Praise and Profit: How Religion Pays Off - TheStreet



) -- Ask the devoted and they might say that their religion is priceless. Ledger sheets might say a different story.

Comparing organized religion to a corporation is a bit disingenuous. After all, a company isn't on a mission to give away most of what it takes in to promote good works throughout the world.

Companies also have far more public oversight than organized religion. In the U.S., investors demand transparency of firms, the SEC enforces and oversees their actions and independent auditors -- at least in theory -- ensure that each line item is on the up and up.

Churches? Not so much.

Once a religion earns federal (as in IRS) recognition, it is freed from nearly all reporting requirements, even the rigorous standards most nonprofits must comply with.

The typical company also has a clear seat of power. Religions, scattered around the globe with myriad power structures, lack a clear equivalent to the corporate headquarters.

Despite both secrecy and fragmentation, there are still insights to be had into the wealth of organized religion. We looked at some of the ways money adds up for various denominations:

The Church of Jesus Christ of Latter-day Saints

Among the controversies that have emerged during the GOP primary was the matter of Mitt Romney's tax returns.

The billionaire -- a former governor of Massachusetts and principal at the private equity firm

Bain Capital

-- had resisted the release of those forms and the insight they would provide to his personal wealth. When he finally relented, it was learned that Romney earned a total of $42.5 million in income between 2010 and 2011.

The initial reluctance surely had to be political, especially amid rhetoric of the 1% vs. the 99%. But Romney may have also been taking a cue from The Church of Jesus Christ of Latter-day Saints, the religion he is a proud adherent to.

Like many organized religions, the LDS goes out of its way to shield the nature and scope of its assets. Any estimate compiled by media or researchers is dismissed as "exaggerated," even when that guesswork is intentionally conservative.

In the book,

Mormon America: The Power and the Promise

, authors Richard and Joan Ostling, based on years of research, estimated that the church holds $25 billion to 30 billion in assets, with at least $5 billion to 6 billion in annual revenue derived from member tithing.

"What makes the LDS Church distinctive is not just the amount of money coursing through its congregations each week ... but the church's heavy investments in corporate enterprises," they write, estimating that its holdings in stocks, bonds and church-controlled businesses were worth approximately $6 billion in 1997. By their tally, U.S. meetinghouses and temples were worth $12 billion and overseas structures another $6 billion; schools add another billion. Tithing, they estimate, brings in between $4 billion and $5 billion a year.

Their research draws upon the few financial peeks that have been allowed since 1959, the last time the LDS officially released detailed financial information. Among the sources cited are the 1985 book

The Mormon Corporate Empire

by John Heinerman (a Mormon at the time) and Anson Shupe, credited by many as the best resource on the matter that has thus far been assembled.

In the 1990s,

The Arizona Republic

newspaper deployed six reporters for more than six months in an effort to get a view of church finances. Despite some interesting tidbits about real estate holdings, that team failed to pull together the comprehensive view of the church's inner workings it desired.

"It is simply impossible to tally Mormon assets or income with accuracy," the Ostlings write, "just as it would be to try to figure out the finances of a multibillion-dollar multinational corporation without access to inside accounts."

What the LDS can't hide are its more obvious assets. Among them are

Beneficial Financial Group

, an insurance and financial services company based in Salt Lake City that holds assets of $3.1 billion and produces annual revenue of roughly $600 million.

That firm is a subsidiary of

Deseret Management

, a for-profit company owned by the LDS. Among its other enterprises are:

Bonneville International

,a multimedia company that includes radio and TV stations;

Hawaii Reserves

, which manages and owns property affiliated with the church;

Temple Square Hospitality

, which runs restaurants and catering services, serving more than 600,000 meals a year; and

Zions Securities

, a commercial real estate developer and property manager.

Roman Catholic Church

That it is difficult to pin down the total assets and revenue stream of the Catholic Church isn't merely a matter of secrecy -- although there is plenty of that -- so much as a challenge of the fragmented nature of the organization and the intangible nature of its assets.

