FROM THE UK CHARITY COMMISSION’S WEBSITE:
The 2009 Financial Report for Watch Tower Bible and Tract Society of Britain and for IBSA.
(In addition, interesting comments regarding the Report made by three former Jehovah’s Witnesses.)
Accounts for 31 Aug 2009:
received 08 Apr 2010
Annual Return for 31 Aug 2009:
received 08 Apr 2010
LINKS TO SEE CHARITY COMMISSION REPORTS:
COMMENTS FROM AN INSIDER IN THE UK
The figure for investments is laughable. Brooklyn has a team working with investments for
the US, and the Treasury Department in the UK has three senior brothers, with associated
assistants, working fulltime on investments in the FTSE 100, a figure of £1.2m (approx $2m,
I think, at current exchange rates) - I cannot see how that is a plausible figure. On the days
following the Lehman Brothers crisis, these same brothers and members of their teams talked
about the extremely deleterious effect that the liquidity crisis was having on the UK branch
investments. Considering the sums involved, $2m for the UK branch is......, let me be charitable
- the figure supplied by the branch is questionable. Certainly, the impression I was given was
the figures involved were far higher than that. Perhaps the brothers involved were exaggerating
the importance and scale of their jobs - but I doubt it.
The £47m long-term investments make sense only if it does not include the property values of
the facilities they own. I am not sure that legally property values must be included, but to be
clear, the properties, as CURRENTLY OWNED, are at least the following:
Watchtower House, on The Ridgeway comprising:
an accommodation section housing approx 200 people
a major kitchen and dining room seating approx the same number
the reception facilities
a large library
2 small gym rooms
a number of function rooms
an maintenance department
accumulated office space
It is estimated that the value of Watchtower House, land only, to be upwards of an absolute
minimum of £15m, taking into account its prime North London location (a leafy suburb).
Across the road, IBSA House is the industrial site. With its factory space, offices, garages,
electrical departments, and all the space that takes up, there is at least a £15m resale value on
the land (and that is a very, very conservative estimate).
Added to this is the laundry facilities at Manor Point, some miles from the WT House facility -
this is at least a £10-£15m plot.
The real value is the residential facilities, it is in New York. Each flat the Branch has is worth at
least £250,000 ($300,000). The quality of the building, and the various locations mean the
Branch is very, very wealthy. All the figures are at the lower range of the sale scale.
On the Ridgeway itself, the Branch owns at least 4 large houses, converted into flats -
considering each flat, the value of that is around £5-7m. The flats a little distance removed from
WT - at least £15m for any developer. And out at Friern Barnet, where the majority of
the Bethelites live, a single block is worth at least £20m - and there are three of them. Some
surveyors offered £50m per block at some point - and that is likely to be accurate. The Branch
was discussing a move to Milton Keynes, financed primarily by its own assets - that is, a move
to another city, lock stock and barrel. The Branch has considerable wealth to even consider
making such a move.
In property, it is estimated at the lower range of the scale that the Branch owns some £120m
($190m) of property, without taking into account Mill Hill Kingdom Hall, or the North London
Assembly Hall (which combined is at least another £15-20m). This can not be found in this
report. The entire assets value is around £78m - which is a significant undervalue. However, I
believe that that £11m for "own use" is comprised of the truck and machine fleet.
The employees and volunteers spending is interesting. Considering there are around
500 Bethelites paid £80 per month, we are talking a figure of around £480,000 ($600,000) per
annum, without the travel expenses, which is probably likely to add another $150,000
maximum. So, an accumulated bill of $750,000 for the "volunteers" which means that another
£23m was spent on -
(all of which are extortionate in London, and the Branch has grumbled about for years!)
While it might seem that it would be impossible that the branch would calculate that
under "charitable spending," it is entirely likely, as part the "operating costs" of the branch.
Of course, I don't want to cast any aspersions on the branch - I am sure that they are complying
with every legal requirement that they must, whilst taking advantage of every single tax loophole
they can. As one brother on the Branch Committee remarked - "if it weren't for the tax laws
the Labour (now removed) government had brought in for charities, we would be paying far
higher charges on all our properties and donations."
