In the last twenty years or so, many large, and previously successful corporations have turned belly-up and declared bankruptcy. The list of failures is a who's-who of American brand names: General Motors, Enron, Shearson Lehman Brothers, Toys-R-Us, United, Delta, IndyMac, Chrysler have all been bankrupt. Many more companies like Sears are on life support as corporate raiders slowly dismember the still living carcass. Some companies survive bankruptcy and live to profit another day. Many do not survive and slip into the back pages of history.

Simply put, a company or individual can enter bankruptcy voluntarily or creditors can force it by court action. Regardless of the mechanism, bankruptcy is the result when a debtor cannot meet payments to creditors and consequently loses control of its assets. Ultimately, this all comes down to cash flow. The famous bankruptcies mentioned above were all of companies that were enormously wealthy, having millions or even billions in assets. But what undid them was the inability of generating income to match their expenses. The moment that happens creditors get worried. In fact, large wealthy companies may make more attractive targets for creditors intent on bankruptcy because the debtor has more to carve off and sell. Creditors potentially get great deal on "marked down" bankruptcy distressed assets.

Companies then are always walking the edge of a knife. They have to borrow money to build their companies, but the moment momentum falters and income drops, those very same companies that lent them the money may swoop in and take the company away. As Charles Dicken's character Mr Micawber's said: "Annual income twenty pounds, annual expenditure nineteen [pounds] nineteen [shillings] and six [pence], result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery." That is the fine balance between success and bankruptcy.

I know nothing about the state of the church's financial health. I do know that tithing historically has been a key source of income for the church, and that must be stagnant at best, or falling. I know that the church has tried to cut operating expenses by having the members do more in maintaining buildings while at the same time it has been on a constructing boom. The only evidence of growth for church membership has been in lesser developed countries that probably generate less tithing and may even cost more than they yield. There have been doubts about the profitability of City Creek Center. It is easy to imagine huge expenses and dropping income. On what sort of margin does the church operate?

So is the church being squeezed? Although it has enormous investments, those assets don't mean that the church can meet cash flow demands. Does the church ever borrow? Who are its creditors? If the GAs see that the church won't be able to meet its financial obligations, would they declare bankruptcy to protect the Corporation of the President of the Church of LDS (the actual owner of the church)? It could all turn on six pence.

One thing that the LDS church has going for it that, GM, Sears, etc. don’t have is hundreds of thousands of people willing to not only work for free, but willing to pay for the privilege.

Another is tax exempt status..

I don't think the church carries much, if any debt.

I also think if the squeeze came, they would sell assets outside the US, generating profit, and reduce operating costs, easily remaining afloat while retreating back into Utah. It would look like a retreat to normal people, but would be sold as the sifting of the wheat and tares before Jesus comes down to reward his faithful Mormon followers.

There would need to be a major game changing event to make a significant change in that long, slow retreat back into the heartland I think.

Who wants to buy a bunch of LDS meeting houses and temples? They might be on desirable land but in most cases you would have to tear the existing buildings down to build something else.

Unless it’s a hot location where it’s normal to buy existing buildings and tear them down that church property is no real asset. What are you going to do with a LDS temple? I guess they would make a weird and kinky swinger’s club which was Joe’s original idea.

Church property doesn't just include chapels, MTCs and temples - they're just the tip of the iceberg.

Rubicon Wrote:
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> Who wants to buy a bunch of LDS meeting houses and
> temples? They might be on desirable land but in
> most cases you would have to tear the existing
> buildings down to build something else.
>
I can think of several building locations in the UK that sit upon valuable land. The church would make a very healthy profit if they sold them for redevelopment. I suspect this is replicated throughout Europe.

Sure, some of the spots chapels are built upon are not worth much. Those less expensive locations can easily repurpose the building to other community groups, which has happened several times in Scotland as the church has sold off buildings they no longer could support.

