Incorporated

There are few things that people antagonistic to the church can pejoratively say to induce in me a harder eye roll than the church is a corporation—shortened to LDS Inc for the feckless. A little more than a decade ago it became popular in some corners to assert that there was no Church of Jesus Christ of Latter-day Saints, that there was merely a trademark and copyright owned by one of two corporations: The Corporation of the Presiding Bishop, and the Corporation of the President—both “corporations sole,” meaning that they are “owned” (Dun, dun, dun) by single individuals. There is no church, they say, and there hasn’t been since the early twentieth century. Of course this line of reasoning is silly.

Nate Oman is one of the wonder-twins of legal theory and analysis as it comes to intersections of the church and the law (our very own Sam Brunson is the other). And Nate has just published an article that looks at church incorporation as a tool of Protestant hegemony in the US, and follows the Church of Jesus Christ of Latter-day Saints as it struggled to resist that control, and to find legal structures that jibed with its ecclesiology. You should read it: “Established Agreeable to the Laws of Our Country”: Mormonism, Church Corporations, and the Long Legacy of America’s First Disestablishment.

There is a lot of interesting information in there for the historically centered–details about the church’s status in New York, Ohio, and Illinois. There are fascinating pieces about the Raid, the legacy of federal prosecution, and the ultimate rise of the corporations sole. But the bigger issue is, as mentioned above: religious freedom in contexts that render today’s culture warriors a bit amateurish.

Oh, and it turns out most churches are incorporated, money is fungible, and church membership generally doesn’t equate to ownership or control. Also a fun little bit in the footnotes: I learned that last year the Corporation of the President was merged into the Corporation of the Presiding Bishop. The name was then changed to “The Church of Jesus Christ of Latter-day Saints,” and Russell Nelson was installed as the incumbent. I guess the church exists now.

Comments

  1. It seems the snarky nature of that particular critique may have gone over your head. Sounds like a realy interesting book though, thanks.

  2. One tax lawyer/former stake president tells me there have been more corporations than the two Utah corporations sole you mention that own church buildings and have dealt with such property rights as he did in his stake. As I understood his response to the legal entity question (not the snarky critique), it was that for tax purposes the Church was an unincorporated association, another kind of “legal” entity. Part of the historical basis of the complaint may be the former common teaching that the Church was organized in NY with 6 members because NY corporate law then required 6 members to incorporate. I’ve no idea if that was a correct statement of then NY corporate law, but there was, when I looked, no NY evidence of such an incorporation to be found. I’ll read Nate’s article. Thanks for pointing it out.

  3. J. Stapley says:

    JR, yes, there are some more complicated legal structures than those two corporations, and Nate gets into the development of it. One of the more surprising things I learned out in the Bay Area, was that the Oakland Temple is technically owned by the stake presidency’s corporation, or something like it. Fascinating Legacy of this history.

  4. Thanks for the heads up.

  5. Thanks for this, J.!

    I love Nate’s religion scholarship, in large part because he looks at the questions I’m interested in too: how does religion exist in a secular society? Like, it’s cool to say that the church shouldn’t go corporate, man (I guess), but where it needs to own property and enter into contracts and stuff, it needs some sort of corporate existence.

    Interestingly, a chapter in the book I’m currently writing looks at questions of forming a corporate entity in Brooklyn. I won’t spoil the story but suffice it to say that to comply with various legal regimes, the church had to decide whether it needed, against its better judgment, to split its corporate identity.

    I suspect that one reason people freak out about the idea of corporations sole is explicit or latent anti-Catholicism; in the 19th century, Catholic bishops lobbied for legislatures to make them available and a not-insignificant number who declined declined explicitly because they wanted to limit Catholic power in what they viewed as a Protestant nation.

    Anyway, thanks for highlighting this, J.! I now know what I’ll be reading for the next little while!

  6. Hear hear! The snarky “corporation” commentary is almost universally based on the notion that other churches or non-profits aren’t corporations (many, maybe most, are) or that the President of the Church “owns” the CoP (he doesn’t “own” it any more than does the board of directors or trustees own a non-profit). It betrays a general ignorance of organizational structuring and legal existence.

    I’ll check out Nate’s article. Sounds fascinating. Didn’t know about the merger between the two corporations sole.

