Reasons for concluding that Watchtower is in (serious) financial trouble

by slimboyfat 151 Replies latest members private

  • slimboyfat
    slimboyfat

    Okay I'm just going to number the reasons, and invite others to agree, disagree, and add other evidence for, or against the proposition, that the Watchtower is in (serious) financial trouble.

    1. Stephen Lett himself appeared on JW broadcasting in March 2015 and said there was a lot more money going out than there was coming in. He asked the membership to increase their contributions. It's the first time in WT history (I am aware of) that the leadership has indicated they couldn't afford to do the things they want to do. And it kind of broke Russell's maxim that Jehovah doesn't need to ask for money and will make sure funds are available if he supports the work.

    2. A few months later Lett appeared on JW broadcasting again. This time he said that contributions had increased by 15% for a few months in response to the earlier appeal, which he "commended". But he reminded JWs that this wasn't a one-off appeal and that contributions needed to be higher on a sustained basis. However you dress it up, a temporary 15% increase in contributions, in response to an unprecedented appeal for funds, must have been pretty disappointing.

    3. Indeed worse than disappointing because, due to the shortfall, Sam Herd announced a series of deep cuts in the autumn of 2015. He explained that any good head of a household must cut spending to meet the family budget, and the GB were doing likewise. He announced extensive cuts in bethel staff, bethel services, full time servants and construction projects.

    4. This meant abandoning a fully advertised program of KH and assembly hall construction in the United States and elsewhere. Indicating that the extent of the financial troubles were, to say the least, not entirely anticipated by WT leadership, before 2015.

    5. Sam Herd cited as the main causes for the budget problem, an increase in WT employees in recent years, and the cost of maintaining WT buildings. These are entirely plausible sources of financial trouble, given that WT had somehow managed to increase its bethel staff to an unprecedented 26,000 in 2015. And this despite that fact that upwards of 30 branches had been closed. Even Herd seemed baffled how they had arrived at this situation.

    6. Stephen Lett made the comment that sales of New York property only funded the world wide work for a few months at a time: an extremely revealing comment about the level of spending, and also that WT is using its property windfall to make up for their deficit, an unsustainable financial strategy in the long term, to put it mildly.

    Moving on to more general factors.

    6. The WT has lost its main source of income from book publishing, and failed to find a substitute. In some ways JWs were extremely fortunate as a religious denomination that had a lucrative publishing empire as its support. That support was taken away in 1990 when they stopped charging for the literature.

    7. A letter from 1991 indicates that within a year contributions no longer matched the previous charges. We can only assume contributions for the literature dropped even further as the years went on. Publishing turned from being an incredible asset to being a liability for Watchtower.

    8. The evidence that publishing became an incredible financial burden in the years that followed is in the literature itself. The yearbooks were switched to paperback in 1997. Hardcover books were discontinued. Even bound volumes were produced as flimsy paperbacks. Magazines were reduced in size. Calendars discontinued. Different language editions discontinued. I could go on and on. It has got to the point where it was recently announced there will be no more Proclaimers books, Insight books, Kingdom Interlinears, or a whole range of quality hardcovers. All discontinue and not replaced. Reduction of printing to zero is no longer inconceivable.

    9. JWs simply don't have a culture of contributing very much to their church when compared with other religious groups. I think this point is really not fully appreciated. So I will elaborate.

    In fact JWs have taken pride in the fact that their church doesn't ask for contributions. And this worked for them, so long as Watchtower had a lucrative publishing business as its backbone. But absent the income from publishing, the culture of little contributions has proved pretty disastrous.

    Other churches have regular collections at their meetings. Some churches like the Mormon church insist on tithes as a mark of respectable association, and are quite serious about it. JWs on the other hand, to put it bluntly are cheapskates. Many JWs have a kind of "receive free" attitude and contribute very little. In fact, in the olden days, special pioneers used to get the literature at a discounted rate and some were able to derive a (very modest) income from selling the literature. So for some old timers their association with Watchtower was a modest source of income, not something they paid for. This arrangement worked so long as WT was making money from book sales. Now book production is a net loss for Watchtower, yet the culture of small contributions lives on. Many JWs have the attitude that they contribute their time to the work, so they don't need to contribute money. Plus the scripture they always use about "equalising": most JWs view themselves as the subsidised in that arrangement rather than the subsidisers.

    10. There is mounting evidence from around the world, in different surveys, that JWs are among the least educated and lowest paid in society. So even if JWs were inclined to contribute (which culturally they are not) they would be in the weakest position to do so.

    If any religion in the world was likely to suffer financial problems from lack of contributions I'd suggest JWs are the prime candidate, due to JW frugality, lack of education, low income, and a historic reliance on publishing as their source of income.