Different Protestant denomination, different pastor, or even a non-Christian church. If its in a residential area there may be a good market for it, though church attendance as a whole is declining in the US. Even if it has to be 'dozed, a good sized parcel of land in an attractive neighborhood is valuable to build larger homes. I am thinking of some areas of SLC where LDS membership used to be sky high but is waning so LDS, Inc could save $$ by consolidating stakes.

The church has invested in shopping malls when they are going out of fashion... But they also have a diverse portfolio, which includes a lot of land and property (not just the obvious buildings)... So I think they have some insulation against bankruptcy.

Weirder religions have survived. I suppose it all depends on how they morph. Will they hunker in Amish style or will they evolve into mainstream Christians? Both might survive.

I was watching Mass on the Catholic TV station yesterday. The people there were mostly old gray-haired ladies. I can't believe that stuff has survived but if they maintain money, numbers and political power, that appears to be the key to survival.

The Vatican is a sovereign nation. It’s a state. It’s into a lot of things. The Roman Catholic Church is the state religion of the Vatican.

That’s all a bigger can of worms than LDS inc. is by far. Successful states and organizations adapt and survive. The Vatican has done so for 2000 years.

I like how the Vatican is a sovereign nation but when it comes to being financially responsible for sexual abuse cases within their church, they managed to make that a local issue.

dagny Wrote:
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> I like how the Vatican is a sovereign nation but
> when it comes to being financially responsible for
> sexual abuse cases within their church, they
> managed to make that a local issue.

You're conflating the Vatican with the Catholic Church. Abuse is always prosecuted at a local level, and most priests have never had a Vatican passport.

Right. Many Mormons have never been to Utah either.

I'm talking about responsibility for the religion that they spawned. They do everything they can to take credit but not the blame.

MarkJ Wrote:
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> So is the church being squeezed?
================================

No more bragging on numbers, cheapness on mundane matters (every member a custodian, etc). McTemples are cheaply constructed. There seems a global retraction/consolidation. Hubris of old is replaced by a retraction and siege mentality, whistling in the dark.

It seems from the cumulative data available, the $ trend is negative.
Watch what they do; their propaganda is just that.

The smaller temples are built like a luxury home. Some even have wood framing. The larger temples are built like an office building. They have a steel superstructure with a hanging facade on them.

Nothing more than nice houses and office buildings for the Lord. Far from being modern day cathedrals or any real religious artistic treasure.

They are slowly oh so slowly heading for their hills and going Gadianton. Maybe they are now full Gadianton. Probably.

As far as I know, LDS Inc carries no debt. They own a huge tree farm and huge cattle ranch/real estate development in Florida, both multiple hundreds of thousands of acres. Those two parcels constitute 2% of all the privately owned land in the state of Florida.

They have large "welfare" ranches and farms around the world. I know they have property in Australia, Brazil, Argentina, and Canada, and numerous properties in and around Utah. And then there is Bonneville Communications, with various radio and tv stations, and KSL, LDS Business College, Polynesian Cultural Center, Triad Center, three universities, and land at various historical/tourist sites across the US (Nauvoo, Martin's Cove, Palmyra, Harmony PA, etc)

They just bought an apartment or condo complex along with their Philadelphia temple property.

They own a number of blocks of downtown SLC, above and beyond the two ten acre blocks of City Creek. City Creek itself is a 4 level underground parking structure, 4 high rise office buildings, two high rise and two medium rise condo buildings, and the mall itself.

In short, even if they are running a negative cashflow on tithing (and I don't know that that is the case), they have enough assets that can be liquidated that they can coast for many decades.

I think they are in far more danger of not having enough "volunteers" to run all their wards and stakes in coming years, than they are in danger of not having enough money. For all the faults LDS Inc has, they seem to be pretty competent at running businesses.

What will be worth more in the future is the water rights the church holds. Water will be the resource that is fought over in the future. The church likes to buy agricultural land with water rights.

The commercial properties that are retail related can become a liability. The church might take a real bath on some of that.

It will be interesting to see what happens to the church if we have another stock market and real estate crash and another bailout won’t work. In other words another depression we can’t paper over. When that happens we will see how solvent the church really is.

