What are the WT Society's expenditures?

by Apognophos 21 Replies latest watchtower scandals

• 

  jgnat

  Don't forget the in-and-out of running conventions. I think they come out ahead.

  Excerpts from the Canadian Watch Tower Society 2011 return:

  EXPENSES

  Charitable program $44,961,913 (91%)

  To the WATCH TOWER BIBLE AND TRACT SOCIETY US$ 17,674,654. [Is this payment for materials that the Canadian branch does not print? I suspect this is chiefly the cost of printing and transportation.]

  Management and administration $4,119,349 (8%)

  Professional and consulting fees [from the 8% above] $595,265 [I am guessing the rest is related to running the Georgetown facility and salaries.]

  Gifts to other registered charities and qualified donees $82,420 (0%) (Nine congregations in Canada)

  [Towards the congregations building fund?]

  REVENUE And before you start to feel too bad, revenue was $51,077,729. All but 5 million was from donations. That's an annual donation of about $400 per publisher.
• 

  Anony Mous

  Having worked in the financial parts of both local and regional chapters of the JW org, the problem they have right now is liquidity. They used to have a lot more donations but over the last ~5-10 years, they have dropped where they are breaking about even. In the mean time donations actually sent to the branch have dropped substantially as locals tend to give more to the local funds than the WTBTS.

  As far as the rest, 'poor' kingdom halls or not, they all get the 'loan' structure. If they can't pay it off, it gets shuttled into a new 10 year loan but the KH only has a life span of 10 years so they renovate and that cost gets added to the loan. It's a continuous loan-payoff program where the WTBTS is guaranteed a steady income from each congregation. However congregations have been balking at renovations as well thus they are paying off loans without renewing them.

  So the society owns a lot of property (millions of dollars tied up right now in Brooklyn) but they either can't find a buyer for them or have to sell them well below market value to get rid of them, the rest is tied up in Kingdom Halls which in my area seems to be in the worst neighborhoods because that's where land was cheap and with the economic crises the neighborhoods have deteriorated even further instead of (which is how they pitch it to city governments to get grants and permits) gotten better. They have tried cleaning up some KH's (in my area a couple were merged and closed) but they eventually run into a place like Menlo Park.
• 

  Chaserious

  I'm sure this has been speculated on here before, but I would not be surprised if they had a lot of money tied up in risky investment vehicles during the financial crisis and lost some of their cushion. They were probably doing rather well in the early 2000's, as organizational growth was higher then (also I think a few were still hanging onto hope that the big A would come before the 1914-ers all died), the economy was doing well so publishers probably had more disposable money to donate, plus they sold 360 Furman for $205 Million in 2004. If they had hundreds of millions of surplus cash, I doubt they put it all in a money market account or 2% return CDs. As has been noted here before, they have been on the list at hedge fund conventions. Like many other large entities, they could have lost hundreds of millions during the financial crisis from 2007-2009. Just speculation, but maybe this is why they are trying to build a cushion back up.
• 

  jgnat

  Chaserious, here in Canada and I am guessing most other parts of the world, there are limitations on the types of investments directors of charities can make. They must be relatively safe. I've heard of the society investing in mutual funds and by extension in to the Rand corporation but I doubt they invest in anything riskier. Of course, with the economic downturn, all investments took a hit.

  Investments by Directors of Charities - Ontario

  www.irs.gov/pub/irs-tege/eotopick88.pdf

  "Some states have statutes imposing standards as to what constitutes a proper investment for charitable trusts. In the absence of statutory provision, state courts have imposed a "prudent man" test."

  BTW, as I was looking up information for the US, I see that there is limited information on the registered charities in the US.

  http://apps.irs.gov/app/eos/

  EIN

  11-1857820	Watch Tower Bible and Tract Society of Pennsylvania	Brooklyn	NY	United States	PC
  11-1753577	Watchtower Bible and Tract Society of New York Inc.	Brooklyn	NY	United States	GROUP

  22-3765681

  Christian Congregation of Jehovahs Witnesses

  Patterson

  NY

  United States

  PC
• 

  jgnat

  I googled the EIN to see if anything else would come up. The WTS is close-mouthed about its financial affairs.

  Guidestar - Christian Congregation of Jehovah's Witnesses

  Guidestar - WTBTS of New York

  Guidestar - WTBTS of Pennsylvania

  By comparison,

  Guidestar - Billy Graham Evangelistic Association Expenses for 2010, $89 million. Committed to transparency.

  Guidestar - Focus on the Family Expenses for 2010, $121 millon. Committed to transparency.
• 

  Chaserious

  Jgnat, in the U.S., nonprofits can and do invest in riskier instruments than mutual funds. In the IRS link you provided, it says that in many states a "prudent man" test is used (Often called the "reasonable person" test). Guess what that prohibits? Almost nothing. Maybe investing in a Nigerian Prince or something, but not much beyond that. If the government wants to go after them (which is unlikely), they could definitely say that investing a portion of their assets in hedge funds, real estate investment trusts or mortgage backed securities was reasonable - after all, the smartest investment banks were doing it too. It does also say that certain types of especially risky investments are "closely scrutinized" (but not prohibited), most notably including margin purchases, commodity futures, and options. I doubt they invest in this latter group of securities, but I would almost be surprised if they didn't have some dough in MBS, REITs or hedge funds before the crisis.
• 

  Gayle

  2013 Yearbook showed over $184 Million in caring for special Pios, missionaries and TOs. That averages for 'every' pub. in worldwide $25 each. I don't think most pubs. in world can afford that, so at least 'some' are coming up with that total fund, plus all the other demanding expenses. Plus, there are 21,612 staff at the branches, ($110 (? & depending if that is branchwide) x 12 x 21,612= $28,527,840 plus food and other housing expenses of Bethelites).
• 

  jgnat

  Point well taken, Chas. Boy, you Americans look like cowboys compared to Canadians. When I was the member of a non-profit board, we could not invest in anything less conservative than a term deposit.
• 

  Chaserious

  One other thing I thought of - There used to be an investment vehicle called Auction Rate Securities (ARS) that was promoted by investment banks and money managers to their clients as basically as safe as a money market account. It was seen as a short term investment vehicle that paid a little more than a money market. Huge investors in ARS included entities that you wouldn't think of as making risky investments, such as universities, pension funds, hospitals, and municipalities. At the beginning of 2008, there was $330 Billion in ARS in the US. And in February 2008, poof, the entire market collapsed. I would not be surprised at all (or even consider it irresponsible on their part) if they had tens or even hundreds of millions parked in ARS. They are a perfect investor for that kind of instrument.
• 

  Chaserious

  Haha - yes jgnat, we seem to pride ourselves on going big or going home here in the U.S. of A. Even if we're going big with someone else's money!