The Branch has not included the property values at all - there is at least one more
building I have not taken into account, and that is worth at least £20m. There is also
the Edgeware Kingdom Hall complex in London, and a number of high-value Assembly Halls
around the UK. The more I consider it, the more I believe the property values are not included
Considering that, the long-term investments may be made up of loans which the Branch gives
to congregations to buy Kingdom Halls - in London, at least one congregation asked the Branch
for upwards of £2m. Spaced around the country, the loans will take up a significant proportion
of the "long-term investments" - if there is a small interest charge, which I believe there is, that
might qualify it as an investment in the UK. There are also the maintenance costs of the various
Assembly Halls that the Branch own, and the rental of the large football and rugby stadiums.
There is also the fact that the Britain Branch, to a large degree, finances work in Pakistan, Iraq,
and the Arab countries. This is a significant expenditure.
MORE COMMENTS FROM ENGLAND
see links above
It would be useful to open the two documents and links side by side as they are in identical
format and compare the exact wording. All figures are in GBP - it's confusing mixing in USD
Some points for comment:
• The respective countries of operation - why does IBSA include Russia? And WTBTS
includes the USA?
• Charity Aims - IBSA point 5 "purchasing and distributing" versus WTBTS point
2 "producing and distributing"
Both charities make a point of noting they do not engage in fundraising activities.
IBSA received 4.5m for the provision of accommodation. Coincidentally they also list
4.5m income from charitable activities and other income. WTBTS listed a cost of 4.6m
for accommodation etc. It seems that IBSA owns the properties and WTBTS pays to use them,
and that the rental income from WTBTS = IBSA 'charitable activity.' IBSA say they work closely
with the GB relating to overseas needs. They list about 60m of assets and 11.5m liabilities -
possibly KH and AH construction loans? IBSA spent 1.5m more than it received.
WTBTS donated GBP 3.9m in overseas literature 'value' - however 'value' is calculated??
- Out of a total of GBP 9.2m money sent overseas - page 5. What is the unexplained GBP
5.3m difference? WTBTS says "reserves on hand at the end of the year were equivalent to
over 11 month’s average expenditure." Spending in round figures is 2m per month so "on
hand" = 24m. Investment income was 1.24m so just over 5% return - not bad considering
overall market chaos and money in the bank probably returns less than 1% - so some active
management going on there. They list about 78m of assets and 30m liabilities - possibly KH
and AH construction loans? They have 0 employees or volunteers. WTBTS retained 3.37m over
what it spent.
And I could go on. My point is that the relationship between the two charities is of interest
and ultimately how much money is coming in - they have a combined 'voluntary' income of
21m and investment income of 1.25m. The figures get cloudy for me once we enter the realm
of 'charitable activity.’
COMMENTS BY ANOTHER ENGLISHMAN
From a layman’s knowledge of accounts a few observations:
It is assumed that the reason that the two charities are separated is to "ring-fence" the
main Bethel assets in IBSA which becomes essentially a property holding company. If there
was ever a catastrophic class legal suit then it would be impossible to seize the assets and
even if WTBTS were wiped out, they could regroup & start trading again. I think that this is a
pretty common practice among charities & companies these days - essentially it is a sale and
In an earlier year the WTS noted that only 13% of conditional donations were ever reclaimed.
They wrote a letter to all congregations at the peak of the Banking Crisis in 2008 saying that
additional funds should be lodged with the society for "safety.” Oban Congregation received a
bequest of about 25K which was lodged in this way. It is virtually a donation to the WTS - they
write every year asking if the loan can fully or partly be turned into a donation & eventually most
congregations or individuals accept it.
Years ago, I was told that the WTS used Kleinwort Benson as their investment advisors -
whoever they use now I would imagine that they are very conservative with their policies
and follow some ethical guidelines (so no potential scandal here).
I assume the 5.3 million difference is the money that the WTBTS gives to other countries to fund
building of Kingdom Halls over and above donations of literature.
In the 90’s, when the energy market was being de-regulated, some JWs were independent
brokers and tried in correspondence with the branch to get the WTS to centralize all its utility
purchases, which would have resulted in savings of millions of pounds a year but the WTS
wasn’t interested & eventually told them to go away. It was calculated the saving at between 1.5
million & two million a year in 1990, so failure to implement this has cost the WTS easily £50
million pounds or more. They still haven't done anything. In my opinion, they are actually really
incompetent financially at running the business, but as they aren't subject to any competition or
criticism from any outside source and have a secure cash flow and low cost base of voluntary
workers paid a pittance then they are OK. I personally don't think that there are any particular
banana skins in the UK accounts - they are all audited and on public record.