The church has been bankrupt several times before. In Kirkland building the Kirkland temple put the church into bankruptcy. The church tried to solve the problem by starting it’s own bank which of course failed. This was the main reason why Joseph Smith had to leave Kirkland.

Again the church found itself bankrupt and in debt because it completed the Salt Lake temple. The church operated on barter. There was no cash tithing. It could operate fine on volunteer labor and locally acquired resources. The church had a problem when it had to buy things with cash. To complete the temple it had to purchase a lot of items that required cash because the church could not produce them. The electrical lighting for the temple alone had to cost a fortune.

The church was in debt until it went to cash tithing. This paid off the church debts in three years and then the church started having a surplus which it invested in business enterprises.

In the late 50’s the church again was in debt. It made some poor business decisions and investments and it built too many meeting houses. The church had the strategy if it built nicer places to meet this would encourage more people to join. This turned out to be a costly mistake. It took years to get out of this hole.

Today the church is spending money like crazy on temples. I think what it is doing is cashing out of it’s equities and putting the money into temples. With stocks being so overvalued it’s a good time to cash out. The church isn’t growing but it will have a lot more temples. These aren’t cheap properties to maintain even with volunteer help and even if the land is valuable building a temple on it ruins the value. The church would be smarter just to hang onto the empty lot but real estate right now is in a bubble as well. If the church was really smart they would cash in on selling real estate than buying it right now.

Will the church go bankrupt again? It seems to have a long-term pattern of doing so. Without seeing some real financial statements it’s hard to tell where the church is at. It’s spending more money now than ever in it’s history and remember the guys who make the big decisions are old men and many have never ran a large corporation before. Russell M Nelson never ran a business in his life. Look at the quorum of the twelve. Most are church buerocrats, academics or professionals. Russell M Ballard has some business experience and Dieter Uchtdorf was a airline executive.

Nelson was a surgeon. Oaks was a lawyer. Holland was an education buerocrat. Bednar is an academic. None of these guys have any experience running large corporations which the church is. Sure you have people in the Presiding Bishopric that have business experience but it’s the top guy who owns the corporation and makes the final big decisions. They seem to like to spend and spending gets you into trouble.

Agree with your general point, but if Uchtdorf worked for Lufthansa at boardroom level, that surely makes him the one person in that list who is qualified.

The Q15 don't run any of the businesses. At most, they function as a board of directors.

The last time LDS Inc was in a serious financial hole was in the 1950s/60s, when Henry Moyle dug them into a hole with chapel building and purchasing the Deseret Ranch. They are long since out of that hole, and the Deseret Ranch is literally worth billions thanks to the growth of Orlando, which is now encroaching on the ranch. Lucky guess. Nobody knew in 1957 that Disney was going to build in Orlando. And it has always been a thriving cattle operation, and continues to do well on that front.


Related point: I know BYU takes a lot of flack here, but they do have well regarded programs in their Business College and MBA program. I know one student who tried to get into the BYU MBA program and got rejected. Harvard was his fall-back. [full disclosure - the guy had an undergrad business degree from BYU, and they prefer not to accept MBA students who did their undergrad at BYU]

Between that and the general corporate training males get simply by being Mormon (which uses a very corporate organization structure), like I said above, LDS Inc is pretty good at running businesses. Yes, they had some rough patches in the past, but they are a much different organization than they were 100 years ago, and even 60 years ago.

I agree with you that while raw temple property is valuable, having a temple sitting on it ruins the value, and they have high operating costs. Those are not where the serious money is invested in LDS Inc. Their liquidation value is not that great in the overall scheme of things.

I don't know where you live, but a BYU degree is not well regarded in the mid-West or East. In fact, and I speak from personal experience, if they see BYU on the ol' resume - people are not stupid - they know the degree is from cult-u and they don't want to work with weird-ass people who can't even drink coffee or tea. BYU gets a lot of flack here for good reason - it's a POS university, except in the West.

