Church finances

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Finances of The Church of Jesus Christ of Latter-day Saints

Summary: The Church takes seriously its responsibility to carefully manage the sacred offerings it receives from members.

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Church finances

• Why would the Church put tithing into investment portfolios?
• Why does the Church not provide public disclosure of its financial data?
• Did the Church hide its investments from the SEC?
• Is the Church guilty of tax evasion?

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Articles about Church finances

Church finances

Church finances Church investments and reporting of financial data Church financial reporting to the SEC Use of Church funds Paid and unpaid Church leaders Tithing Creation of the Kirtland Safety Society Failure of the Kirtland Safety Society City Creek Center in Salt Lake City Other financial topics

Church finances

• Overview
• Caring for the Poor

Overvew

The Church of Jesus Christ of Latter-day Saints is "not a financial institution or a commercial corporation. [It is] the Church of Jesus Christ, and this Church has no other objective than that which the Lord Himself assigned to it—namely, to invite all to 'come unto Christ, and be perfected in him.'" Thus, the use of Church funds is to fulfill that purpose. Presiding Bishop Gerald Causse explains the primary uses of Church funds:

Sacred tithing funds are approved and appropriated to support the spiritual and religious mission of the Church. They are spent in support of six major areas: (1) providing and maintaining places of worship for more than 30,000 congregations around the world; (2) administering the Church’s welfare and humanitarian aid programs, including more than 2,700 projects in 2017; (3) providing education programs, including Church schools, universities, and seminary and institute programs; (4) supporting our worldwide missionary operations, including 420 missions and the resources needed by approximately 70,000 missionaries; (5) building and operating nearly 160 temples around the world, with many more to come, and administering an expansive family history and records preservation program; and (6) supporting the general administration of the Church.

Reviewing these six major areas demonstrates the need for significant financial resources.

• Places of Worship. As of 2023, the Church had nearly 19,000 meetinghouses throughout the world. The construction, maintenance, and utilities of these buildings requires considerable resources.
• Welfare and Humanitarian Aid. In 2022, the Church spent $1.02 billion in welfare and humanitarian aid.
• Education. For higher education, the Church operates four traditional colleges and universities. As of 2022, the total enrollment for these institutions was over 55,000. In addition, the Church operates an online university program that enrolls over 30,000 students in certificate and degree programs and another 36,000 in their PathwayConnect program. The Church also offers Institutes of Religion to young adults not attending a Church college/university. There are over 350,000 students in this institution program. The Church also provides seminary to high school students worldwide. As of 2017, there were 404,000 students participating in this program. While the institutions of higher education receive generous funding from donors, the Church is the primary support for those institutions. For example, as of 2013, Church funds provided more than half of BYU's regular operating costs. With a large education program, the Church needs sufficient resources to support the hundreds of thousands of students participating in its educational programs.
• Missionary Operations. At the end of 2022 the Church had 62,544 full-time teaching missionaries who serve away from home and are significantly supported by Church funds.
• Temples. As of April 2023, the Church operates 176 temples, is constructing 56 more, and has 83 in the design and planning stage. These buildings are essential to the wellbeing of Church members, both now and in eternity, and these buildings require significant funds to build and maintain.
• General Church Administration. To administer the Church's extensive efforts to help others come unto Christ, it employs thousands of Church members and has major administrative offices throughout the world. These resources require a significant amount of funds.

Notes

Caring for the Poor

Why does the church spend so much money on temples and other activities when there are so many poor people throughout the world? Wouldn’t the money spent on these buildings be better used in feeding the hungry?

The Doctrine and Covenants teaches that tithing is commanded for the building of temples: "Verily I say unto you, that it is my will that a house should be built unto me in the land of Zion, like unto the pattern which I have given you. Yea, let it be built speedily, by the tithing of my people. (D&C 97꞉10-11, italics added)

Likewise D&C 119꞉2-3 commands tithing for a variety of purposes: "For the building of mine house, and for the laying of the foundation of Zion and for the priesthood, and for the debts of the Presidency of my Church. And this shall be the beginning of the tithing of my people."

Thus, tithing is properly used for temples and other activities consistent with building the kingdom of God ("laying the foundation of Zion and for the priesthood"). Joseph Smith used tithing for such purposes throughout his administration.

The anointment of Jesus Christ with expensive oils

Just prior to the crucifixion, Christ was anointed with expensive oils. The act was criticized by Judas who suggested that the items could have been sold to benefit the poor. Christ's response was telling. He said "for ye have the poor always with you; but me ye have not always. For in that she hath poured this ointment on my body, she did it for my burial" (Matt 26:11-12). Just as with this event that served to the preparation for the eternal sacrifice of Christ, even so temples make available eternal blessings through Christ's sacrifice. The reality is that eternal salvation is the point of this earth life. Poverty, while certainly tragic and deserving of our individual sacrifices and attention, will only pertain to this existence. In the gospel, we must seek to find the appropriate balance.

Temples are built for the blessings of individuals and families into the eternities. Like the anointing of Christ, their existence serves an eternal cause and are in fact considered the House of the Lord. Just as the use of the oils were deserving of the expense, Latter-day Saints likewise consider constructing temples where sacred, eternal covenants pertaining to eternal exaltation are made, are deserving of our best efforts and sacrifices. Because the ordinances of the temple make all of the purposes of life complete and worthwhile, the temples command a level of attention like almost none other in the church.

