LDS Church Finances In the Early Church: An Examination of Intent

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It seems clear that the Kirtland banking crisis of 1837-38 in many ways changed the trajectory of LDS Finances. Almost half of the original members of the Latter-day Quorum of the Twelve Apostles, called in 1836, fell away from the Church during this period. Among the Apostles called to take their places were later Presidents of the Church. Many insights can be gleaned from these circumstances today for modern members of the Church of Jesus Christ of Latter-day Saints, especially in the context of the aftermath of the bank collapse. 

Critics like to place all blame on Joseph Smith. Despite many falling into this assumption, Elder Quintin L. Cook, in a recent Conference address, highlighted the larger economic crisis going on during this period, such as the nationwide financial panic. This is early capitalism and the situation presented many challenges and frequent instability. In 1837 many banks across the United States were forced to close their doors. Strains on hard currency were circulating throughout the country. A shuttering of the Kirtland Safety Society relates directly to this larger financial crisis. 

It’s certainly true that Joseph Smith, Jr. and many other early Church leaders had little to no experience operating a bank. They did their best with very limited resources and funding, but the inherent structure of the institution had weaknesses. Historical records show that during its initial upward trend, bank members were paying more into the system than what the people needed. The bank remained liquid and operational for a period of time, but at the moment of panic and financial crisis, these underpinnings quickly bottomed out. One crisis seems to have led to another crisis. Land values plummeted. Parley P. Pratt, one of the most prominent and strong early Church Apostles, experienced a personal spiritual crisis. He vacillated in his dedication to continue following Joseph Smith. However, after a few months, he experienced a powerful change of heart and wrote about coming to Joseph in tears, apologizing, and fully repenting of any and all doubts on the matter of Joseph’s leadership.

Many other Apostles also experienced a trial of their faith, realizing just because one is following the Lord’s prophet, success in every venture is not always guaranteed. Some Church members, it seems, were revealed to have been more in it for the money and could not withstand the withering tests of true gospel dedication. 

Warren Parrish had long served as a beloved scribe to Joseph Smith. However, in this period he bitterly turned against Joseph Smith. He urged for the Kirtland Safety Society to continue in hopes that he might turn a profit in the venture. Warren does not seem to grasp the ultimate picture of building the kingdom of God and Zion. As the Safety Society fell apart, he became angry at Joseph and attacked his character, even forming a rival Church from the detritus of the schisms that prevailed in the Kirtland community. Events associated with the failure of the Kirtland Safety Society had become a test of member’s individual testimonies, forcing them to make difficult decisions regarding their underlying commitment to Joseph Smith and whether they truly believed he had been called of God.

One other thing that stands out in the historical literature of this period is the cultural idea of boom-and-bust economics, the reality of recessions, and the idea that there are always broad market forces in play affecting everyday lives, particularly on ultimate issues addressing the question “What Are Donations to the LDS Church Used For?” 

The United States had already experienced its first major economic crisis with the recession of 1819. Much like in 1837, people digressed into a state of panic and wondered how such a thing could happen when a person felt they haven’t done anything wrong. People frequently fail to comprehend the broader context of all the various elements at play. In Kirtland, the leadership status of Joseph Smith caused some to feel they might be immune from this kind of crisis. Such members might even ask how or why God could allow things to go so wrong, especially when the Kirtland Safety Society had been launched with perceived sanction and blessings of a prophet of God. 

Joseph had seemingly assured the people of the Church that if they invested in a bank established by the Church, its prospects were guaranteed to go nowhere but up. When it failed, the immediate result was to blame Joseph and question his gifts of God-sanctioned leadership. Many wrestled with the question of whether a true prophet of God, upheld by the omniscient and infallible power of almighty God, was even capable of making mistakes. This event became the crucible that forged some of the strongest testimonies in the Church. Many of those who stuck by the prophet, such as Brigham Young and Wilford Woodruff, instead of losing their faith, experienced the opposite–a substantial increase of faith in Joseph Smith and the restored Gospel. The future Church leaders recognized that the failure of the bank, or even the overall picture of LDS finances from moment to moment, was a minor, earth-bound thing in comparison with the much larger Latter-day mission of the Church of Jesus Christ and the goals of the Lord’s authorized mouthpiece on earth. 

