Question: Does the Church of Jesus Christ of Latter-day Saints own stock in businesses that are not consistent with the Church's standards?

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

Some claim that the Church, as a corporate entity, controls business properties that are not consistent with its stated purposes. Examples include:

claims that the Church owns controlling stock in the Coca-Cola company
claims that the Church owns stock in tobacco companies
claims that the Church owns stock in alcohol companies

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 does not match the Church's interests or standards. However, such claims as used by critics are designed to mislead, since the Church did not seek interest in any such company, and sells its interest as soon as it acquires it.

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.

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

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.

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.

The church receives a lot of these types of donations because of the favorable tax treatment the donor receives. In the United States, the IRS code allows for an individual who has a long term potential capital gain in a stock (i.e., they have owned it for more than 1 year) to donate the stock to a non-profit organization 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 you bought stock for $10 and donate when it is worth $110, you get to remove $110 from your taxable earnings (which at the 33% tax bracket benefits you with not paying $36 in taxes). If you had sold the stock and donated the money, you would have had to realize a gain of $100 and had to pay taxes on that ($33), and then you would get the credit for the donation which would offset the gain.

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, 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 finances.

Because the Church can neither control which stocks are donated, nor which stocks are in mutual fund shares that are donated, there have doubtless been times when interest in companies whose products are not in keeping with Church standards have been donated. 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). Usually, this includes companies in industries inconsistent with the Church position.

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 >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 (>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.

Notes

Question: Does the Church of Jesus Christ of Latter-day Saints own stock in businesses that are not consistent with the Church's standards?