Though centered in Rome, the church is divided into smaller dioceses. Each diocese operates independently. Some are wealthy, some poor; some are financially transparent, others shrouded.

"A true financial profile of the church is elusive," writes investigative journalist Jason Berry in

Render Unto Rome: The Secret Life of Money in the Catholic Church

(Crown, 2011). "Few dioceses post complete financial statements, nor does the United States Conference of Catholic Bishops."

The Vatican is the opulent center of the church. One might imagine its budget alone as staggering. But much of that obvious wealth is held in priceless artwork and architecture that, aside from the commodity values of gold and silver, are nearly impossible to value.

An annual budget, made public each year by the Vatican in an effort to promote transparency, shows it actually ran at a deficit for a few years; in 2010, the Vatican reported a budget surplus for the first time in four years. The budget of the Holy See ended that year with a surplus of just over $13 million -- it had income of about $326 million and expenses of about $313 million. The separate budget of the Vatican City State, which includes the Vatican Museums, had income of about $340 million and expenses of $312 million. The Vatican's budget also doesn't include the more than $40 billion in assets and working capital held by

Instituto per le Opere di Religione

, better known as the Vatican Bank.

By comparison, the

Archdiocese of Milwaukee

reported $98.4 million in total assets, although $90 million offered no liquidity (some $62.6 million designated to cemeteries is set aside for a trust that covers the cost of maintenance and care).

A 2001 report issued by the Vatican put the value of all tangible assets in the realm of about $80 billion, although that has been disputed as either too conservative or too high by some scholars.

Financial analyst Joseph Claude, author of

The Cost of Catholic Parishes and Schools

, lamented that a primary source of revenue, weekly collections, are not better accounted for.

"The largest church in the world has no definitive data on its American collection yield," he wrote. "A complete portrait of church financials would include all revenues and expenses. We have only a portion."

He, and other researchers, have estimated that Sunday collections and other parish revenues in the U.S. approach $8 billion a year.

Also in the equation is the estimated metric ton of gold owned by the Vatican. At current prices, that would amount to nearly $53 billion.


With thousands of members attending services each week and media empires reaching far beyond church land, so-called megachurches have become a North American phenomenon.

According to the

Hartford Institute for Religion Research

, Megachurches (defined as having 2,000 or more members), account for roughly 10% of the 56 million Americans worshipping at Protestant churches and "remain one of the most robust religious organizational expressions within North America."

A 2011 study of 336 megachurches (out of an estimated 1,600) found that "despite occasional news reports that large churches are a boomer phenomenon or are now in decline," there remains a steady growth rate that averages 8% per year for the past five years. The average attendance for these churches grew from 2,604 in 2005 to 3,597 in 2010.

Researchers found that, even throughout the recession, "the vast majority of these churches report that they do not have serious financial struggles." Only 6% said their church's financial health is in some or serious difficulty. "In all, different megachurches were affected by the recession in a variety of ways, much like the entire country," the study found. "Some were hurt considerably while others flourished."

Among the largest churches in the nation, according to the Hartford Institute for Religious Research, are Lakewood Church in Houston (with an average attendance of 43,500), LifeChurch in Edmond, Okla. (26,776), Fellowship Church in Grapevine, Texas (24,000), Willow Creek Community Church in South Barrington, Ill. (23,400), and North Point Community Church in Alpharetta, Ga. (23,377)

Despite the overall findings by the Hartford Institute, even the faith and generosity of a congregation isn't always enough to shield a megachurch from economic woes.

One of the largest churches in California, Orange County's 10,000-member Crystal Cathedral founded by televangelist Robert H. Schuller Sr., is facing a financial crisis that has split its flock and splintered leadership over issues of what some have deemed excessive compensation. (Not easing tensions was an

email in November

asking members to donate meals for the ailing wife of its founder, a request that directed donations to be placed near its landmark Tower of Hope, where they could be picked up by one of the family's limousine drivers.)

