What to Do About Ensign Peak Advisors

May 20, 2023 by 35 Comments

In my last post, I wrote about the 60 Minutes segment on Ensign Peak Advisors. As part of that segment, the interviewer asks Bishop Waddell, “But don’t you agree this would be a nonissue if there were more transparency?”

He responds, “No. Because then everyone would be telling us what they want us to do with the money.”

Frankly, I think he’s wrong. But for now let’s respect that. For purposes of this post, I’m going to assume that the church will maintain a significant investment portfolio. And whatever I think about it,[fn1] I’m going to be indifferent to whether and how it should spend down that portfolio. Because I think EPA’s current status, as an external tax-exempt investment advisor, is ultimately untenable, notwithstanding the fact that it’s legal.

What do I mean? Well, as a general rule, investment managers are for-profit, taxable endeavors. EPA is a nonprofit, tax-exempt organization. (Critically, “nonprofit” doesn’t mean it can’t earn a profit. Some nonprofits—including, notably, hospital chains—are tremendously profitable. The “non” in nonprofit means that the profit earned can’t benefit any individual. While this is a little over-simplified, it basically means a nonprofit can’t distribute its profits as dividends.)

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Some Thoughts About Ensign Peak Advisers and the Church

December 17, 2019 by

The Religion Unplugged and Washington Post stories raise (at least) three important questions. I’m going to try to address all three here (though at least one will be really quick), and I suspect that this post will be unsatisfying both to those who want to see the church vindicated and those who want to see it get its comeuppance. And that’s because, contrary to popular perception, the tax law isn’t an area full of clear answers and bright lines. It’s also because many tax issues are fact-dependent, and we lack many of the facts. To the extent that you want more information and analysis, Peggy Fletcher Stack has been doing some great reporting on this.

The three main issues I see are these:

  1. Does the church have $100 billion in securities-type investments?
  2. Should the church have $100 billion in securities-type investments?
  3. Does the $100 billion in investments violate the tax law?

Now, I have absolutely no answer to number 1. I’m slightly skeptical, just because growing $12 billion in 1997 to $100 billion today (with two significant market downturns happening in those 22 years) strikes me as requiring some pretty aggressive assumptions. On the other hand, it’s at least plausible. And notably, the church has the ability to tell us how much it’s worth. To the extent it chooses not to do so, assertions like this will continue to find traction. Since the ball’s in the church’s court here, and since I have neither knowledge of nor the ability to find out the net asset value of the church’s investments on my own, for purposes of this post, I’m going to assume that he’s right, and that the church has $100 billion invested in Ensign Peak Advisers.

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