    10. JWs are declining in wealthy countries and increasing in poor countries. This isn't just unfortunate, it's disastrous. A former CO from Honduras says that the branch was subsidised to the tune of $6 million a year. If that's reflective of other countries in Latin America, Africa and Asia, then any increase in those coutriesis a serious liability for JW finances. And it coincides with decreases and growing apathy among JWs in North America and Europe. A potentially catastrophic concatenation of developments when you really think about it. Some other churches (in particular the Adventists) mitigate this sort of disparity by setting up hospitals and schools in third world countries, which presumably attracts charitable donation, subsidies and investment, to offset the costs of maintaining Church branches in those countries. JWs do none of that.

    11. Which probably explains why they abandoned the Gilead missionary program in 2011. You'd think that a missionary program would be the very last thing a conversion-based church would cut. But for Watchtower it was among the first. Because if poor countries are a serious financial drain on your finances, then why send scores of missionaries out every year? They cost money and any converts they make only compound the problem! So they cut it pretty sharp in 2011.

    12. Along with cutting branches in dozens of countries. Including really old branches such as Switzerland and Austria, and downscaled lots of others.

    13. We know that Watchtower invest heavily in the stock market. And we know that very many investors lost a lot of money around the crash in 2007/8. We don't know the details but, unless Watchtower are lucky, or very skilled, it's safe to assume they lost some money. Perhaps a lot, considering all the cuts and rhetoric that followed.

    14. Given that many companies leveraged their assets during the boom, it's not out of the question that WT borrowed against their significant property holdings too. If they did then they may not even be realising the full value of their assets during their property sale.

    15. While it shouldn't be overstated, abuse claims, lawsuits, and lawyers' fees are an increasing drain on Watchtower finances. Plus there is the potential of having to pay victims through compensation schemes in Australia and elsewhere. If even the mighty Catholic Church has been drained of funds by such scandals, imagine the impact on a much smaller organisation with much less capital, both monetary and cultural, to draw upon. Plus there is the real possibility that, just like in the Catholic Church, ordinary JWs are less inclined to contribute to their church the more they hear about abuse scandals. So abuse scandals are a double whammy for WT, costing more and more money, and making ordinary JWs less inclined to contribute in order to meet those costs.

    16. Another rising cost for WT is paying for full time servants in their old age, medical and care costs. They've tried to dodge this as much as they can, but are apparently under secular and internal pressure to meet their obligations, and especially at a time when such costs are rocketing and people are living longer.

    17. We know that WT spends over $200 million on missionaries, special pioneers and travelling overseers alone a year. Other costs include bethelites, building maintenance, legal and other services, plus their digital presence and output. All these costs combined could easily exceed $1 billion a year. That's more than $100 per publisher per year. Are you confident JWs contribute more than $100 each a year on average to the world wide work? (Excluding local KH contributions, and remembering many publishers are children, unemployed, disabled, poor and so on). Maybe in wealthy countries they might meet that average, but not in most countries, I'd imagine.

    Okay I'm going to stop there. I could cite lots more evidence that Watchtower is in (serious) financial trouble. But that's enough to start with. Do you agree, or disagree, and why?

  • oppostate
    oppostate

    Thanks Slim. Very well presented, it makes a lot of sense. I tend to agree.

    I do hope it's a time of reckoning for those filthy-lucre-loving hypocrites of the WT hierarchy.

    They're not even vipers, like the pharisees, they are leeches!

  • Mickey mouse
    Mickey mouse

    I agree. I had never really made the connection between them dropping the missionaries and the net financial loss that will result from increases in publishers in third world countries. Interesting theory.

  • stan livedeath
    stan livedeath

    $200 million on missionaries etc.

    what for ?

  • never a jw
    never a jw

    Not serious financial troubles. They only have serious membership and cash flow troubles. They have enough assets to keep going for a very long, long time. They just have to downsize, as they wisely have done and continue doing. They just reached or are about to reach their peak membership, but downhill is a long way in the future.

  • never a jw
    never a jw

    Slim,

    The stock market tanked in 2007/08, but it is at an all time high now. Everyone who remained invested is ahead of the game today. In fact, the Watchtower may be farther ahead than the little or the average guys. Since they command millions, they can have access to top and shrewd advisors. Their biggest problem is membership losses or at least stagnation.

  • wannaexit
    wannaexit

    Enjoyed this post. As I was reading, I couldn't help think that the next few years, the big contributors (past generation) will have passed away and the overlapping generation of younger folk really don't have much to give.

    I know in the congregation I am acquainted, jw in their 30's , 40's and 50 really don't have much to give. Most have low paying jobs and can barely make ends meet for themselves. Many don't give a dime.

    It will be interesting what the leadership will do in the next few years when this source of fluid income ceases.

  • jookbeard
    jookbeard

    point 11 very interesting indeed , who'd have ever thought "increase" would be damaging LOL !

  • Introvert 2
    Introvert 2

    stellar post thank-you SBF !

  • LisaRose
    LisaRose

    I have a hard time believing their real estate sales only provided a few months of income. They had property worth billions, if they were losing that much money every few months they would have long since gone belly up. They are lying about that, they have invested that money are are probably doing just fine, at least for now, but it's not like they are going to tell everyone that.

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