For decades I have been involved informing Evangelical Christians the truth about the Church of Jesus Christ of Latter-day Saints. (Note: That church no longer refers to itself as the Mormon Church or the LDS church or to its members as Mormons. However, for space sake we will continue to use those traditional designations.) In all the years of my speaking and writing on Mormonism I have focused my research on historical, theological, and philosophical problems of the LDS. As I have proven in many articles on the MarketFaith website, Mormonism is clearly a pseudo-Christian deviation movement. The truth is, Mormonism and historic Christianity disagree at every point of essential theology. They have different authority structures, different concepts of God, different understandings of sin and the Fall, different views of the person and work of Jesus Christ, entirely different ways to attain salvation, and different ideas about life after death. Mormons use a lot of Christian terms, but have entirely different definitions for them.
As much of a critic of Mormon doctrine as I am, I have resisted being overly critical of Mormons and their leaders as people. I have indicated respect for their high moral and ethical principles, and their strong emphasis of family life. However, a December 2019 news story appearing in several national media outlets may mar that image. The story was based on a public report by a former Mormon named Lars Nielson (see his video: https://www.youtube.com/watch?v=KDlFZF3RyhE). Nielson made public a letter sent to the U.S. Internal Revenue Service by an anonymous whistleblower who worked in the LDS financial system. The whistleblower made a disturbing discovery as he was examining the church’s financial situation. He was later revealed to be Lars Nielson’s twin brother named David Nielson. (Note: After Lars went public, David indicated that he had not wanted his identity or the letter made public.)
The Nielsons’ discovery, if true, blows the lid off decades of silence by the LDS hierarchy as to how the “tithings” collected from church members is being used (or not) by the church. Every good member of the church must give at least 10% of his or her income to the church annually in order to maintain his or her pass to the church’s temples. The pass is called a “Temple Recommend” and is signed by the member’s bishop only after an annual review of his or her personal behavior and a thorough audit of his or her income. In Mormonism, doing “temple work” is an essential requirement for a person’s ultimate salvation. All donated funds received are sent to the church headquarters in Utah. The headquarters then dispenses the money back to local wards (congregations), regional stakes, area missions, and other church ministries as dictated by the church leadership. The church keeps all financial processes and holdings private and a public report has not been released since 1959.
So what did the Nielson brothers discover? They uncovered, almost by accident, that the highest leadership of the Church of Jesus Christ of Latter-day Saints, for several decades, has accumulated a secret reserve portfolio of stocks, bond, cash, etc., now worth more than 100 billion dollars (that’s billion with a B)! That is up from about $12 billion in 1997 when it began as a successor to the church’s old Investment Department. It is still growing. The portfolio is called the Ensign Peak Advisors fund or EPA (not to be confused with the Environmental Protection Agency). EPA is officially a registered 501c3 non-profit fund completely owned by the Corporation of the President of the Church of Jesus Christ of Latter-day Saints. That is to say, no federal or state taxes can be levied against it. Much of the EPA money comes from tithings of members collected in excess of the needed amount to support the church’s programs. The church’s annual income is about $7 billion per year, of which about $1 billion per year goes to EPA. EPA also has expanded rapidly from compounded interest and stock dividends the portfolio itself earns.
Legally, there is nothing wrong per-say with a church’s reserve fund having a non-profit status. However, the IRS law states that a 501c3 organization’s donated dollars must be dedicated and spent for (and only for) religious, educational, or charitable purposes. They cannot be used to support any for-profit business or organization. Incredibly, the whistleblowers’ letter to the IRS alleges that the LDS’ EPA reserve since its inception in 1997 has not spent any funds for any religious, educational, or charitable purposes. The only EPA expenditures they could find were about $2 billion spent a few years ago. $600 million went to bail out the LDS church owned Beneficial Life Insurance Company in 2009 (a for-profit business). $1.4 billion EPA funds also were expended to help pay for the church built City Creek Center and Mall in downtown Salt Lake City, Utah in 2009-2013 (another for-profit enterprise).
This report certainly should raise eye-brows both at the IRS and among the loyal members of the LDS church. They should ask why that enormous amount of money ($100+ billion), most collected as surplus income from members, is not being used for any practical purposes? Could not at least a fraction of it be spent to help the homeless, feed the hungry, or do other humanitarian projects? The LDS church claims that it does spend about $40 million a year (none coming from EPA) for humanitarian purposes. Why then has the Mormon top leadership socked away billions of dollars in a fund kept secret even from its members? As Lars Nielson points out, the EPA could basically fund all of the church’s programs just from the compounded interest and dividends it accumulates annually without having to collect another cent from the members.
It seems peculiar that a church as rich as the LDS (e.g.: it owns 2% of the real estate in Florida) requires its members to give unquestionably while hoarding billions for no visible purpose. Oddly enough, the church requires its 70,000+ missionaries (most 19-20 years old) to cover their own expenses during the two years of their service. According to the Nielsons, that comes to about $550 a month, or about $13,200 in 24 months. All told, the LDS missionary program costs about $336 million per year. That amount equals less than .34% (not 34%) of the EPA funds, none of which is used to support Mormon missions or, apparently, anything else.
So why is the LDS hoarding so much money? One theory is that the church’s top leaders believe the Second Coming of Christ is near. After all, Joseph Smith told his followers more than 175 years ago that they were living in “the Latter-days,” so it must be really soon now in the 21st century. They truly believe that before the Millennium there will be the great Battle of Armageddon and the world will be left in dire straits with suffering around the world. The LDS church will send out thousands of missionaries and save the day with its vast storehouses of wealth and provisions (i.e.: the Ensign Peak Advisors fund, etc.). FYI: “Ensign Peak” (from Isa 5:26; 18:3 KJV) is a mountain top near Salt Lake City where Brigham Young decided to settle his people and symbolizes the church’s power.
Where will all this lead? Lars Nielson believes the EPA could and should lose its tax-exempt status. It could also face huge tax penalties as high as $50 billion if it is determined the EPA was never intended for religious, educational, or charitable purposes. But, he says, that is unlikely. What the IRS will do is anyone’s guess. It should at minimum do an investigation of the EPA. It may choose to ignore the whole thing or levy a minor penalty. Remember, the LDS has a number of politically powerful and wealthy members.
Because of this and other cases of non-profit tax fraud (and believe me there are lots more of them even in evangelical churches), the IRS probably needs to review its accountability standards for organizations claiming 501c3 status.
In any case, the 16 million members of the Church of Jesus Christ of Latter-day Saints should start asking pointed questions about it all to the church President, the Counsel of the Twelve Apostles, the Presiding Bishopric (finance department), and the rest of the General Authorities. If they are not forthright about this, what else do they not want their people to know?