I've known for a long time that what under_believer says about the Watchtower's Qucik Build scam is true. However, I wondered what would happen if a local Congregation went to a bank and got a commercial loan (I didn't know it was forbidden to do that). Even so, it would be interesting to see what would hasppen if a Congregation raised enough money to build a KH without WT money. Does anyone think the Congregation would have the nerve to insist that it owned the hall & not the org?
Let's Review: How the Watchtower Society Uses Quickbuilds to Make More $$$
by under_believer 19 Replies latest jw friends
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Zapper_1
I guess I should have read the entire thread before posting.
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Amazing
Hi Under,
Amazing, thank you for the corrections, but I believe your information may be a decade or so out of date. I don't want to outright disagree, however, so I will try to get some more information on this before I speak further.
You may be right about my information being out of date somewhat. However, I have followed this issue since I left the organization, and their interest rate has fluctuated from 3% to 6% and then back again. If there is a change, it is very new. As for legal interest in the KH properties, I take my cue from working in real estate law and practices. If the Society increased their ownership rights, it would still not do them much good in the long run, and I am not sure just what they would accomplish.
On the first point, the fact that the Society charges interest at all is bad in my book, but the fact that they sometimes (or often) profit is even worse. I will see if I can find some information about loan rates used locally of late. Nevertheless, the point I made about disallowing other lenders is true and stands--you have to ask yourself why this is the case. Perhaps I see this effective loan monopoly, enforced by congregational sanction, as being more sinister than you do.
Initially, when I took over handling the mortgage payments to the Society, I was surprised to learn that they charged interest ... and it bothered me too. However, there are actually legitimate and legal reasons for do so. Inflation in the 1970s was about 12%, but the Society was only charging 3%, so they were losing money. The interest was originally set up just to keep pace with the historical inflation rate of 3%, which is what the inflation rate is today. That is break-even. Secondly, the original Kingdom Hall fund was a private program donated by some very wealthy JWs when they died. Their will stipulated that a modest rate be charged ( I don't recall if it stipulated 3%.) So, when the Society took over management of the fund, that have to, by law, agree to and charge some kind of interest. JWs, and many ex-JWs (myself included) felt that interest is wrong because the Bible says to help a brother in need without charging interest. But, examination of the text (I think it is in Matthew ... I do not have access to a Bible right now) is really talking about helping someone down and out on their luck. Whreas, building a place to meet is not absolutely necessary. As noted above, I changed my view because of working with money and real estate and observing how a 3% charge is very modest ... and not in the profiteering category.
Secondly, I was told by a local elder who was very close to the process that the Society continues to own our Kingdom Hall, held in trust, even after the loan is completed. Maybe the policy has changed since your time? Even if what you say is true, and the "decline clause" is the only way the Society can get their mitts on the Hall, you have to admit that the Society in the US is in decline and the scenario you outline (either widespread apostasy or, more likely, congregational desertion) is likely to be more and more common as time goes on, meaning the Society will come into direct possession of more and more Kingdom Halls.
Yes, the Society could have strengthened their legal rights in Kingdom Hall properties beyond simply taking it back in the event of the demise of the congregation. But ... if they become the legal owner, with all rights and responsibilities, then they cannot issue a mortgage on the property because there is no borrower or buyer. The congregation has to be the borrower-buyer and own the property. Another way to look at it is that if the Society now "owns" the Kingdom Halls, they can only charge rent to the congregation ... but not a mortgage. A mortgage contract stipulates that the one making the loan payments becomes the owner upon repayment of the loan. (A Trust Deed on the other hand stipulates that the borrower already owns the property, and the loan note is merely secured by the property.) California and Oregon, for example, are Trust Deed states. Whereas Illinois is still a mortgage state. Nonetheless, whether the congregation has a trust deed or a mortgage, they are legally the owners, buyers, and borrowers. So, upon the sale of the Kingdom Hall to buy or build another, the congregation would always own the net equity to be used toward a new purchase. I agree with you about the conitnued decline of JWs. If the JWs start to have significant decreases, the Society will end up owning and selling a lot of Kingdom Halls and will likely get the proceeds if the original congregation that bought the Hall and paid off the Mortgage or Trust Deed have demised. But, what will they do with all that profit? Who in the Society will benefit? Will the GB and the top executives and lawyers start taking trips to Las Vegas, Tahiti, or the Bahammas?Third, regardless of the original reason behind the quickbuild program, I believe this is the reason it exists today. I've seen remodel after remodel--in my area, there is more than one going on in my circuit at any given time. My father in law, heavily involved with the program, has over the last 30 years worked on more than 150 Regional Building Committee projects--and he passed on quite a few. In many cases the many brothers did not feel their Hall even needed upgrading, they felt it was immodest--but they were overruled by the elder body and a rubber stamp "yes" vote, the reasoning being that we need to put forth a slick, beautiful effort in order to win converts.