Joseph Smith, himself, lost over $6000 in personal monies in his efforts to keep the Kirtland Safety Society Bank solvent. His losses were arguably more than any other single individual. 

Question: Did the Church consider tithing to be two percent at some point in time?

Answer: In the course of learning line upon line and precept upon precept, the bishops of the Church did their level best to address issues of Mormon Church tithing in 1837 and 1838. The matter was addressed in particular in Far West as the Missouri saints had to contemplate their own position in light of Church debts incurred in Kirtland and a sudden influx of Church members migrating to Missouri from Ohio. Men like Bishop Partridge and Bishop Whitney sought to resolve issues of Mormon Church finances as related to two very different geographical arenas with very different financial challenges. 

In 1837 the Bishopric in Far West proposed 2% tithe be required of every head of household to meet Church needs. It should be stressed that their solution was just a proposal. Many ideas were bandied about as the Church pondered what its financial needs would be to sustain itself during the upcoming year. A 2% tithing was never really implemented prior to Joseph’s revelatory solutions that are today outlined in Doctrine and Covenants Section 119.

Even the 2% tithing proposed by the High Counsel in Missouri was not based upon annual income, as tithing is defined today. The Missouri proposal was a suggestion that households pay 2% of their entire net worth. The overall economy of this time period operated very differently from the economy of today. The early Church was largely an agrarian economy, meaning that the income of most people was defined by farming. Persons either wanted a farm, worked on a farm, or already owned a farm. In the 19th century the concept of annual incomes or salaries was very different. Few received a regular paycheck, like in today’s economy. A person might earn wages for a period of time or they might devote time to a particular project or serve their communities as a school teacher. Annual incomes were not perceived in the same way that we view it today, perhaps because there was no such thing as an annual income tax. In this environment, it was more likely that heads of households thought in terms of net worth as a basis for tithes and donations, calculating the total value of lands, acres set aside for farming, farming tools, animals, clothing, furniture, and other personal property. 

Until the second half of the 19th century, the United States was primarily a cashless society. Gold and silver coins were rare. Transactions relied largely upon a barter system. Even if someone was in the employ of someone else, compensation for labor was generally not satisfied by cash money or gold. Instead, terms might be that someone received extra apples from the harvest, which a receiver might then trade to someone else for other goods or services or monetary compensation. A farm worker might be paid in crops or other goods. A store employee might be paid in goods instead of receiving a paycheck. Only rarely was a person compensated for their labor by cash or coinage. This meant that Church members in the early Church would have been more inclined to think about Mormons and tithing in terms of overall net worth rather than annual income. 

In July of 1838, large debts were pressing down on Joseph Smith and Sidney Rigdon, much of it associated with legal fees incurred during the bank collapse. 

Question: Bishop Edward Partridge is reported to have told Bishop Newell K. Whitney that the Lord’s phrase about tithing being one tenth of all their interest annually didn’t mean ten percent of one’s income, but ten percent of what one would hypothetically make in profit if a person’s net worth was invested for a year at a six percent return. When did this original interpretation change to 10% of a member’s annual income as practiced today?

Answer: It’s true that Bishop Partridge expressed this idea to Bishop Whitney, but a modern reader must understand Bishop Partridge’s meaning in the context of the time period.  Tithing, as outlined in Doctrine and Covenants Section 119, introduces a two-tiered tithing model. Initially, Church members were asked to consecrate all their surplus, which varied widely and was subject to individual interpretation. After this initial payment, members asked, indeed, to pay an annual tithing of one tenth of the interest of their net worth. This concept relied upon the standard interest rate of the time.

As the economy transitioned from agrarian to a more capitalistic marketplace, the shift to income-based tithing came into being gradually. However, the original manner of a two-tiered model of tithing was short-lived. Historical records from Brigham Young and others indicate that many saints were not particularly generous in their interpretation of “surplus” property, resulting in minimal contributions.

The tumultuous times of 1838 and the period before and after the saints were evicted from Missouri placed most saints in a “survival mode” that caused many to define “tithing” as 1% of one’s net worth. The idea of 10% was reemphasized at the commencement of the Nauvoo Temple construction and a commonplace policy that encouraged destitute Church members satisfy their tithing requirements by volunteering their labor to building the temple/

During the Nauvoo period better record-keeping practices were implemented by men like Willard Richards and William Clayton. The documentation of tithing records became increasingly refined. Many such records can be found on the Joseph Smith Papers website. 