The Church does use funds to help the poor and needy

In addition to temple work and other Church-specific activities, the Church uses its funds to help the poor and needy. The Church has an extensive network of farms and canneries that are used to help feed individuals around the world. Its welfare system is based on generous donations of the value of foregone meals from monthly fasts serve to benefit untold individuals. The Church has programs to improve lives throughout the world (for example, helping build wells for safe drinking water and irrigation in Africa), and the Church is constantly preparing to rush aid to disaster stricken areas. The truth is that Latter-day Saints are known to be extremely generous in their efforts to give and sacrifice for the benefit of others. And Church members always have the choice of increasing monetary donations to fast offering and humanitarian funds.

Determining the use of funds

The question about the appropriate balance between using funds for worship, instruction, eternal ordinances, and the relief of poverty is one that, without a doubt, weighs heavily on church leaders. They no doubt consider that there is a need for these other items or else they would not have made such a choice. Just as one might have to chose to expend money and resources on a computer and internet connection, or a home and personal clothes, or a car and other personal items, the Church likewise must consider all the expenses and choices. Bringing temples close to individuals in poverty stricken areas is one eternal blessing that the Church feels is important to sacrifice for. Families in poor areas of the world have sold everything that they had so they could attend the temple to be sealed together as an eternal family. Building a temple close to people such as these makes such future sacrifices unnecessary and will bless tens of thousands. The faithful Saints in poverty stricken countries are willing to sacrifice greatly for the privilege of having a temple close to them, just as did the early Saints in Kirtland, Ohio who made substantial contributions in the midst of personal poverty to construct the first LDS temple in that city. The Kirtland Temple was one of the most expensive ever constructed if you consider the relative poverty and cost of living of those who built it. The point is that temples are so sacred and valuable to Latter-day Saints that their temporary periods of poverty are not as critical to them as obtaining the blessings of eternity.

Notes

• What do the scriptures teach about paid ministry?
• Are local Church leaders paid?
• Are general Church leaders paid?
• What about Church employees?

What do the scriptures teach about paid ministry?

The scriptures mention circumstances in which a paid ministry is appropriate, and also provide several cautions about the practice. Having a paid clergy is not in and of itself a terrible thing. Problems arise when the issue of money becomes a greater motivator than the things of God (and this can happen to any member). So the members support those who are engaged full time in the work of the Church if necessary, but we also do not have a system where one can simply choose to become one of these full-time workers (for example, by getting a degree and looking for a job as a clergyman). This lack of a professional clergy acts as one of the checks on helping to make sure that it is not the financial reward that drives those who serve in the church.

New Testament

In general, the most explicit statement about it comes from 1 Corinthians 9꞉7-14:

Who goeth a warfare any time at his own charges? who planteth a vineyard, and eateth not of the fruit thereof? or who feedeth a flock, and eateth not of the milk of the flock? Say I these things as a man? or saith not the law the same also?

For it is written in the law of Moses, Thou shalt not muzzle the mouth of the ox that treadeth out the corn. Doth God take care for oxen? Or saith he it altogether for our sakes? For our sakes, no doubt, this is written: that he that ploweth should plow in hope; and that he that thresheth in hope should be partaker of his hope.

If we have sown unto you spiritual things, is it a great thing if we shall reap your carnal things? If others be partakers of this power over you, are not we rather? Nevertheless we have not used this power; but suffer all things, lest we should hinder the gospel of Christ. Do ye not know that they which minister about holy things live of the things of the temple? and they which wait at the altar are partakers with the altar? Even so hath the Lord ordained that they which preach the gospel should live of the gospel.

The King James language can be a bit archaic; the NIV translation of the last two verses (13 and 14) may be more clear:

Don’t you know that those who serve in the temple get their food from the temple, and that those who serve at the altar share in what is offered on the altar? In the same way, the Lord has commanded that those who preach the gospel should receive their living from the gospel.

Book of Mormon

Perhaps the most explicit scriptural statement about this issue from a negative perspective comes from 2 Nephi 26꞉31 (cited above).

Church members have a particular sensitivity to issues surrounding paid ministries particularly due to admonitions in the Book of Mormon relative to a practices known as priestcraft, which is "that men preach and set themselves up for a light unto the world, that they may get gain and praise of the world; but they seek not the welfare of Zion" (see 2 Nephi 26꞉29). It is warned against and decried repeatedly (see Alma 1꞉12,16, 3 Ne 16꞉10, 3 Ne 21꞉19, 3 Ne 30꞉2, D&C 33꞉4). For this reason, the idea of compensation for service seems contradictory to strongly held values of the Latter-day Saint community. However, it should be noted that priestcraft as it has been defined is a condemnation of intent (to get gain and praise, and not for the welfare of Zion), and not about an individual receiving support. Living stipends are not compensations for service, but recognition of a practical reality that individuals who dedicate their full time to Church service are sometimes unable to simultaneously provide for their own modest living needs.

The example of King Benjamin adds to the LDS value of self sufficiency of leaders in particular. Benjamin, while king, still labored for his own support (see Mosiah 2꞉14). This is a very admirable demonstration of humility on the part of the king. However, this example was being used in the context of his political position as king, and would be comparable to a President refusing to accept his salary for his service. It should not be used to condemn the practice of helping provide for the modest living needs of full time leaders who are unable to dedicate time to earning a living.