  7. Sam,

    Like, it’s cool to say that the church shouldn’t go corporate, man (I guess), but where it needs to own property and enter into contracts and stuff, it needs some sort of corporate existence.

    This assumes without argument that, of course, there will, inevitably, invariably, always, be a need for churches “to own property and enter into contracts and stuff.” There are, shall we say, multiple Christians throughout history who have disagreed. But that’s a different argument, obviously.

  8. Russell, that’s the thing about what Nate’s and my interest lies. I’m not interested in normative arguments about what religion should do. Rather I want to know how law and society influence religion.

    So property ownership isn’t always and forever inevitable. But it’s pretty close to entirely necessary (for religions and basically any other nonprofits) in current American society. So snarking accusing the church of being a corporation is mostly pointless because, for various reasons, it’s basically inevitable. And gleefully accusing it of using the corporation sole form to do shady things both grossly misunderstands corporations soles and reflects a long US history of anti-Catholicism, whether it knows it or not.

  9. JR and J. Stapley are correct about local stake president corporations sole owing real property. As Nate indicates in his article the church’s policy changed by the 1960s to having real property held by the central Utah corporation sole of the Corporation of the Presiding Bishop rather than local ward or stake president corporations sole, but some of the preexisting stake president corporations sole persisted and continued to own real property. The California secretary of state’s business search website currently lists 15 “active” Corporation of the President of the _____ Stake, Church of Jesus Christ of Latter-day Saints entities, including Los Angeles, Bakersfield, San Diego and Oakland stakes. The most recently formed were San Jose and Saratoga corporations formed in 1973. In 2014 someone from Salt Lake filed reports updating the California records to show the then current stake president for the active corporations sole, but I don’t see much after that.

  10. The California secretary of state shows one active LDS Bishop’s corporation sole: the Corporation of the Bishop of the Westwood Ward, Church of Jesus Christ of Latter-day Saints, a corporation sole. A report was filed in 2015 to update the name of the new bishop, by (or on behalf of) the late Von Keetch, a prominent outside lawyer for the church at Kirton and McConkie.

  11. 1. A fascinating article by Nate Oman! Thanks for pointing it out.

    2. There are a few who think it’s a great “gotcha” to point out that the Church legally exists as a corporation. I agree that this is a silly criticism. Even so, the “corporation” comment has some bite. The implied point is that the Church looks and acts more like a corporate business than a church. Though I don’t share that opinion myself, I think it’s worth saying that we fail to refute the comment when we only take it literally.

  12. When a church hoards $100 billion and only uses it to underwrite its mall and rescue its insurance company, while asking people for more donations even if it means they can’t buy food or pay rent, that church is acting like a corporation and not like a church. But hey! It’s legal, so we’re good.

  13. J. Stapley says:

    Again, corporations don’t act in a particular manner. It isn’t a thing. Now if you want to get into organizational theory that could be a fruitful area of analysis, but I tend to resist wild generalizations. I also tend to dismiss statements that church investments are “only” used for certain things as uninformed. There are productive conversations to be had about investments (see, e.g., Sam Brunson’s posts here in the past).

  14. Loursat, my problem is it annoys me to absolutely no end when people use “corporation” pejoratively and demonstrate absolutely no understanding of what a corporation entails, instead trying to say something like “scientific management” or “profit-maximizing.” Like, all of the people complaining about the church being a corporation all also do/did some of the following things: own iPhones and visit their local emergency rooms and donate to NPR or the Red Cross and comment on Facebook and attended a university.

    And each of those is a corporation. And we don’t usually criticize universities or hospitals or the Catholic or Presbyterian church or the local synagogue for being incorporated.

    And I understand where you’re coming from in your second comment. But, since I teach Business Organizations (and occasionally Nonprofits), I feel a bit justified in being a pedant on this point and asking people to do better. At the very least, I’m going to push back in the interest of helping them understand the business world that they live in!

  15. Not given says:

    J and Sam –

    If you truly are trying to educate people on this, a sneering pedantic tone like this blog post and your comments is not really helpful to accomplish your otherwise worthy goal. Nevertheless, Nate’s article is impressive and thank you for referring to it here.

  16. Not given, though I’m tempted to be snide in response to you, I’ll refrain. I’m sorry if my comments came across as sneering–they were meant to come across as self-effacing (but see tone on the internet).