Between 1838 and 1841, several shifts in the practice of tithing took place within Latter-day Saint communities as the headquarters of the Church transitioned from Far West to Nauvoo. After their expulsion from Missouri, many Latter-day Saints were in a state of abject poverty. In such an environment, the Church understandably tried to adapt and experiment with differing tithing requirements. As mentioned, the Church instituted a form of “labor tithing,” wherein every head of household contributed one day of labor in every ten to lend their efforts to construct the Nauvoo temple. 

Meanwhile, wealthier Saints continued to make donations that were monetary or “in-kind” to support the community. The responsibility for overseeing Mormon Church tithing and donations also shifted during this period. Whereas bishops had originally played a central role in collecting tithes, with the formal incorporation of the Church, Joseph Smith was appointed as trustee. He continued in this role until his death.

Tithing as an internal Church practice continued to evolve and often relied upon the individual interpretation of tithe-payers in subsequent years and after the Saints moved to Utah. It wasn’t until later, under Lorenzo Snow’s leadership, that the doctrine of tithing shifted into its present form, with the amount defined as a percentage of an individual annual income. This shift was gradual and varied by region, with many members still paying tithing in kind—such as in livestock or crops—well into the 20th century, depending upon local economic conditions. The practice of paying tithing in kind persisted in some areas as late as the 1950s, reflecting the agrarian cultural tradition of those communities that participated.

During the period when Lorenzo Snow served as Church President, the practice of tithing shifted significantly from requiring surplus property to a more straightforward, income-based system that asked members to contribute 10% of their net worth as a one-time payment and 10% of their annual income thereafter. As early as the Nauvoo period, records from The Book of the Law of the Lord include entries from British immigrants/converts who donated 10% of their net worth.

In Utah, during the 19th century, detailed records are sometimes absent telling us about instances of property-based tithing. Church leaders, including apostles, collected tithing in various forms from members, who decided–often spontaneously and arbitrarily–what they could afford to contribute, whether a dollar amount or surplus goods. There are accounts of Church leaders visiting various Church branches while they were in the area on business trips or while serving as missionaries, asking local members to gather whatever donations they could provide, such as handkerchiefs, socks, jewelry, dried apples, etc., to be sent along to Church headquarters for distribution. 

Gathering dry goods for tithing often established and defined a community’s devotion to the Gospel. Additionally, there are recorded instances where items donated as tithing were distributed among impoverished Church members. This practice was notably prevalent with widows or women whose husbands were away serving Church missions. Sometimes, contributions were symbolic, like donating a wedding ring or a hunting rifle. One instance tells of an impoverished temple worker donating his tools, which were then immediately returned to him so that he could continue his labors on the temple. Such a gesture underscores how paying tithing was seen as primarily an act of devotion, reflecting a community’s commitment and solidarity with Gospel principles.

Some have asked if there was ever an official discontinuation of the practice of giving surplus property as tithing. No specific revelation or statement from Church leaders marks this transition. The practice of tithing has evolved to meet the Church’s changing needs over time. 

Concerns are commonly expressed about compensation provided to Church leaders, such as Joseph Smith and Brigham Young. Many have assumed that Joseph Smith’s income was solely derived from Church donations and that he lived in opulence. This is a misconception. Often Joseph and Emma Smith did not have a home of their own and lived under the roof of a willing Church member who had available accommodations. The Smith home in Nauvoo, initially a modest log house called the Homestead, was far from lavish. Later, Joseph Smith built the Nauvoo Mansion, but even this property primarily functioned as a hotel. Only a lesser part of this establishment served as a  personal residence while the rest of it provided public lodgings, with Joseph and his family sometimes managing the hotel’s affairs. 

However, soon management of the Nauvoo Mansion fell to Ebenezer Robinson, indicating that Joseph’s involvement in hotel operations was limited and not a source of personal profit. Joseph Smith’s living conditions and financial situation was more complex and less privileged than critics have supposed. In reality, the 22-room Nauvoo Mansion House only served as Joseph’s personal residence for the last eight months of his life.