You may be correct that the reason for the newer Kingdom Halls and Upgrades is for show ... that is, afterall, the nature of the Watchtower Society ... to be ever-concerned with their marketing image. Or, it could be that they have so much money, they have to find ways to spend it to keep looking like a religion, rather than a profit-making venture. The Society does little with charity outside the pathetic stippends given to their Missionaries, Pioneers, Circuit Overseers, Bethel workers, etc. So, after publishing and printing billions of pieces of literature, I guess building projects are next. A lot of tax-free equity is held in Watchtower owned assets, like Assembly Halls, their factories, farms, and the University at Patterson. Perhaps in a poetic sense, it is all stored up for the victims of various forms of abuse who may prevail in current litiagtion against the Society. The Society has moved money around the world ... and I suspect it is not for charitable reasons. Time will tell. I look forward to your postings updating and correcting information so we can see what the Watchtower beats is doing these days. Jim Whitney
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Fangorn
Deleted the story is absolutely true. You can drive by the old Kingdom Hall in Bonham, Texas and see it. The only thing wrong with the story as you told it is that there was a whole lot really vicious back and forth conflict before the issue was resolved in favor of the local congregation. The kingpin in the whole dealing was the local presiding overseer whom many in the Congregation worked for and he just decided he wanted to be the real boss one day. From the looks of the old Hall they haven't faired all that well.
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Bangalore
Great info in this thread.
Bangalore
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Mad Sweeney
A lot of this info is only partly correct and up to date.
In the USA, the Borg no longer charges interest on its loans. That part of the money-making scheme has been transformed. Because the congregations do not pay interest, their loans are often paid off fairly quickly. Then what? Then many times the congregation will pass a resolution to KEEP PAYING the Borg some sort of regular monthly "donation" since there is no good reason for the rank and file to stop donating and start saving money for their own family. One congregation I was in (and these numbers are guesstimates from memory) paid off its loan, which had been something like $850 a month, then agreed to keep paying the society $500 a month as a donation to the work and sold it to the congregation as doing the right thing and saving $350 a month off what they used to pay.
Also, the part on the Watchtower holding the deed is a bit confusing maybe, but it really is pretty simple. The congregation owns the Kingdom Hall as long as they exist as a JW congregation wanting to use it as a Kingdom Hall. If the congregation dissolves, then the Watchtower Society owns the Kingdom Hall and all other congregation assets. So how does this benefit the WTS? Example.
A decent-sized town has, for example, five congregations in it with two Kingdom Halls (call the congs North, South, East, West, and Spanish). Thanks to JWN, jwfacts.com, and Combating Cult Mind Control there are fewer than 20 elders and 12 MS left to handle all those congregations. Also, neither of the Kingdom Halls are very new and one of them was built back in the 1980s.
So the CO decides the area needs a Borg revitalization project. He forms a plan. Find a relatively central location and build a double-hall on it. Take the four English congregations and merge them into three, and split the Spanish into two congs.
What does this accomplish? Well, if in this restructuring the congregation that owned one of the previous KHs dissolves, what happens to their property? That's right, the Watchtower owns it, sells it, and pockets the money, often loaning it back to the congregation(s) for the building of their new KH.
And the cycle continues...
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dropoffyourkeylee
I'm sure this has been discussed elsewhere, but about 1-2 years ago the Society stopped charging interest on KH loans in the US. I expect there was a legal or tax reason for the discontinuance of interest, but have never heard the real reason.
The interest rate charged was small, about equal to the inflation rate, so it cannot be construed as income for the society. If a company has, say, 100k loaned out at no interest, they are actually losing money, as the value of the outstanding loan amount is eroding due to inflation. This is basic finance.
I do believe that the Society is in the business of managing real estate (both KH and assembly halls, as well as Bethel buildings) and this is a major source of their funding. ie: re-model two existing halls, wait a few years, sell both and build a larger centrally located hall and make the congregations double up. There is nothing wrong with an organization raising funds, but the way that it is done seems deceptive.
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exwhyzee
Our hall was originally built in the 60's, It was a beautiful PanAbode log cabin style of building nestled in the forrest here in the Pacific Northwest. The inside had arched laminated beams holding up a soaring cedar ceiling. From the inside looking up at the ceiling it always reminded me of a wooden ship (the ark) turned upside down. Visiting Witnesses used to be quite impressed by our hall because it was unique. In the 90's they had a Quick Remodel and of course the Society required it to look like all the new cookie cutter halls so the beautiful cedar beams and walls were covered with drywall and a low suspended ceiling was installed and the nice cedar framed windows taken out. By the time we paid off the loan, the town had experienced a boom and the Kingdom hall was now surrounded by shopping and businesses. The land the Hall was on was now worth millions. We were able to purchase a new piece of forrested land and build a new hall with an appartment and have money left over. It was sad to see the old hall torn down and see those arched Beams exposed like a Cedar Skeleton.The left over money was sent to the society instead of being kept as a fund for future maintenance or building expansion. My question is if a Congregation did dissolve, how could they fairly distribute the funds ( our Hall was worth milions) among those that contributed. There would be no way of doing this without knowing how much each one gave, who they were and also how to distribute it among members who contributed but moved away or died. It seems like the intent of the original contributers was to furthur Kingdom Intrests so it's only logical that the Society would receive the proceeds. The fact that they made a prophit is a bonus to their original goal.
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Balaamsass
Inflation has little to do with profit on loans. Cost of funds does. WTBTS cost is almost 0. Therefore Internal rate of return can be infinate.
BIG $$$. Remember WRIGLY Field in Chicago, and the GUM KING. Pennies, even on a stick of GUM add up. 7 million+ x anything is a lot of bucks....when your capital and LABOR is DONATED.