From 2008-09, amid the recession and its corresponding drop-off in donations, the church had expected as much as an 18% drop in revenue. The reality was far worse: a 27% plunge in annual revenue, to $22 million from $30 million.

To remedy the shortfall, the church has been selling off 170 acres of real estate and trimming staff. In November, the bankrupt church was forced to sell its cathedral and the Tower of Hope to the Catholic Church for $57.5 million. Church debt, before that sale, was estimated as high as $100 million.

The problems faced by Crystal Cathedral illustrate how much money megachurches can collect and spend.

In 2007, Sen. Charles Grassley (R-Iowa), then a ranking member of the Senate Finance Committee, tackled the issue of whether the massive budgets and corresponding compensation at megachurches bore added scrutiny given their tax-exempt status. Many of these churches decline to offer full, transparent documentation of their finances.

Grassley was openly critical of the luxury cars, exotic trips and extravagant homes owned by some pastors. Among the examples he cited from various churches: a $20 million Cessna; a $23,000 commode; a $1.4 million estate "gifted" to one pastor; and a Bentley convertible bought for another.

The inquiry netted only the cooperation of two ministries, and the investigation of more than three years was ultimately positioned as no more than a "comprehensive discussion" intended to foster "self-reform."

Examples such as Crystal Cathedral's bankruptcy and the smattering of potential abuses singled out by Grassley illustrate the vast revenues that can be earned by megachurches, which can count on not just in-person donations but sales generated by their media outreach. The Hartford Institute has estimated that an average megachurch can generate as much as $6.5 million a year. Although some of these churches make a solid effort to disclose financial information, many do not.

Lakewood Church, run by pastor Joel Osteen, is believed to have an annual budget as high as $80 million. How that budget breaks down in terms of expenses and surplus isn't a matter of public record.

The Web site

Ministry Watch

evaluates churches based on their financial transparency. Each year it produces a list of 30 ministries that "engage in questionable practices that should cause donors to pause before giving." In including Lakewood Church, it is critical of the fact that it fails to post audited financial statements online and refused to disclose that information on request.

More open and accessible are the 1,600 churches that work with the

Evangelical Council for Financial Accountability

, "an accreditation agency dedicated to helping Christian ministries earn the public's trust." Collectively, these organizations represent nearly $20 billion in annual revenue.


When it comes to secrecy, even the Catholic Church and LDS have nothing on the Church of Scientology, the religion founded by


author and science fiction writer L. Ron Hubbard.

With a growing number of Hollywood elite joining its ranks (among them, infamously, Tom Cruise and John Travolta) and an ever-expanding global footprint, one can imagine church money keeps multiplying. How much money? Church leaders won't say and have proven quick to sue or attempt to discredit anyone who tries to.

The last time the church opened its books was in 1993, during a lengthy process with the IRS that ultimately allowed its tax-exempt status.

At that time, it revealed assets of about $400 million (including a 440-foot cruise ship) and nearly $300 million a year in revenue from books, counseling and assorted investments.

Since then, its assets have undoubtedly grown under the legal shadow of its tax-exemption.

A 2008 investigative report by


tried to piece together the financial information that has leaked out. Among the revenue streams, as much as $100 million in personal donations (Nancy Cartwright, the voice of Bart Simpson, alone made a $7.5 million donation in 2007) and $400 million in membership fees at its centers. In total, it gave a guess that the church reaps as much as $550 million a year in revenue.

Evangelical Lutheran Church

A breath of fresh air after the secrecy of some of the other churches we've looked at, the Evangelical Lutheran Church in America posts all of its financial information online.

Unlike the other churches we've singled out, its revenue stream is considerably more modest.

According to

financial documents posted online

for fiscal year 2010, it collected roughly $66 million in revenue, from which $64 million was earmarked for expenses.

That money, according to a Treasurer's report, will help build 60 congregations, maintain 163 existing congregations, support 26 colleges and eight seminaries and fund 240 missionaries in 50 countries.

-- Written by Joe Mont in Boston.

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