Doctrine and Covenants

When instituting the law of the Church, the Lord directed that the general Church leaders responsible for handling the temporal affairs of the Church should be compensated for their service:

And the elders or high priests who are appointed to assist the bishop as counselors in all things, are to have their families supported out of the property which is consecrated to the bishop, for the good of the poor, and for other purposes, as before mentioned; or they are to receive a just remuneration for all their services, either a stewardship or otherwise, as may be thought best or decided by the counselors and bishop. And the bishop, also, shall receive his support, or a just remuneration for all his services in the church.

The Lord also directed that the compensation be sufficient to care for the leaders' families:

Let the bishop appoint a storehouse unto this church; and let all things both in money and in meat, which are more than is needful for the wants of this people, be kept in the hands of the bishop. And let him also reserve unto himself for his own wants, and for the wants of his family, as he shall be employed in doing this business.

The Doctrine and Covenants Student manual notes:

In addition to his many responsibilities in the Church, Joseph Smith had a family, and he could not neglect them, although his responsibility was chiefly a spiritual one. Although not completely relieved from responsibility for his temporal needs at that time, the Prophet was told by the Lord to look to the Church for temporal support. Elder Bruce R. McConkie commented about those who are asked to give full-time service to the Church:

“All our service in God’s kingdom is predicated on his eternal law which states: ‘The laborer in Zion shall labor for Zion; for if they labor for money they shall perish.’ (2 Nephi 26꞉31.) “We know full well that the laborer is worthy of his hire, and that those who devote all their time to the building up of the kingdom must be provided with food, clothing, shelter, and the necessaries of life. We must employ teachers in our schools, architects to design our temples, contractors to build our synagogues, and managers to run our businesses. But those so employed, along with the whole membership of the Church, participate also on a freewill and voluntary basis in otherwise furthering the Lord’s work. Bank presidents work on welfare projects. Architects leave their drafting boards to go on missions. Contractors lay down their tools to serve as home teachers or bishops. Lawyers put aside Corpus Juris and the Civil Code to act as guides on Temple Square. Teachers leave the classroom to visit the fatherless and widows in their afflictions. Musicians who make their livelihood from their artistry willingly direct church choirs and perform in church gatherings. Artists who paint for a living are pleased to volunteer their services freely.”

Are local Church leaders paid?

The Church does not have a professional clergy. Consider:

• the Church does not graduate individuals with degrees in theology for the purpose of being used in an employed position as an ecclesiastical leader.
• the vast majority of leadership positions in the Church are filled by those who receive absolutely no financial assistance and who have no formal training in theology or Church administration. This includes bishops, stake presidents, Area Seventies, Relief Society presidents, priests, teachers, deacons, and elders, etc.
• Missionaries or their families typically pay for the costs of their missions.
• the Church has no professional ministry — one does not "go into" the priesthood in Mormonism as a form of employment. The Church believes that "a man must be called of God, by prophecy, and by the laying on of hands by those who are in authority, to preach the Gospel and administer in the ordinances thereof." No one can enter Church ecclesiastical government or administration as a career.
• those few Church leaders who receive a living allowance, have already served for many years in unpaid volunteer positions of Church leadership, from which they derived no financial gain, and from which they could have had little expectation of making their livelihood by being elevated to high positions in Church administration.
• the Book of Mormon makes provision for Church leaders to be supported by donations if they are in a position of financial need: "all their priests and teachers should labor with their own hands for their support, in all cases save it were in sickness, or in much want; and doing these things, they did abound in the grace of God."
• the Doctrine and Covenants makes provisions for Church leaders to be supported by donations (see D&C 42꞉71-73).
• General Authorities previously sat on the boards of Church-owned businesses. This practice was discontinued in 1996.

Ward and Stake Leaders

Much of the day-to-day “ministering” that goes on in the Church takes place at the local, i.e., ward and/or stake level. Leaders at the local level—that is, bishops, stake presidents, relief society presidents, elders quorum presidents, and other leaders or auxiliary workers—do not receive any kind of pay for the temporary, volunteer service they render. They likewise do not receive any kind of scholastic training to prepare them for their service. A bishop usually serves for a period of 5 years, for example, but he remains in his normal occupation (accountant, welder, business owner, etc.) while he serves as a bishop. Early morning or release-time seminary teachers are an exception, but they are considered employees of CES (Church Education System).

Mission and Temple Presidents

Mission and temple presidents are called by General Authorities to serve for a period of 3 years. As a result of this call, some presidents leave full-time employment before they retire. Therefore, they may receive a living allowance during their period of service, if it is required. Many such presidents are financially able to take time out of work to support themselves during their service (and return to their vocations when their service is complete) and do not require a living allowance.

In 2011, the Church's official magazine noted:

Serving as a mission president is both a challenging and a spiritually exhilarating three-year assignment. In dedicating themselves to this call, many couples essentially put their old lives on hold, including their jobs and families.

The interruption to professional employment can in some cases mean financial loss. While the Church provides mission presidents with a minimal living allowance, the couples usually have the financial means to supplement that allowance with their own funds.

Are general Church leaders paid?

As directed in the Doctrine and Covenants, at least some General Authorities receive a modest living stipend.

The fact that this stipend exists has not been hidden. As President Hinckley noted in General Conference: "I should like to add, parenthetically for your information, that the living allowances given the General Authorities, which are very modest in comparison with executive compensation in industry and the professions, come from this business income and not from the tithing of the people."

