How rich Latter-day Saints use their own nonprofits to pay tithing and other church contributions

(Photo illustration by Francisco Kjolseth | The Salt Lake Tribune) Wealthy members of The Church of Jesus Christ of Latter-day Saints have established charities through which they deliver their tithings and other donations to the church. The arrangement has delivered tens of millions of dollars to the church while helping the members avoid paying capital gains and other taxes. In many cases, records show, the charities' primary or sole function is to pay the LDS Church.

In 2017, the T & A Wright Family Foundation sent $26,200 to The Church of Jesus Christ of Latter-day Saints.

The nonprofit is operated out of the Heber City home of Tom and Amanda Wright. The contribution to the church was the biggest donation the foundation made that year, according to the organization’s tax return. The standardized IRS form asked the foundation to describe the purpose of the donation.

The tax preparer wrote, “TITHING.”

Other Latter-day Saints give to their church through foundations, too, and sometimes in larger amounts. A Salt Lake Tribune review of tax filings available on the website Grantmakers.io found nonprofits gave $89 million to the Utah-based faith or its philanthropic arms from 2010 through 2018.

More money than that likely flowed through those private foundations. Grantmakers.io did not have 2018 tax filings for many of the organizations that gave in previous years. The $89 million also does not include donations to the church’s colleges or universities.

(Francisco Kjolseth | The Salt Lake Tribune) President Russell M. Nelson acknowledges the crowd as he and his wife, Sister Wendy Nelson, exit at the conclusion of the 189th twice-annual General Conference of The Church of Jesus Christ of Latter-day Saints at the Conference Center in Salt Lake City on Sunday, Oct. 6, 2019. At left is President Dallin H. Oaks, first counselor in the First Presidency of The Church of Jesus Christ of Latter-day Saints

Of the 253 nonprofits that contributed toward the $89 million, almost all of them are registered with the IRS as private foundations — a legal distinction from public charities. The Wrights’ foundation is typical. It was incorporated by family members who also serve as the benefactors and the trustees. They decide where the money goes.

Recent leaks by the whistleblowing twin brothers David and Lars Nielsen — the former used to work for the faith’s nonprofit investment arm — say the LDS Church collects $6 billion to $7 billion annually in tithing. Top church leaders who oversee those funds recently told The Wall Street Journal that the faith’s annual expenditures total about $5 billion.

So those donations from private foundations would be a fraction of that intake.

There’s nothing illegal about a foundation giving to a church, nor are Mormons the only religious followers making use of the tax code when doing so. There are family foundations that give to other faith traditions, too.

Yet the tax records provide a glimpse into how a number of wealthy Latter-day Saints give to their church:

• Of those 253 nonprofits, many have been created solely or primarily to benefit the LDS Church. One out of every eight donated only to the denomination. For a bigger segment of those foundations, the church was the largest beneficiary.

• The single biggest gift to the church was $4,795,000 given in 2014 by the Frank L. Vandersloot Foundation of Idaho Falls. But handfuls of foundations give just a few hundred dollars at a time. In 2016, one Sandy-based family foundation made a $100 “FAST OFFERING,” a monthly practice among Latter-day Saints in which members go without eating and give the money saved to the church to help the poor.

• A few foundations label their gifts as tithes or offerings. Other donations are recorded as being for the church’s humanitarian or missionary programs. But most contributions are labeled on IRS forms as something like “religious” or “general support.”

• Most of the donations go to church headquarters in Salt Lake City, but a few of the faithful strive to keep their tithing local. The tax records show foundations giving to Latter-day Saint congregations from Charleston, S.C., to Valencia, Calif.

Why donate this way?

(Rick Egan | The Salt Lake Tribune) Provo accountant Jeff Dalebout in his office, Monday, Feb. 3, 2020.

The rich have long used private foundations as a way to reduce their taxes while funding causes. Donors can establish a foundation, transfer stock to it and sell that stock without having to pay the capital gains. The foundation might have to pay some income tax if it has revenue from activities not related to its mission, such as making investments in businesses.

The stock proceeds stay with the foundation. The donors can pay themselves or other family members to operate the foundation.

