Criticism
Critics claim that the Church of Jesus Christ of Latter-day Saints, as a corporate entity, has an interest in businesse, such as tobacco or alcoholic beverage companies, that are not consistent with its stated purposes..
Response
The Church sometimes receives donations of stocks and bonds. It is the Church's practice to automatically liquidate all stocks/bonds provided to the donations in kind office as soon as they can be sold. Any stock donations made to the Church are never held by the Church or its corporations, but are converted into cash and then used for Church purposes.
Tax Benefits for Donors
The question could be asked why a donor doesn't just sell the stocks or bonds, and then donate the cash to the Church.
The donor chooses this method of donating because of the favorable tax treatment the donor receives. In the United States , the IRS code allows for an individual to donate the stock to a non-profit organization, such as the Church, and receive a tax deductible donation credit against their taxes based on the full value of the holding without having to also recognize the gain and be taxed on the gain.
For example, if a person bought stock for $10 and donates when it is worth $25, that individual gets to deduct the entire $25 from his taxable earnings. If a person had sold the stock and donated the money, he would have had to realize a gain of $15 and would have paid taxes on that before receiving credit for the donation. The tax would offset the benefit for donating.
As can be seen, when one can donate without selling, one essentially gets the best of both worlds, and it can result in substantial tax savings for the individual with no loss to the charity to which one is donating. For this reason, estates that make sizeable donations to the Church usually do so with long term capital holdings, like stock, in order to realize the greatest tax benefits. This means that such donations are a very common event in Church and other tax favored organization finances.
Mutual Funds
Often, donated stocks will be in mutual funds. These funds include many companies whose products are not in keeping with Church standards. Furthermore, stock index funds contain investments in all the stocks in that index (such as the Dow Jones Industrials, the S&P 500, and the Willshire 5000). Stock index funds also includes companies in industries inconsistent with the Church position.
Significant shareholders
The financial data for every publicly-traded corporation (i.e., a corporation with stock for sale at a stock exchange) is held in the Edgar data base of the Securities and Exchange Commission. This data is publically available on-line, at such sites as:
This data includes a list of "significant shareholders," which are typically those who own more than 5% of the total stock price. Any critic who claims the Church has on-going interest in a company should prove the claim by providing data showing that the Church indeed holds significant interest.
There have thus been instances in the past where reportable donations were made (more than 5%), and when the Church received and then liquidated the holdings as a matter of public record. Yet, this does not mean that the Church purchased stock in these companies, or had continued to profit from stock held in such companies. The Church merely received a donation, which it liquidated in accordance with its standard financial practices.
Summary
It may be technically true that for a few minutes, hours, or days, the Church has been at least part owner of some companies whose products or behavior do not match the Church's interests or standards. However, such claims as used by critics are misleading, since the Church did not seek interest in any such company, did not purchase any stocks or bonds in those companies, and sold its interest as soon as possible. It is not reponsible to criticize the Church for doing so.
The Church does not refuse to accept any lawfully traded security based on the products they sell, because all such donations are treated equally—they are sold.
For more information
The Church has what is called the "donations in kind" office that manages issues related to real estate, stocks and bonds, and other "non-cash" contributions. Interested parties can call Church headquarters and ask to be connected to this department, which will provide frank information about the Church's policy in this area.
The full wiki article is found by clicking here.
If you would like to comment on these articles, or request additional topics, you can contact Carolyn here: Just check the box for the Meridian Article Editor.