If provision did not exist for allowing those who are not "independently wealthy" to provide full-time Church service, the Church could be seen as "favoring the rich" because it would not allow those of lesser means to serve. The Church has noted:

General Authorities leave their careers when they are called into full time Church service. When they do so, they are given a living allowance which enables them to focus all of their time on serving in the Church. This practice allows for far more church members on a worldwide basis to be considered for a calling to serve as a General Authority, rather than limiting considerations to only those who may be financially independent. The living allowance is uniform for all General Authorities. None of the funds for this living allowance come from the tithing of Church members, but instead from proceeds of the Church's financial investments.

Without some mechanism for providing for the needs of those giving full-time service, only the worldly elite would be able to serve. This factor becomes increasingly important as the Church expands out of North America, especially into nations in the Southern Hemisphere who are less materially well-off than the industrialized west. As noted in a 2013 manual for Church teens, "In our day, General Authorities of the Church give up their livelihoods to serve full-time, so they receive a modest living allowance—enough for them to support themselves and their families."

What financial sacrifices do general Church leaders make?

Dedicating themselves full time at the sacrifice of substantial careers, many general Church leaders live modestly, work tirelessly, keep grueling travel schedules, and continue doing so well past an age when others retire. They are also demonstrably men of education and accomplishment; one can hardly claim that they were unsuited for work in the world given their accomplishments prior to being called to full-time Church service.

Michael Otterson, formerly head of Church Public Affairs, observed:

I can hardly believe it when I hear people question the motives of the Brethren for the work they do, or when they imply there is somehow some monetary reward or motive.

Let me share the reality. Not all the Brethren have been businessmen, but most have had extraordinarily successful careers by the time they are called to be an apostle. As President Spencer W. Kimball once pointed out, the ability to lead people and an organization is a more-than-helpful attribute in a Church of millions of people, especially when combined with spiritual depth and a rich understanding of the gospel. Because several have been highly successful in business careers, when they become apostles their stipend and allowances may literally be less than a tithe on what they previously earned.

Some of the Brethren have been educators. Elder Scott was a nuclear physicist, Elder Nelson a heart surgeon. Several were highly successful lawyers. Right now we have three former university presidents in the Twelve. President Boyd K. Packer was also an educator by profession, although in his spare time and in his earlier days he loved to carve beautiful things out of wood. That sounds curiously related to another scripturally honored profession — that of a carpenter.

Can you imagine what it would be like to be called to the Twelve? In most cases you have already had a successful career. You know you will continue to serve the Church in some volunteer capacity, but you have begun to think of your future retirement. The First Presidency and the Twelve, of course, do not retire. Neither are they released. With their call comes the sure knowledge that they will work every day for the rest of their lives, even if they live into their 90s, until they literally drop and their minds and bodies give out. Their workday begins early and does not end at 5:00 p.m. The Twelve get Mondays off, and those Mondays are frequently spent preparing for the rest of the week. If they have a weekend assignment, they will often travel on a Friday afternoon. Periodically, even though in their 80s, they face the grueling schedule of international speaking conferences and leadership responsibilities.

What about when they are home? I have the cell phone numbers of most of the Brethren because I sometimes have to call them in the evening, on weekends or when they are out and about. I’m not naïve enough to think that I am the only Church officer to do so. So even their downtime is peppered with interruptions. I invariably begin those calls by apologizing for interrupting them at home. I have never once been rebuked for calling. They are invariably kind and reassuring, even early in the morning or late at night.

Their primary time off each year is from the end of the mission presidents’ seminar at the very end of June through the end of July. And while this time is meant as a break, most of the Brethren use this time to turn their thoughts, among other things, to October general conference and preparation of their remarks. During Christmas break they do the same for April conference. Every one of them takes extraordinary care and time in deciding on a topic and crafting their messages. The process weighs on them for months as they refine draft after draft.

This is not a schedule you would wish on anyone. Yet they bear it with grace and find joy for some overwhelmingly important reasons — their testimony and commitment to be a witness of the Savior of the world and their desire to strengthen His children everywhere. They would be the very first to acknowledge their own faults or failings, just as we can readily point to the apostles of the New Testament and see imperfect people.

How much do general Church leaders receive?

In 1996, the church altered some of the responsibilities given to General Authorities. Prior to this point in time, they also served on corporate boards of church-owned companies and for these positions they received a stipend. At that point in time, some of the financial information was disclosed, indicating that the stipend was in the neighborhood of $50,000.00 a year.

To give a sense of proper comparison, US Department of Labor statistics list the 1996 average salary of a civil engineer at $52,750, that of a computer programmer at $50,490, and that of the average junior college teacher at $49,200. Therefore, the living allowance, which provides for most of the normal day-to-day expenses of a full-time authority and his family (including house payments, personal transportation, food, clothing, entertainment, etc.), is in line with that of a professional employee. It is far lower than the large management salaries that might be expected for someone with the skills that these General Authorities must have and the responsibilities that they must shoulder.

In 2014 the stipend was increased from $116,400 to $120,000.

Do general Church leaders sign non-disclosure agreements about finances?

It is possible that general Church leaders sign non-disclosure agreements about their finances. This may be in connection with a general non-disclosure agreement about Church operations generally. Non-disclosure agreements are common in most businesses, in which someone in the organization who has access to sensitive information agrees not to publicly disclose that information. Including financial compensation for executive leaders is likely very common among private businesses in the United States of America, where the amount paid to the executive officer does not need to be reported to federal tax authorities.

What about Church employees?

