleges, $6 billion is spent on operating costs while the remaining $1 billion is transferred to Ensign Peak Advisors and added to the church’s investment portfolio. Nielsen said Ensign did not use the money for charitable purposes in the past 22 years, but had twice used the money to prop up businesses, once for an insurance company and the second time for the City Creek Center mall in Salt Lake City.

Nielsen’s complaint also says the church may have additional holdings outside the management of Ensign Peak Advisors.

D. Michael Quinn, a historian who has studied LDS Church finances, said the income figures cited in the complaint are difficult to reconcile with his own research, which suggests annual tithing receipts of roughly $35 billion.

“To me, that’s low,” Quinn said of the complaint’s $7 billion income estimate, “very low for tithing.”

The church also spends a significant amount on philanthropic ventures. The church reports spending $2.2 billion since 1985 through LDS Charities.

But Nielsen’s complaint indicates that’s not how the Ensign fund has been used. He wrote a 74-page supplement to his complaint that criticized church leaders for continuing to seek tithing — 10% of a member’s income — despite having huge unspent reserves. “Would you pay tithing instead of water, electricity, or feeding your family if you knew that it would sit around by the billions until the Second Coming of Christ?” he wrote, according to The Post.

Nielsen reportedly sent Ensign a resignation letter dated Aug. 29. The Post reported that the letter, according to a copy provided by Lars Nielsen, said, “his employment had become unworkable after his wife and children left the Mormon church and asked him to follow them."

Lars Nielsen told The Tribune late Monday that his brother asked him to write an “expose fully detailing everything he knew about Ensign Peak Advisors,” which turned into the 74-page document submitted with the complaint.

As he was writing that document, Lars Nielsen said, he reflected on his mission to Sonora, Mexico, where he encouraged members to pay their tithing.

“One woman in particular, a very old woman who had dirt floors, went without tortillas for a week, so she could give her tortilla money to the Mormon church so her sick child would hopefully get better,” he said. “I am so utterly ashamed that her money, week after week, has gotten buried in a mountain, which is Ensign Peak Advisors.”

jump_the_snark on December 17th, 2019 at 05:14 UTC »

Saving up to buy the Nauvoo.

friedpikmin on December 17th, 2019 at 04:47 UTC »

I used to be a Mormon. I stopped paying tithing over ten years ago because it bothered me that the church wasn't transparent about where the donations went. It was always obscure answers. I was basically told to just trust our leaders. Turns out it was one of the best financial decisions 18 year old me made. Lol

socalledDNA on December 17th, 2019 at 04:38 UTC »

In short, the church pulls in $7B from tithing a year, spends $6B, and throws the rest in stocks. Over the last 22 years, that stock portfolio has grown to $100B. $0 has been paid out from the fund to charitable causes and exactly two expenditures have been made: one to a for-profit mall in SLC owned partially by the church, and one for a church-owned for-profit insurance company bail-out.

The church claims $40 million (with an “m”) is spent on humanitarian efforts yearly, but church members know that this likely comes from additional donations earmarked “humanitarian aid” on their donation slips, unlikely from the tithing funds.