The Mansion House as it stands today in Nauvoo is smaller than it once was due to the removal of several wings. Nearby can still be seen the homestead where Joseph Smith lived during most of his time in Nauvoo. This humble log cabin contrasts sharply with the grandiosity often associated with the term “mansion house.” Still, any suggestion that Joseph Smith lived lavishly while others lived in squalor would be oversimplified. In reality, Joseph operated several businesses in Nauvoo, including a dry goods store, an earlier hotel, and a printing office to support his family. As Church trustee he received a modest wage, similar to other clerical positions. Initially, his daily wage was one dollar, later raised to two dollars, which even in Joseph’s day was no substantial sum.

Joseph Smith’s debts from the Kirtland era also followed him to Nauvoo, finally compelling him to file for bankruptcy. This further underscores that his living standards were not notably more extravagant than his contemporaries.

The financial circumstances of Brigham Young varied over time. While serving as a missionary in England, his family lived in poverty, at one point sleeping in a three-sided shack that did little to keep out the rain. In Nauvoo, Brigham managed to build a comfortable brick home, but not luxurious. This home still stands today and can be visited.

In Utah, Brigham Young’s role expanded as the Church effectively founded the industry of the region, filling a role typically occupied by government or corporations. While Brigham did benefit financially from this position, it raises a broader question about intent. Was Brigham’s objective to enrich himself? Or was it to assist the Saints and build Zion? Evidence suggests that his focus was ever devoted to the welfare of the Saints and the establishment of Zion instead of personal luxury.

Amidst a backdrop of significant poverty among the Saints of Nauvoo, there were instances of labor and class disputes. Some groups, like the stonecutters, alleged that certain Church leaders were exploiting them by taking more than their fair share of tithing revenue. These concerns were never directed at Joseph Smith or Brigham Young but targeted lower-ranking officials within the Church hierarchy. These issues were brought to the forefront during the April 1843 General Conference, where the agenda was primarily to address these allegations, particularly against Elias Higbee and Reynolds Cahoon of the Nauvoo Temple committee. The accounts were discussed openly. Cahoon and Higbee ultimately apologized for their conduct and pledged to improve.

Criticism from outside the Church community, particularly from anti-Mormons, often accused Joseph Smith of profiting personally from the tithing and donations of others. People like John C. Bennett made no secret of such allegations, although his accusations are not supported by Church records or the general sentiments of Church members. 

Additionally, there is a common misunderstanding about the compensation received by Church leaders. Most receive no compensation whatsoever, including bishops or stake presidents whose service is voluntary. However, General Authorities who are asked to leave their careers for full-time Church service are provided with a living allowance. This stipend is uniform for all general authorities and is funded by the Church’s financial investments instead of tithing. This enables individuals who are not financially independent to fulfill these duties. In the early Church, the Twelve Apostles and other missionaries were wholly reliant on member and stranger donations. In Nauvoo, Joseph Smith and Sidney Rigdon sometimes petitioned the high council for additional support due to financial strains from their extensive Church duties, highlighting the financial challenges they faced.

Question:  Was it the High Council or Joseph Smith who controlled the finances of the Church? How did this work? 

Answer: In Kirtland and Missouri, the financial management of the Church involved collective decision-making by the bishopric, the First Presidency, and the high council, mainly due to a chronic lack of funds. The Church relied heavily on generous donations from members like John Tanner and Vienna Jaques to cover expenses such as temple construction or land acquisition. This dynamic shifted in Nauvoo when Joseph Smith became the trustee, effectively making him the financial head of the Church, which centralized financial control and decision-making.

In Nauvoo, Joseph Smith and Sidney Rigdon, while still consulting with Church leaders, assumed more direct control over Church finances. This practice aligned with the instructions laid out in Doctrine and Covenants Section 120, which stipulated that the First Presidency, the Bishopric, and the High Council should convene to discuss the disposition of tithing. During this period, the authority of the Quorum of the Twelve Apostles was generally restricted to areas beyond Nauvoo or nearby stakes.