To provide administrative support to ecclesiastical leaders and members worldwide, the Church employs a small number of Church members in various job capacities, such as meetinghouse facility managers, temple facility managers, and Church department staff. These members are compensated only for their employment activities—they are not compensated for ecclesiastical leadership or Church service.

Church finances

• What is tithing?
• Should I pay tithing on gross income, net income, or something else?
• Can I donate to a charity and count that as tithing?
• Should I pay tithing before paying for food or rent?
• Why should the poor and destitute pay tithing?
• Is tithing "buying our way" to heaven?
• Will tithing ever go away?
• Has the definition of tithing changed over time?

FAIR Answers—back to home page

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Articles about Church finances

Church finances

Church finances Church investments and reporting of financial data Church financial reporting to the SEC Use of Church funds Paid and unpaid Church leaders Tithing Creation of the Kirtland Safety Society Failure of the Kirtland Safety Society City Creek Center in Salt Lake City Other financial topics

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Articles about Joseph Smith

Life and Character	Status in Latter-day Saint belief Joseph's trustworthiness Money digging Folk magic or the occult The Word of Wisdom Alleged narcissism
Youth	Joseph Smith's family as trustworthy and hard-working Education Use of seer stones as a youth The Hurlbut affidavits Joseph Smith's 1826 trial
Revelations and the Church	Witness of Jesus Christ First Vision Book of Mormon Joseph Smith's inspired revision of the Bible (JST) The restoration of the priesthood Personages who appeared to Joseph Smith Production of the Book of Abraham Kinderhook Plates
Prophetic Statements	The U.S. Civil War Rocky Mountain prophecy The White Horse prophecy Alleged false prophecies of Joseph Smith Joseph Smith and Old Testament practices
Society	Legal issues 1826 trial Creation of the Kirtland Safety Society Failure of the Kirtland Safety Society Campaign for President of the United States
Plural marriage (polygamy)	Plural marriage or polygamy Polygamy navigator Plural wives of Joseph Smith
Death	The Nauvoo Expositor Events surrounding the death of Joseph Smith Firing a gun at Carthage Jail Qualification as a martyr 1844 Succession to Joseph Smith

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What was the Kirtland Safety Society "anti-bank"?

Given that banking was in its infancy, the Saints were not sophisticated in their understanding of how a bank worked

Even Brigham Young, an astute businessman, was confused. Brigham deposited a note with his mark on it. He was shocked to receive the same note in payment from someone else a few days later! It seems that Brigham thought that the bank kept his note for him, and did not allow it to circulate. He thought of a 'bank' as something more like a safe deposit box—one puts their valuables in, and the bank keeps those same valuables safe, does not lend them out, and returns the exact same items back when asked. Brigham did not understand that a bank keeps a record of money deposited, but uses the funds deposited to make loans and investments, and to pay other creditors.

In principle, the Kirtland Safety Society was to use land and specie to back its notes

The notes would then circulate and function as "money," which would allow the cash-strapped Kirtland economy to function.

The Kirtland Safety Society was reconfigured as an "anti-banking company" after it failed to receive a charter as a bank

After failing to receive a charter for a bank, the KSS was hastily reconfigured as "a joint stock association, with limited power to issues notes" called the "Kirtland Safety Society Anti-Banking Company." This so-called "quasi-bank" style of operation permitted a commercial enterprise to effectively function as a bank without a bank charter. Other such quasi-banks were already organized in Ohio before the KSS, and even after the bank failures of 1837 (when Joseph Smith and others were prosecuted for operating an illegal bank), Ohio did little to act against other quasi-banks until 1873. Significantly, though, the KSS also had no corporate charter that could be "interpreted loosely" to allow for banking activities, and some authors regard this as the single biggest reason for its failure, although others have argued that the KSS was not unique, since "[t]here were other unauthorized banks in Ohio during this period and some encouragement was received from anti-Democratic newspapers to establish such institutions."

On 2 January 1837, Joseph also obtained a loan of $3,000 from the Bank of Geauga, a clear sign that non-Mormon bankers did not regard Joseph has over-extended or carrying too much debt.

The Kirtland Safety Society was an unwise venture that was probably illegal, though legal counsel was divided on that matter at the time

The intent of Church leaders does not seem to have been to break the law, but to solve a vexing problem which thousands of others also faced. The failure of the bank was not due to mismanagement or a desire to enrich individuals, but due to the relatively fragile nature of the time’s financial infrastructure, and the economic conditions of 1837. The lack of a charter was the KSS's biggest weakness and the most ill-advised decision connected with it. Arguably, even had the bank possessed a charter, the outcome would have been little different, save that the Church leaders would have suffered fewer legal problems and harassment.

The Kirtland Safety Society is an excellent example of why Latter-day Saints do not put their trust in men, but in God. It also demonstrates that the Saints will continue to support fallible men as prophets of God.

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What is the timeline of the Kirtland Safety Society?

Timeline of events

27 March 1836

Kirtland Temple dedication

August 1836

Oliver Cowdery investigates the production of bank notes, so consideration of a bank underway by this date.

2 November 1836

The Kirtland Safety Society Bank’s constitution is drafted. Sidney Rigdon made president; Joseph Smith made cashier.

1 January 1837

Oliver Cowdery arrives with printing plates for bank notes; Orson Hyde reports that the state legislature will not grant them a charter. Their inability to receive a charter leads them to form a joint-stock company, the Kirtland Safety Society Anti-Banking Company (KSS).

2 January 1837

KSS opens for business.