I grew up back east near an ivy league university (they were in the same LDS district). There was always a constant stream of BYU grads in graduate programs at the university. The Boston area had/has a strong LDS presence largely from Mormons who went to grad school there, many of whom stayed in the area. Mitt did OK for himself there. So, the Ivy League schools seemed OK with accepting BYU grads.

I spent half my working life at a midwestern university. There were a fair number of people who had one of their degrees from BYU (usually a BS) on the faculty. I was on 15 to 20 search committees over the years. My exMo-ness was well known. Every job search, we got applicants who had BYU somewhere on their resume. Nobody ever, even as an obvious joke, said anything along the lines of "ah, BYU, we should trash-can that one".

We actually had a graduate of BYU-I [from a discipline where an MS was the terminal degree which meant he was eligible to be hired into a tenure-track spot at a university] who received the outstanding university professor award one year. He was indeed very good. Rexburg? Who'd have thunk?

I knew people in the university's placement office. They had access to placement statistics from around the country, BYU did well. Their business grads did particularly well. Lots of corporations recruited there. We would have killed to get half the companies they had.

That was my experience. I think exMormons are the wrong group to ask for opinions about BYU degrees. They are clearly not a major research university, but they put out respectable bachelors degrees in a number of fields, IMHO, especially STEM and business.

I never ran into a problem having BYU on my resume. The only thing that would usually come up was comments on the football team.

The Deseret Cattle Ranch was a happy accident. Moyle was a cattle rancher and he knew that part of Florida was excellent grazing land.

Now the baby boomers want to retire there and New Yorkers are fleeing the high taxes and moving to Florida. Florida is growing like a weed and that land becomes even more valuable.

I would venture to guess LDS Inc is not in great financial condition.

My reasoning is that it is based in the financial, mortgage, insurance, and securities fraud hotspot of the country.

It is the biggest target, and blind trust is encouraged in leadership. Most midlevel managers are basically anonymous and we have no idea of the vetting process LDS Inc does behind the scenes.

Too many people consider church embezzlement consists of stealing a few thousands out of offerings.

Professionals think bigger, such as taking out multi million dollar mortgages against malls, ranches, and temples.

Funny that so many people have been duped by LDS fiduciaries while we have never heard of a large embezzlement case involving LDS inc, with a senile board of directors and a need to conceal financial theft to keep their con going with donors.

This company is bleeding badly.

A decent sized strike by disgruntled employees would be interesting ...

Whose side would Jesus be on?


Would the church hire expo scabs?

LOL!

They can run for years on their accumulated steam.

https://en.wikipedia.org/wiki/Beneficial_Financial_Group

As long as tithing receipts at least have them breaking even.

They aren't the religion to buy a fleet of jets.

Unfortunately, there will always be hunker down leadership willing to put coal in Ye Olde Ship Zion. It will steam on long after I'm gone.

Elder Berry Wrote:
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> LOL!
>
> They can run for years on their accumulated
> steam.
>
> https://en.wikipedia.org/wiki/Beneficial_Financial
> _Group
>
> As long as tithing receipts at least have them
> breaking even.
>
> They aren't the religion to buy a fleet of jets.
>
> Unfortunately, there will always be hunker down
> leadership willing to put coal in Ye Olde Ship
> Zion. It will steam on long after I'm gone.

Operating income of $42.5 million in the last report (2005) 19 years ago.

Admitted being hurt badly in 2008 financial crisis, and stopped writing policies in 2009.

3.0 billion in assets (as of 2005?) is tiny in the insurance business, and even they claimed they were too small to compete with the big boys.

I would not consider this a powerhouse of income after stopping new policies while retaining the liability of old policies.

It is a lot of steam even if they have some major shrinkage which I haven't seen but would love to.

I think the church has been well managed since the 1980's. I believe the church formula for members to pay up to build their own chapels (1960-1980) allowed them to get back on their feet.

A bishop told me that the Church holds funds for 3 years before setting expenditures based on those resources. They will have a long lag to adjust expenses to revenues.