The LDS Church has courted this method of donation. A church website offers assistance for families wanting to establish a private foundation.

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Paying your tithing through a foundation provides no benefit to the church, said Jeff Dalebout, a Provo accountant whose office prepares taxes for several foundations and other 501(c)(3) organizations. Nor do individuals need their own foundation to tap tax savings. Tithes to a church and gifts to a private foundation alike can be written off on personal income taxes.

Dalebout said the foundations help wealthy families plan their giving over a span of years.

He cites the example of someone who sells a company and receives $10 million:

Traditional Latter-day Saint tithing would mean the now-former-business owner would pay the church 10% of that amount, or $1 million. But the tithe payer wouldn’t expect to earn $10 million every year, Dalebout explained, and might want to spread the offering over a span.

By putting the money into a family foundation, the member can receive the tax write-off immediately and still have some control over his or her money. Besides, in the foundation, the money can accrue interest so there’s more to give later.

“Foundations and 501(c)(3) organizations can be moneymakers," Dalebout said. "They can make a lot of money.”

Sam Brunson, a Latter-day Saint law professor at Loyola University Chicago who studies the tax code and religions, said private foundations can help the wealthy organize their giving into one account.

“If you’re planning on paying [the LDS Church] 10% annually, the private foundation doesn’t provide real tax advantages,” Brunson said, “but the convenience advantage is still there.”

What is a ‘full tithing’

(Francisco Kjolseth | The Salt Lake Tribune) People walk by "Jesus Christ Visits the Americans," by artist John Scott at the Conference Center during the 189th twice-annual General Conference of The Church of Jesus Christ of Latter-day Saints in Salt Lake City on Sunday, Oct. 6, 2019.

David King, an assistant professor who studies religions and philanthropy at the Indiana University Lilly Family School of Philanthropy, reviewed the data collected by The Tribune. He noted that it was a bit unusual to see such a high percentage of family foundations giving only to the LDS Church. Most families, he said, want to support a variety of causes.

King said it’s also becoming increasingly unusual for donors to give for “general support.” Most benefactors have specific causes they want to finance.

“There is a lot more trust in the [LDS] Church,” King said, “that they would use the money in the right way.”

A recent Tribune-Suffolk University poll may reflect that trust. Nearly 6 in 10 “very active” Latter-day Saints in Utah (57%) say they would oppose a measure requiring churches to publicly disclose their finances — a view far different than members of any other faith group surveyed.

The governing First Presidency, Quorum of the Twelve Apostles and Presiding Bishopric decide how tithing funds are used, according to the faith’s website. Members can steer their donations to tithing and other church programs such as humanitarian activities. Several years ago, the church stated that “reasonable efforts will be made globally to use donations as designated,” but added that “all donations become the church’s property and will be used at the church’s sole discretion to further the church’s overall mission.”

Church spokesman Doug Andersen said the policies don’t change just because the tithe or gift may be large.

“All donations," Andersen said in a written statement, "no matter the value, are considered sacred, are treated equally, and how those funds are spent remains the purview of three senior councils of the church.”

Some inside and outside the church have wondered if recent news stories about the faith having amassed a $100 billion “rainy day” account would prompt members, perhaps even affluent ones, to pull back on tithing or other contributions.

(Trent Nelson | The Salt Lake Tribune) Renovation work continues on Mormonism’s iconic Salt Lake Temple in Salt Lake City on Thursday, Feb. 20, 2020.

The top executive over those reserves told The Wall Street Journal recently that high-level church leaders tried to keep the size of that account under wraps for that very reason.

“They never wanted to be in a position where people felt like, you know, they shouldn’t make a contribution,” Roger Clarke, head of Ensign Peak Advisors, told the newspaper.

The Presiding Bishopric, the ecclesiastical leaders over the church’s vast financial, real estate, investment and charitable operations, told the church-owned Deseret News recently that tithing is a principle of faith, not finances. Members pay to follow scriptural commands that can bring spiritual and temporal blessings.

The foundation tax records also illustrate a misconception about Mormon tithing — that all the faithful pay 10% ... religiously.