6 January 1837

Notes from the KSS begin circulating

23 January 1837

The KSS announces it can redeem notes with land, but was unable to redeem its notes in specie (gold)

1 February 1837

KSS notes circulating at only 12.5 cents per dollar face value

10 February 1837

A second attempt is made to get a bank charter; some non-Mormons are part of this application, including Joseph Smith’s lawyer and Samuel Medary, a future governor of two states.

April 1837

Joseph Smith twice warns the Saints that the KSS will fail if the members do not accept the notes as payment for goods and services

May 1837

All banks in Ohio suspend specie payment as a banking panic spreads west from New York.

8 June 1837

Joseph Smith resigns from KSS, as he is convinced the bank is not viable

June 1837

LDS newspaper Messenger and Advocate reports that Kirtland land prices have increased 800% during the past year alone.

July 1837

Extant note for $100 with Warren Parrish's signature.

August 1837

Joseph Smith denounces the new leadership of the KSS, since Parrish, at least, was continuing to issue new scrip even though the bank was failing.

27 September 1837

Joseph and Sidney Rigdon go to visit Missouri; in their absence, the Kirtland Church is rent by strife and apostasy

October 1837

Joseph and Sidney found guilty at trial of illegal banking and issuing unauthorized bank paper currency (a civil, not criminal offense). They are fined $1,000 each, and appeal.

November 1837

Final failure of the KSS. Joseph is left with debts of $100,000; he has goods and land, but these are unable to be converted into ready cash

22 December 1837

Brigham Young flees Kirtland for Missouri, convinced that his life is in danger from apostates because of his staunch defense of Joseph Smith

12 January 1838

Joseph Smith, having returned to Kirtland, leaves with Sidney Rigdon to escape the risk of prison and mob action

Was are the terms and definitions related to banking in the 1800s?

Terms and definitions

face value

the specie value marked on scrip. For a $20 note, the face value would be $20.

note

another term for scrip

redeem

to exchange scrip for specie at the bank

specie

hard currency, precious metal coins of accepted value (gold or silver)

scrip

paper money, issued by a bank. An example of KSS scrip can be seen here.

suspension of payment

an indication by a bank that, until further notice, it can no longer redeem its scrip with the face value of specie.

wildcat bank

a bank established as a money-making scam. "A wildcat bank was one in which the managers of the bank made a deliberate effort to evade paying off notes by making the place of redemption inaccessible to those trying to trade notes for specie". Thus, the bank kept the specie, and the note holder was left with worthless paper which no one would honor, since it could not be redeemed (the bank being located "where the wildcats are"). Such banks usually collapsed quite quickly when it became clear that their notes were not easily redeemed.

What were banks like at the time that the Kirtland Safety Society was established?

Kirtland was not alone in this struggle—hundreds of frontier communities tried to set up banks in the late 1830s

This sort of situation is difficult for a modern reader to appreciate: we have easy world-wide banking, debit cards, credit cards, mortgages, and lines of credit. Kirtland was not alone in this struggle—hundreds of frontier communities tried to set up banks in the late 1830s.

As one author remarked:

The founders of the Kirtland Bank would have avoided their distress if national and state leaders had allowed financial markets to grow in an orderly manner. One medium-sized, twenty-year mortgage would have solved most of the financial problems faced by these founders.

The Saints were land rich but cash poor. Credit was scarce on the frontier, and even specie was in short supply. The Saints could not easily convert their considerable land wealth into cash to pay for purchases. (One cannot, for example, pay someone 1/10 of an acre of land for a barrel of nails!)

There were no national banks, and many Democrats were strongly anti-bank. Those on the frontier needed help desperately to keep their economies moving:

The attitude was, essentially, that "the East won't finance us and if they do, they will kill us with interest." The conclusion that frontier communities should finance themselves, whatever their hard equity, was not unique to Kirtland. Added to the economic condition of the western frontier was the Mormon impulse favoring self-sufficiency.

The failure of the Kirtland bank was not unusual, especially for rural banks—fully half of the banks formed in the 1830s had failed by 1845. This was due in large part to the economic realities of the time:

Most economic historians do not believe that banks at that time were usually operated by unprincipled men for selfish ends. More typically, it is the consensus that the instability of bank credit was inherent in the structure of the banking system and involved factors beyond the control of individual banks. The main flaw in state banking in the 1830s was that it was predominantly a rural institution and had little liquidity or shift-ability. In the large cities of the East, loans could be liquidated—that is, turned into cash quickly—by simply calling for payment, but this could not be done in the outlying areas...Thus the reckless and inexperienced management of many state banks was combined with a scarcity of productive commercial loans to create a state banking system with grave weaknesses. As a consequence, most state banks fulfilled their functions at the expense of constant bank failures, violent business fluctuations, and enormous losses to noteholders and depositors.

Why were properties in the name of Joseph Smith?

In the early days of the Church, the finances of Joseph Smith and the institutional Church were enmeshed

This was not unusual, as the idea of religious groups functioning as corporations and holding property was frowned on in Jacksonian America.

In 1836, the Church was centered at Kirtland, and was undergoing substantial growth. The Saints were constructing the Kirtland temple, at considerable cost, as well as financing property and business acquisitions, the immigration of poor members to Ohio, and missionary work.

To finance this explosive growth, loans were sought. Joseph Smith and the Church had extensive loans; some loans were for Joseph, some for Kirtland, and some for the Church. In some instances, Joseph was the only borrower, in other cases he was one among many who were liable for a given debt.