Allegations that Joseph Smith profited extravagantly from his role are common to this day. Critics have claimed that he enriched himself through the sale of Church-owned lands in Nauvoo. However, research indicates that during the early years of settling Nauvoo, from 1839 to 1841, over forty percent of properties “sold” by the Church were actually given away with no expectation of repayment. Properties actually sold were often done so on credit, with little expectation of immediate payment. Financial records reveal that collected revenues typically were used to address Church debts and other obligations, and did not contribute to personal gain. 

Question: Some non-Latter-day Saint Christians have expressed the opinion that it is wrong for a Church leader to accept money for any services rendered. Is it priestcraft to make money from the Church of Jesus Christ or its members for any services that might be defined as spiritual or religious in nature?

Answer: Historically, it has been standard practice for Christian sects to provide compensation to their ministers and pastors, reflecting a tradition extending well before the 19th century and continuing today. In many Christian congregations, certain positions like leading in children’s programs or administration tasks are often paid positions. This is unlike the Church of Jesus Christ of Latter-day Saints, where such roles are voluntary and viewed as acts of service and consecration.

In the Latter-day Saint context, the distinction between who gets paid and who does not is generally delineated between full-time and part-time positions. Those who serve in full-time Church roles, such as those who leave their secular employment to serve missions or provide other Church services that last for extended periods, typically receive some kind of support or aid from the Church. Conversely, part-time voluntary roles, such as teaching youth or organizing local ward activities, receive no financial compensation.

Certain Church roles, like that of a bishop, have in certain periods of Church history been lifetime callings. Nevertheless, such servants received no stipend or compensation from Church headquarters. Such services were simply viewed as fulfilling Church duties. 

There are instances where the Church employs individuals who work for Church-owned entities, such as the Church History Department or Church schools. These persons receive compensation for their professional services. However, such roles are seen as distinct and separate from ecclesiastical duties, such as those performed by a local bishop or stake president. 

In LDS doctrine exists the concept of “priestcraft,” or profiting from one’s association with the Church. This is often viewed as a separate ethical issue wherein one’s ecclesiastical and professional role appears to be designed with the primary intent of generating a personal profit and gain for an individual. The Church often goes to considerable effort to avoid these kinds of conflicts of interest or even the perception that someone might be exploiting their Church affiliation for personal gain.

According to the Book of Mormon, particularly in 2 Nephi 26:29, priestcraft is defined as individuals who “preach and set themselves up for a light unto the world that they may get gain and praise of the world, but they seek not the welfare of Zion.” This helps us understand that the core issue is one of intent. It asks if the actions of an individual, whether they are authors, podcasters, or anyone else engaged in the use of Church materials, are acting in a way that helps people understand Church teachings and builds Zion, or if they are seeking personal aggrandizement or worldly wealth.

This distinction is crucial and carefully considered because it shifts the focus to one’s motivations with regard to building God’s kingdom and serving the Lord. If someone sets themselves up as an exclusive source for understanding or interpreting Church doctrine, particularly if their message contradicts established teachings, this will generally raise a red flag. Church leaders and members should remain vigilant to ensure that Church activities can be clearly distinguished from the Book of Mormon’s criteria for priestcraft. It encourages leaders to examine an individual’s motives and perpetually ask if someone is acting for personal advantage or if they are sincerely seeking to advance the well-being of Zion. Priestcraft is not always just about financial gain, but about the intention and effect of one’s actions within the Church community. 

Question: Is it true that there were substantial disagreements between Brigham Young and Emma Smith about financial assets after Joseph’s martyrdom? If so, what resulted from this conflict and what lessons were learned? 

Answer: There are many misunderstandings about disputes between Emma Smith and Brigham Young following Joseph’s death. The conflict is often attributed to finances, but the actual division between Emma and Brigham was rooted in issues like plural marriage and other aspects of Joseph’s legacy. The financial discord between Emma and Church leaders primarily stemmed from complexities in distinguishing Joseph’s personal assets from Church assets.

Joseph, elected Church trustee in 1841, attempted to separate his personal finances from Church assets, but overlap and confusion persisted. In one instance, Joseph instructed Emma in a letter to sell the Quincy Farm if needed, despite the farm technically being Church property. After Joseph’s death, William Clayton, Joseph’s chief financial clerk, noted that Joseph’s estate was burdened with debts, largely incurred in his personal name even though most assets were owned by the Church. 

