Whether the LDS Church violated federal tax law by stockpiling a $100 billion investment portfolio from contributions intended for charity is hardly the only — or even the main — question members are now confronting.

To many in the more than 16 million-member Church of Jesus Christ of Latter-day Saints, the bigger issues involve how the Utah-based faith spends its extensive funds and why it doesn’t share that information with adherents.

Social media are awash in comments from Latter-day Saints expressing shock and disappointment about the size of the faith’s accounts — especially while tithe-paying families struggle to pay ordinary bills — juxtaposed against statements of pride that the church has managed to accumulate so much money.

Still, many of the commenters, even the supportive ones, bemoan the church’s lack of openness about its wealth.

“What’s weirdly karmic about this whole debacle is that it could have been avoided if the church had simply continued to exercise transparency about its income and expenditures, as it did in the early and mid-20th century,” Religion News Service columnist Jana Riess wrote Tuesday. “Instead, its commitment to secrecy, presumably to avoid criticism, has opened the door to further criticism.”

These debates about church finances have been around for decades but were triggered again this week by a “whistleblower” complaint filed by David Nielsen, a former portfolio manager for the church’s nonprofit investment arm Ensign Peak Advisors, with the help of his twin brother, Lars Nielsen — and reported by The Washington Post. In his filing, Nielsen accuses Ensign of taking in billions from members’ tithes and other donations and not spending any of it over a 22-year period on charitable purposes. He then urges the IRS to strip the denomination of its tax-exempt status, saying Ensign may owe billions in taxes.

The church’s governing First Presidency — made up of church President Russell M. Nelson and his counselors, Dallin H. Oaks and Henry B. Eyring — rejected any allegation of fraudulent behavior, insisting Tuesday in a news release that the faith “complies with all applicable law governing our donations, investments, taxes and reserves.”

The current assertions, they wrote, are based on “a narrow perspective and limited information.”

The authorities said they “take seriously the responsibility to care for the tithes and donations received from members."

"The vast majority of these funds are used immediately to meet the needs of the growing church including more meetinghouses, temples, education, humanitarian work and missionary efforts throughout the world,” the trio said. “Over many years, a portion is methodically safeguarded through wise financial management and the building of a prudent reserve for the future. This is a sound doctrinal and financial principle taught by the Savior in the Parable of the Talents and lived by the church and its members. All church funds exist for no other reason than to support the church’s divinely appointed mission.”

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Questions abound

In Washington, Sen. Mitt Romney, who made history in 2012 as the first Latter-day Saint presidential nominee from a major party, said he is “happy” that his church has “not only saved [money] for a rainy day, but for a rainy decade.”

When asked if he was worried that church officials had evaded taxes, the Utah Republican said he presumed they "followed all the rules and regulations.”

Not everyone is so confident.

“It’s not clear,” said Sam Brunson, who teaches tax law at Loyola University in Chicago.

Ensign Peak Advisors Inc. is not a charitable organization on its own, the Latter-day Saint attorney said, since managing money doesn’t qualify as a tax-exempt purpose.

“It has to distribute some of that money to the church [to use for charitable pursuits],” Brunson said. “But the IRS does not dictate how much. Ten percent may not be enough, but it almost definitely has to be more than zero.”

If the whistleblower is correct and Ensign never sent any money back to the church, he said, then there is a “legitimate question about whether it is tax exempt.”

Brunson said few churches have a big enough nest egg to worry about these distinctions, but such questions have long been raised in the context of large universities such as Harvard.

The ambiguity around Ensign is “because it’s a tax-exempt organization separate from the church,” the professor said. “If the advisers operated within the church’s Presiding Bishop’s Office [which oversees the faith’s vast real estate, investment and financial operations], there would be no problem.”

Whatever the outcome of this inquiry into Ensign Peak’s dealings, Brunson said, it is worthwhile for Latter-day Saints to have a conversation about their church’s finances.

“As for whether $100 billion is too much for the church to have sitting, unspent, it’s an important thing to think about. It’s a question that the church needs to seriously engage. It’s a question that we, as members of the church and as tithe payers, need to seriously engage,” he wrote Tuesday in a bycommonconsent.com blog post. “And the question of how large an endowment tax-exempt organizations (including, but not limited to, churches) should have is an important question we, as a society and the voting public, need to engage with.”

Calls for transparency

A few years ago, authorities changed the language on its tithing and donation slips to read: “All donations become the church's property and will be used at the church's sole discretion to further the church's overall mission."

That was “yet another step away from the greater financial transparency we used to see — for instance, when more robust financial reports were provided to the membership during General Conference,” said Patrick Mason, head of Mormon studies at Utah State University. “Now, not only do church members not know anything substantial about the institution’s finances, but they can’t even be confident that the money they expressly donate for fast offerings or humanitarian relief is actually going to the poor and needy.”

Tithing is “a useful spiritual practice that checks the worst excesses of self-interest,” the historian said, and most people “feel good donating their money to a cause that is bigger than themselves.”

Stories like this “will undoubtedly trouble many church members and lead them to wonder whether their charitable giving is best directed toward an institution that reportedly has a stockpile twice as large as Harvard’s endowment,” Mason wrote. “Indeed, many people (including myself) are no longer donating to universities with enormous endowments, figuring that we’ll get more bang for our charitable buck by giving to smaller, more cash-starved entities.”

It’s a new era, in which donors are expecting greater transparency from the institutions they support, he said. The church leadership may be “forced to pragmatically change its behavior and approach out of a cost-benefit analysis. ... It will be more costly, in terms of goodwill, membership and perhaps even donations, to maintain the current lack of transparency than to open up to some degree.”

The whistleblower, David Nielsen, is not talking to reporters, but his brother, Lars, said he hasn’t yet seen “what [he] was hoping for.”

“I am hoping for legislation that will close the ‘gigachurch loophole.’ ” Nielsen wrote in an email. “That will obviously take time. ... I am also most hoping that tithe payers throughout the world, not just in the United States, can have access to this information. I am hoping for more transparency.”

He would like to see the LDS Church tell its members that it is “embarking on a new way to perform charitable acts,” he wrote, giving them “influence over how the money will prepare the world for better things.”

In the end, Nielsen said, exposing the church’s finances “was the right thing to do.”