Banks do not loan money to those they consider poor risks, and so to his contemporaries, Joseph clearly appeared to have the ability to meet his obligations. The amount of the loans seems to have been less than the total value of the lands, businesses, and goods which Joseph and the Church owned. However, these assets were difficult to liquefy—the loans were often short-term (from a few weeks to around 180 days) and so cash flow problems beset Joseph continually.

Did Joseph Smith personally profit from the Kirtland Safety Society?

Joseph did not profit personally from the bank, and withdrew his support before the failure

Joseph probably suffered more legal repercussions than anyone from the event. There is no evidence that Joseph was "getting rich," or attempting to do so, from the bank. He paid more for his stock in the bank than 85% of the subscribers, and he put more of his own money into the bank than anyone else, save one person.

In June 1837, Kirtland land values had increased by 800% in just one year, so the idea of backing the bank with land does not seem unreasonable.

Furthermore, the bank's weakness became a drain on Joseph, and he expended considerable resources trying to save it—including obtaining three new loans—which only worsened his position in the end.

Joseph was left with debts of $100,000. He had that value in goods and land, but it was difficult to convert these to cash. (Ironically, it was this very issue which had led to the bank's formation in the first place.)

Joseph fled for fear of his life, but as late as 1843 worked to settle his Kirtland debts

Joseph fled for fear of his life, but also left creditors behind. Admirably, even as late as 1843, he continued to work to settle his Kirtland debts, even though he was far away in Nauvoo and effectively beyond the reach of his creditors. In a 23 June 1874 speech, Brigham Young indicated that "some of his [Joseph's] debts had to be settled afterwards; and I am thankful to say that they were settled up."

R. McKay White, "The Kirtland Safety Society"

R. McKay White,  Proceedings of the 2009 FAIR Conference, (August 2009)

The Kirtland Safety Society Anti-Banking Company is an important part of our church history, having, as it did, a significant role in the Kirtland apostasy. Yet, to date, it has received much more attention from anti-Mormons, or “the other guys”, than from our own scholars and apologists. As a result, there are a large number of myths about the Safety Society that the other guys use to criticize Joseph Smith and destroy faith.

Today, I’m going to lay the episode wide open. We’ll see the myths that have sprung from the creative minds of interested parties, the facts will be laid bare, and in doing so, we’ll see why the Prophet deserves a good name.

Click here to view the complete article

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Learn more about the Kirtland Safety Society

FAIR links	R. McKay White, "The Kirtland Safety Society," Proceedings of the 2009 FAIR Conference (August 2009). link
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Source(s) of the criticism

Critical sources

[Letter on Mormonism, 26 July 1841,] Christian Advocate and Journal (New York) 15, no. 52 (11 August 1841). off-site “Mormonism,” Daily Morning Post (Pittsburgh, Pennsylvania) no. 64 (23 November 1842). off-site “Mormonism, or Knavery Exposed,” Western Recorder (Zanesville, Ohio) (28 April 1841). off-site “Extraordinary Imposition of the ‘Latter Day Saints’—Mormonism—Matter for the Consideration of every good citizen—Important Facts—All should feel that they have a direct interest in them. From the Saturday Courier,” Western Recorder (Zanesville, Ohio) (21 July 1841). off-site Fawn M. Brodie, No Man Knows My History: The Life of Joseph Smith (New York: Alfred A. Knopf, 1945), Chapter 14. ( Index of claims ) Sally Denton, American Massacre: The Tragedy at Mountain Meadows, (Secker & Warburg, 2003), 15. (Source: Brodie) William Alexander Linn, The Story of the Mormons (New York: Macmillan, 1902), ?. E. G. Lee, The Mormons, or Knavery Exposed (Frankford, Philadelphia: Webber & Fenimore, 1841), 12-14. off-site Full title James M’Chesney, An Antidote To Mormonism, revised by G. J. Bennet (New York, NY: Burnett & Pollard, 1838), 21. off-site Full title A Visitor, “Mormonia: Mormon Town. From the Miami of the Lake,” Daily National Intelligencer (Washington, D.C.) (4 July 1837). off-site Wilhelm Wyl, Mormon Portraits Volume First: Joseph Smith the Prophet, His Family and Friends (Salt Lake City: Tribune Printing and Publishing Co., 1886), 35–36.

Notes

FAIR Answers—back to home page

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Articles about Church finances

Church finances

Church finances Church investments and reporting of financial data Church financial reporting to the SEC Use of Church funds Paid and unpaid Church leaders Tithing Creation of the Kirtland Safety Society Failure of the Kirtland Safety Society City Creek Center in Salt Lake City Other financial topics

Church finances

Why did the Church get involved in a shopping center?

In early 2003, the Church announced it was purchasing a shopping mall directly south of Temple Square. Because the Church already owned a majority of the land on which the mall was built, this purchase brought the remainder under the Church’s control. The Church did so with the purpose of revitalizing the are directly south of Temple Square because the Church had a “compelling responsibility to protect the environment of the Salt Lake Temple.”

After three years of planning, the Church announced a 20-acre development project called City Creek Center to replace the old shopping mall and several other buildings directly south of Temple Square. The project would be a mixed-use development, which included retail, office, and residential space. Mixed-use developments had become prominent in real estate development because this type of development “ensures vitality through activity and diversity. It makes areas safer. It also reduces the need to travel, making people less reliant on cars, bringing welcome environmental benefits.” All of these objectives are interests of the Church, especially in the environment around the Salt Lake Temple.