Some wrongly believe that Latter-day Saints are supposed to pay that rate right after the income arrives. But members don’t have to show their pay stubs or bank ledgers. In fact, the church has stated that members should pay a tenth of all their income “annually.”

Local bishops — lay leaders in the church — typically ask their congregants during a yearly interview whether they pay a “full tithing” (a requirement to gain entry into Latter-day Saint temples and participate in the faith’s highest ordinances such as eternal marriage).

“It’s 100% on the honor system,” Brunson said.

What constitutes a full tithing is open to interpretation, Dalebout said. Is it 10% before taxes or after?

The First Presidency has taken no official position on that question. “The way you define your income, and consequently your tithing, is a matter between you and the Lord,” the church’s website states. “Prayerfully seek the Lord’s guidance on issues like taxes, gifts, scholarships, and other matters to determine what qualifies as a full tithe.”

What about assets like homes or businesses that have operating costs? Should you deduct expenses before paying a tithe on their sale? Here again, Dalebout said, church leaders’ guidelines are vague. “They don’t really say what you should pay on and what you shouldn’t pay on.”

Giving records

(Trent Nelson | The Salt Lake Tribune) Larry H. Miller Group of Companies owner Gail Miller speaks as the Utah Jazz and NBA announce that Salt Lake City will host the 2023 NBA All-Star Game at a news conference on Wednesday Oct. 23, 2019.

The T & A Wright Family Foundation was established about 20 years ago. In an interview, Tom Wright said a tax planner suggested creating it. Wright, a real estate agent, said he and his family planned to give to a variety of causes.

The tax planner pointed out tithing could be paid from the foundation, too.

“The predominant disbursements in the last few years,” he said, “have been as tithing to the church.”

Wright said he has not kept up with transferring money to the foundation. He said he and his family have been donating to causes, including a youth mentoring program in Wasatch County, and to their church both through the foundation and out of pocket.

“I am a full tithe payer,” Wright said, “and I either pay through [the foundation] or one of my other accounts.”

Not every rich Latter-day Saint has a private foundation to make contributions to the church. Those that do include portions of the Huntsman family.

The Huntsman Foundation was started by Jon Huntsman Sr. and is best known for financing the cancer center that carries his name. A son, Paul Huntsman, owner and publisher of The Tribune, is listed as a trustee for the foundation, which gave $1 million to the church between 2010 and 2018, the tax records show.

The biggest foundation contributor in those years was the Rocky Woods Charitable Foundation of Medfield, Mass. It gave $12.2 million to the LDS Church and its philanthropic arms. The foundation’s president is Bryan Ward, an investor. He did not return messages seeking comment.

The Larry H. and Gail Miller Family Foundation has given the church $5.6 million during that time frame, the tax records show. The family owns a slew of car dealerships, movie theaters, the Utah Jazz and Vivint Smart Home Arena.

In an email, Amanda Covington, a spokeswoman for the Larry H. Miller Group of Cos., said the foundation has not contributed tithing to the LDS Church.

“The Miller Family Foundation contributions to The Church of Jesus Christ of Latter-day Saints are to support the research for the Joseph Smith Papers project, not tithing,” Covington wrote.

That massive undertaking has researched and published manuscripts written by or at the direction of Mormonism’s founder. The Miller Family Foundation’s tax records show it gave $2.34 million toward the project. Another $3.3 million in contributions were made to the Corporation of the President of The Church of Jesus Christ of Latter-day Saints and labeled as “GENERAL FINANCIAL SUPPORT.”

(Trent Nelson | The Salt Lake Tribune) Senator Mitt Romney meets with Weber County Comissioners in Ogden to discuss the ongoing government shutdown on Friday Jan. 18, 2019.

Two sons of the late businessman James LeVoy Sorenson have their own foundations, which have contributed a combined $5.8 million to the church. Former Utah Gov. Mike Leavitt and his wife, Jacalyn, have used their foundation in Cedar City to give nearly $1 million.

The most famous Latter-day Saint in Washington, D.C., Mitt Romney, has used his foundation to give to his church, too. The Romney Foundation for Children gave $890,000 from 2010 to 2018, according to tax records.