    I don’t read any sneering or condescension in J.’s post. I do read an invitation to read a work of art on the history of corporate status and the church. And to be completely honest–and to try to be judgment-free–attacking the church for being a corporation at best evinces an enormous lack of understanding and, frankly, requires a large dollop of historical anti-Catholicism, whether deliberate or not. As Nate points out, the attempts in law to enshrine congregational control (and thus prevent corporations sole) were meant deliberately to prevent standard Catholic corporate form in the late 1800s.

    If you’re interested in that (and honestly, who isn’t?) UCLA’s Stephen Bainbridge has a fascinating look at Catholic corporate organization, especially in light of the clergy sex scandal: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=901663

    Finally, while it may not be ideal, I nonetheless reserve the right to be snarky and dismissive of people who aren’t conversing in good faith (and I’ve run into a good number of them). A person saying “LDS Inc.” accusatorily may get one pass from me, but the second time they’re being deliberately lame and obtuse and I don’t have time for that. (I’m not setting that up as ideal model behavior, by any means, but especially at the tail end of a pandemic, I’ll take amusement however it comes!)

  17. I remember when Mitt Romney kind of gaffed the whole “corporations are people” thing and thought was the dumbest thing I’d ever heard. I attended business school the next year, after prior career in a progressive profession, and I learned Mitt was right, just bad at translating the legal precedence and business ideas to some guy at a fair.

    I’ve gained more appreciation of what a corporation can do and be. Corporations can have responsibilities to shareholders or governments or other interests and corporate status can grant institutions or companies a broader life, almost like an eternal life on earth that just didn’t exist like it did in prior generations. The thing it does is sets something up to exist beyond a generation.

    Just like GE or Kodak mean something different now, the corporate reserves of the Church can set it up to be something in the next generation it wasn’t before, something that can exist through hard times.

    Take for example what we hear of the Church’s large investments. It got good businessmen in the mid 20th century who decided to make the Church financially sound. They set apart a reserve that was invested in and with enough time the Church has possibly become financially independent from tithing to do its core mission. Need a temple in Vanuatu where there a few stakes and average salary is probably somewhere around what an upper-class American brings in in 2 weeks? Build it. Expanding in the Congo? A church gets built for a Branch of 125 people who would need 10 years of fundraising to get that chapel prior. Missionaries are subsidized to serve. The Church is in a place where they are expanding subsidizing Pathways to take care of nontraditional students. Imagine what the seed money can do in the future.

    Most of us are saving for retirement and are trying to get to have enough of a nest egg to make it the rest of our life without becoming a burden. But once you get to 25 times your needed expenses and you invest and draw 3.5-4% your money grows and you can spend more each successive year. The corporation continues forever.

    The Church may be in a place where even if the American base that traditionally supplied funds secularizes, become less adherent, and breed less, the Church will still grow and foster other parts of the world. And in the future they may further increase their capacity to have an impact, because they thought like a corporation and thought generationally.

    Off to read the article.

  18. Nice article. Curious about Church run businesses and the law. Article was good prelude for the 20th century, financial and other details aren’t readily available. I need to read Quinn’s The Mormon Hierarchy: Wealth and Corporate Power. I enjoyed what he said on podcasts.

  19. J. Stapley says:
  20. WarrenD says:

    Great insight and I really enjoyed Nate’s article. It reminds me of one point raised in Harari’s book Sapiens (and probably elsewhere): that the creation and widespread adoption of legal fictions such as corporations is one of the primary drivers of modern society. Our ability to adaptably organize in a complex world shows man’s ingenuity, that it applies to holier realms as well is both remarkable and, in a way, unsurprising.

  21. Margaret says:

    Fascinating! Thank you for your insights and all the comments that followed.

  22. Right, because who’s interested in normative arguments about what religion should do? Those certainly aren’t as important as arguments about how law and society influence religion.

  23. DH, normative arguments are certainly fine, and I doubt anyone would argue that they’re not. But not every discussion of religion has to ask every question. (In fact, that would ultimately become unwieldy and really, really boring.) So while we certainly should ask normative questions about what religion should do, it seems to me there’s a ton of value in grounding those questions in descriptive analyses of how law and society influence religion (and vice versa).

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