Did the Church use tithing funds to finance the purchases and buildings?

In the April 2003 general conference, President Gordon B. Hinckley explained “tithing funds have not and will not be used to acquire this property. Nor will they be used in developing it for commercial purposes.” Instead, “funds for this have come and will come from those commercial entities owned by the Church. These resources, together with the earnings of invested reserve funds, will accommodate this program.” Multiple statements were subsequently made reinforcing the fact that tithing funds would not and were not used for the development project.

Some claims are made that tithing really was used because some of the money came from earnings on invested reserve funds, which funds were set up using tithing donations. However, financial documents have shown that only earnings on invested funds, not the original funds themselves, were used to finance the development project.

Why would the Church put tithing into investment portfolios?

Some individuals wonder why the Church puts tithing into investments instead of donating to the poor.

President Gordon B. Hinckley explained that saving some tithing funds is a fundamental principle of Church finances:

In the financial operations of the Church, we have observed two basic and fixed principles: One, the Church will live within its means. It will not spend more than it receives. Two, a fixed percentage of the income will be set aside to build reserves against what might be called a possible “rainy day.”

For years, the Church has taught its membership the principle of setting aside a reserve of food, as well as money, to take care of emergency needs that might arise. We are only trying to follow the same principle for the Church as a whole.

The tithing set aside as a reserve is added to the Church’s investment funds. Bishop Gerald Causse explained the reason for putting saved tithing funds into investments instead of simply holding the tithing in cash or cash equivalents:

In the parable of the talents, the lord who asked for an accounting from his servants chastised the one who had not invested the money entrusted to him but instead had hid that money in the earth. He characterized the servant as “wicked and slothful” for not investing that money for a reasonable financial return. Consistent with this spiritual principle, the Church’s financial reserves are not left idle in nonproductive bank accounts but are instead employed where they can produce a return.

Did the Church achieve its objectives with the City Creek Center project?

Most analysts agree that the City Creek project was successful in revitalizing downtown Salt Lake City:

New York Times

“The center has added 2,000 jobs and brought more than 16 million visitors into downtown,” according to the Economic Benchmark Report of 2013, paid for by the real estate firm CBRE. Taking into account the improving economy, the report credits the mall, at 50 South Main Street, with helping downtown retail sales increase by 36 percent, or $209 million, in 2012. The “mall is the single most important thing to happen to Salt Lake City in 50 years, maybe more,” said Bruce Bingham, a partner with Hamilton Partners, a Chicago-based real estate developer. “It revitalized downtown.”

Salt Lake Tribune

The International Council of Shopping Centers “selected City Creek Center — winner of a number of other awards since its 2012 debut — and the site's co-designer and operator Taubman Centers for its top accolade as "the most outstanding example of shopping center design and development for 2014-2015

"Main Street is thriving and it would not be if City Creek Center had not been built," said Jason Mathis, executive director of the Downtown Alliance, representing downtown merchants. "I attribute a lot of downtown's success to City Creek Center's development and the design."

BuildingSaltLake.com

“According to data from the Downtown Alliance, since City Creek opened, downtown retail sales have increased 46 percent, retail employment increased 83 percent and downtown hotel room bookings grew by 62 percent. The retail center’s presence also contributed to an 119.7 percent rise in retail wages, 26.9 in food service wages and 74.1 percent in hotel wages.”

While there are multiple factors that have led to the current boom downtown, based on the numbers City Creek has played an important role in bringing more development downtown. “This is our best example of a TOD (transportation oriented development),” said Reid Ewing, professor of City and Metropolitan Planning at the University of Utah. Ewing led a study looking at foot traffic downtown after City Creek opened and found that the block of Main Street between South Temple and 100 South had the highest pedestrian activity than any other block downtown. Ewing cited his vibrancy scale that measures vibrancy based on imageability, enclosure, human scale, transparency and complexity as an indicator of the health of downtown, especially near City Creek. “This (City Creek Center) has it all in terms of vibrancy,” said Ewing.

Further reading

City Creek Project

• The most comprehensive review of the finances involved in the City Creek Center project is available in “Order Granting Motion for Summary Judgment,” James Huntsman v. Corporation of the President of the Church of Jesus Christ of Latter-Day Saints, 10 September 2021, U.S. District Court, Central District of California, case 2:21-cv-02504-SVW-SK.

• A history of the downtown situation in 2003 is available in "Church to buy Crossroads Plaza mall," Deseret News, 19 March 2003.

• The announcement and details of the redevelopment project is available in "Downtown rebound: LDS Church unveils plans for 20-acre development," Deseret News, 4 October 2006.

• A detailed review of the entire project is available in “Mormon leaders and Salt Lake City work together to transform land,” Deseret News, 7 March 2010.

• A philosophical consideration of whether the Church should invest in things like malls is available in Nathan Oman, "City Creek and the Choices of Thrift," TimesandSeasons.org, 2 April 2012.

Church Finances

• Gerald Causse, “The Spiritual Foundations of Church Financial Self-Reliance,” Ensign, July 2018.

• Church Newsroom, "Church Finances and a Growing Global Faith," Newsroom.ChurchofJesusChrist.org, 22 May 2018.

• Tad Walch, "Church finances: Presiding Bishopric offers unique look inside financial operations of growing faith," Deseret News, 14 Feb. 2020.

Notes

Church finances

• Did early Mormon missionaries to England take advantage of "intolerable social and economic conditions" in order to gain converts?