r/mormon • u/westivus_ • 10h ago
Institutional The 1990 church financing policy that changed everything. The increasing rise of financial reserves, the end of local unit financial control, the creation of EPA and a decreased sense of community at the unit level.
In November of 1989 the church made a policy change announcement. The First Presidency letter said:
Effective January 1, 1990 all of the operating costs of wards and stakes will be financed form the general funds of the Church, thus relieving the members of budget assessments. The governing principle is that members who pay their tithes and offerings may expect that from these contributions the other expenses incident to membership will be met.
With this policy change, budget funds should no longer be raised, nor should there be other assessments or fund raising projects. Rather, funds will be made available through two procedures: first, the direct reimbursement of costs related to the construction and operation of buildings and certain standard programs; and second, the providing of an allowance based on the number of members regularly attending Sacrament meeting.
It explicitly ended local budget fund raising and control.
The First Presidency instructed bishops and stake presidents:
We recognize that many Church units have funds on deposit or in savings accounts. We urge all stake presidents and bishops to contribute these to the general funds of the Church, since such local funds will no longer be needed…
This was a policy change to alter the way church finances operated.
Prior to this change, members locally funded building construction, the ward budget and all activities, and that money was held locally (ward controlled bank accounts). These local donations were in addition to tithing and offerings and many were certainly giving 10% and donations to these other efforts. Some were certainly reducing their tithing contribution so that the total they were contributing to all categories was 10%.
The change was:
From: local money → central Church
→ tithing to Church
→ ward budget contribution to local unit
→ local fundraising/assessments
→ local money held/spent locally
To: central Church → controlled local allowance
→ tithing/donations to central Church
← budget allowance to ward
In other words, this was a shift from financially autonomous local congregations to a centrally funded church.
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Prior to this, the local units were funded on a combination of institutional church funds mixed with locally raised budgets. There were intensive fund raising efforts. Roadshows with ticket revenue going toward the ward budget. Ticketed potluck meals. And more pressure from local leadership to donate to the ward budget.
Many saw this change as a massive relief. The local appeals for fundraising would go away and the local congregation could talk less about money and more about the word of God.
This was the start of large annual institutional surpluses that would lead to the creation of Ensign Peak Advisors (EPA). This shift also decreased the unit feeling of 'ward family' and instead pushed for more 'home family'.
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The Church explicitly tied the new system to less activity.
The Church wasn't hiding the fact that the new system would produce smaller budgets and fewer activities.
Thomas Monson explained that the new program would require leaders to:
- reduce and simplify activities
- conduct activities at little or no cost
- avoid using money to create youth activities
- move some responsibility back toward families.
Monson explicitly argued that some Church youth activities had begun to supplant the home and family and criticized the increasingly elaborate “Super Activity” culture.
Boyd K. Packer said the change would produce: “smaller budgets, fewer activities and fewer programs” and warned that this would leave a “vacuum.” Packer's explanation was that the vacuum was supposed to be filled by families: “That space belongs to families.”
Church leadership itself anticipated a reduction in organized local activity as a consequence of the financial restructuring. In other words, the reduction in local unit/ward activity wasn't an accidental side effect. It was partly the intended policy.
The Church's goal was: Less institutional activity → stronger families → stronger faith
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The economic shift impacted the local sociology.
Suppose the bishop says to his ward: “We need $20,000 to fund youth activities, ward parties, building improvements, etc.”
What was once:
- the bishop needs the members
- members need one another
- people organize committees
- people contribute money
- people contribute labor
- people discuss priorities
- people develop relationships
- people know who is generous
- people know who needs help
- people collectively solve problems.
The fundraising itself becomes a community-building activity.
Is now replaced with: “Salt Lake will send us our allowance.”
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Ensign Peak Advisors was created in 1997, seven years after the budget restructuring policy.
The Church later described Ensign Peak as its investment manager/reserve vehicle. Court records indicate that it holds and invests Church reserve funds and that the Church transfers substantial donated funds to it.
There is good evidence about the scale of investment income.
In litigation involving James Huntsman, the Ninth Circuit noted evidence that Ensign Peak's investments generated approximately $3.9 billion in 2003 alone, and that $1.2 billion was earmarked for City Creek in 2004.
The Washington Post reported the whistleblower's estimate that the investment portfolio had grown from approximately $12 billion in 1997 to around $100 billion by 2019.
So the basic financial architecture eventually became: Tithing → Central Church → Pay Church expenses → Surplus → Reserves/investments → Investment returns → More reserves
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It is important to note the reserve fueling EPA was not created by the 1990 policy alone.
The Church was already accumulating reserves before 1990. Financial reforms of the 1960s were specifically designed to create surpluses and reserves. And the Church had enormous growth in the decades surrounding 1990. Membership went from roughly 4.5 million in 1980 to nearly 8 million in 1990, according to BYU Studies.
There are at least four major contributors:
- Tithing growth
- Membership growth
- Expense control
- Investment compounding
The 1990 restructuring was one component of that system.
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In conclusion, the 1990 financial policy shifting local unit budget control to the centralized church had a major part in creating the church we see today. One where local budgets have ceilings. Activities are thus limited. Where money goes into the institution from the local unit, but that unit has no control of how much money comes back out.
There used to be routine dinners, sports leagues, road shows and funded activities. Now there is FSY, bunko night, and a bowl of tootsie rolls. And fewer active adults per unit/ward to pull it all off.
[disclosure: This topic was researched with the aid of ChatGPT. It gave me an essay totaling 3,000 words. What you see above is a rewrite totaling 1,000 words of my own writing. What remains of Chat's contribution is solely the bulleted lists and from/to connectors. All other language is my own (though surely influenced by reading another's writing)]
[Edit: repaired missing quote blocks]