Emma was understandably distraught over Joseph’s death and felt concerned for her family’s welfare. She was advised by lawyers that Joseph’s actions as Church trustee could not be justified legally. She attempted to claim Church assets for herself. This was contested by Church leaders, who managed to retroactively pass a state law that defined Joseph’s actions as taking place in the name of the Church. 

Tensions continued into 1847 when Emma and her new husband, Lewis Bidamen, began selling church assets and treating them as personal property, ignoring Church claims. This led to legal battles lasting until 1852. During this period, Emma’s actions not only strained her relations with Church leaders, but also diverted potential resources from impoverished saints who established themselves at Winter Quarters in preparation for their western migration.

The legality of Joseph’s actions stemmed from Illinois law, which only allowed Churches to own property that explicitly served a religious function, a regulation ill-suited to the expansive and multifaceted nature of the Latter-day Saint Church. This raised complex legal challenges after Joseph’s death, culminating in the government inevitably staking claim to many of Joseph’s disputed properties to pay debts that Joseph had incurred.

Ultimately, this complex interplay of personal, legal, and organizational dynamics shaped the early financial and administrative policies of the Church, highlighting the difficulties of managing Church affairs under restrictive state laws and in the event of personal tragedies.

The profound divide between Emma Smith and Brigham Young, along with the saints who followed Brigham, stemmed from mutual feelings of being mistreated by the other. This tension persisted throughout their lifetimes, leading to a longstanding grudge that affected subsequent generations. The conflict, characterized by accusations from both sides, found its way into the sermons and writings of both LDS Church leaders and leaders of the RLDS Church, today called the Community of Christ, which included Joseph Smith’s children.

Emma’s actions, particularly her attempts to secure Church assets, were rooted in her genuine concerns for the well-being of her family after the tragic loss of her husband. By the time she married Lewis Bidamon in December 1847, she had already been bearing the sole responsibility of providing for her family for several years, all while grieving and being pregnant with Joseph’s last child. The circumstances made her acutely aware of her own financial stability.

A certain perception of entitlement from surviving members of the Smith family also contributed to the conflict. Emma felt her family had given significantly to the Church. This bitterness was reciprocated by Church leaders such as Almon Babbitt, with whom Emma had a particularly contentious relationship and protracted legal battle over Church assets. Disputes over Joseph Smith’s estate and Church assets became a complex affair, mingled with grief on both sides, aggravated by financial necessity, and conflicting perceptions of entitlement and betrayal. This situation illustrated the all-too human frailties associated with spiritual and religious conflict, with emotions and personal stakes clouding the broader implications of actions taken on both sides. The ongoing legal and personal disputes underline the enduring struggle to balance one’s personal needs with collective Church responsibilities, leaving in its wake no clear “bad guy”, but a nuanced tableau of flawed personalities navigating challenging circumstances. In these sad affairs, ultimately everyone loses. 

Researching Joseph Smith’s financial records reveals his profound generosity as the Prophet and President of the LDS Church. Records consistently show him giving money to people in need on the streets and helping individuals meet their obligations in various ways. Beyond individual acts of kindness, Joseph took on the Church’s debts to shield others from financial harm, which stands as a testament to his selfless nature and spiritual priorities. Despite numerous accusations that he acted with selfish motives, the picture of Joseph Smith that emerges from the sources reveal someone who is far from self-serving. He emerges as a figure deeply committed to the welfare of the saints, giving all that he could for the benefit of the organization and its members. Joseph’s flaws and weaknesses make him relatable and sympathetic, demonstrating that, despite his all-too human imperfections, he achieved monumental things throughout his lifetime of faith and dedication.

The financial records of the Church, particularly from the Nauvoo period, paint a clear historical perspective of the Church’s financial activities. These records do not show any evidence of nefarious activities by Joseph Smith, despite minor issues and accusations of partiality or other trivial missteps that relate more to human shortcomings. Overall, the historical record portrays a community striving to build Zion and a Holy Temple at great sacrifice. The testimony of the saints’ commitment to the cause of building God’s kingdom and their willingness to consecrate their resources to achieve every goal of the Church of Jesus Christ of Latter-day Saints is evident in every financial document from this period, underscoring the courageous and selfless efforts of Joseph Smith and other Church members to realize the fullness of their spiritual aspirations.

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