Excellent OP
Reasons for concluding that Watchtower is in (serious) financial trouble
by slimboyfat 151 Replies latest members private
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konceptual99
If each of the 8 million JW's gave only $1 per month , in a year the Society would receive $96 million per year.
Where is the money going and why would it cost so much to drink life's water free?This is a good question. I suspect the donation figures are ALOT bigger than that. I am also sure there are many businesses with turnover of $96m (approx £77m) that are doing a hell of a lot more with it, especially since no one is supposedly making any kind of large salary out of the WTS.
Is it all going on expensive lawyers, branding consultants, change management specialists and other professionals?
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konceptual99
Watchtower financials are subject to error. Consider this as a example: For many years Watchtower Britain regularly received yearly donations of €6.7 million from Watchtower Germany. At the same time the IBSA regularly received donations of £6.7 million from Watchtower Britain.
Sounds like a sizeable €13.2 / £13.2 million donation. But . . .
The IBSA would print £6.7 million in literature of which they would donate to JWs in Germany for distribution through Europe. This way the same 6.7 million going around and around like a merry-go-round. This is not how you do business. This is tax avoidance. Eventually the distribution costs would catch up.
Each branch would report to the uneducated GB their income from donations. Looks good on paper but the same dollar or pound or euro was being donated over-and-over-and-over again.This is a very important point. The WTS is like a group of companies where deficit in one area is made up by profits in another. What happens in most corporations however is that loss making businesses get the chop. The WTS has limited options here as they cannot simply choose to stop operating in parts of the world that need support from elsewhere.
Also, as per Paul's point, the shifting of funds to avoid tax and limit corporate exposure to potential legal liabilities is not only complex and prone to giving an optimistic picture but also relies on a decent stream at certain points in the pipeline - specifically donations from the more prosperous nations.
If that pipeline dries up then it spells big trouble in the long term.
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_Morpheus
Slim, your OP is well thought out and does a good job documenting 20 years of progressivly vigorous fincial restraint... but that very thing argues against collapse.
Your attempting to take 20+ years of decline and condense it into an impending destruction but the very fact that its gone on for 20+ years says no. They are managing. They are leaving brooklyn at a time when estate is up and are i have no doubt are using the money wisely (investing) to provide for the future. Non productive branches are being cut back or sold. All you have really done is give evidance that supports their ablity to survive and transition.
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slimboyfat
Morpheus exept for the rather dramatic events of 2015 which demonstrated they are facing something unexpected and unprecendeted. They cancelled an extensively planned and advertised program of KH construction and instead raided all congregations of available funds. (A crucial part of the episode I should have expanded upon in the opening post)
Additionally I believe there is every reason to suspect that donations will decrease even further in response to events. Watchtower made the crucial mistake in 1990 of assuming that JWs would continue to contribute the same amount for the literature when there was no longer any charge. That proved to be a huge miscalculation and all the cutbacks in production have been the result.
Similarly they are making a huge mistake right now. They seem to think that when they take all the funds from congregations directly to support the organisation that ordinary JWs will continue to contribute the same amount they have always done. But there is a huge psychological difference between donating funds to the local KH and keeping it running, and donating funds that disappear each month never to be seen again. Any JWs who are doubtful may stop donating altogether (as in experience above). But even true believers may reduce their donations in this scenario as it's just no longer clear what the donations are for.
Which relates to another reason for reduced donations. Back when literature was freely available and KHs were being built all over the place, it was clear what donations were for and what they were accomplishing. What Watchtower doesn't seem to realise is that, as they cut back the services they provide, ordinary JWs are perfectly able to observe the reduction in services and reduce their contributions accordingly. So cutbacks may not necessarily produce the financial savings Watchtower expects as ordinary JWs reduce their contributions in proportion to the cutbacks: a self-reinforcing negative feedback loop.
The idea that Watchtower could almost totally stop providing literature and confiscate congregations funds, and yet expect ordinary JWs to contribute just as much as they did before, indicates exactly the sort of hubristic miscalculation that may result in a sudden collapse rather than a gentle decline.
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Doubting Bro
The cynic in me says that the 2015 advertised program of KH building was nothing more than a ruse to raid congregation funds. I tend to vacillate between thinking the GB and it's minions are either evil geniuses or bumbling idiots when it comes to running their company, errr, religion. I suspect the truth lies somewhere in between.
If you put them at the competent level, then I imagine they looked at the trends of reduced or flat donations vs increasing expenses and a bloated infrastructure and that led to the reductions we've seen. I have to believe they hired an outside consultant to give them recommendations and that the reductions are a result of them starting to implement those plans.
For sure, they have said their expenses are more than their income. However, these are the same people that say it costs $10 per person a day (in the US)to run an assembly hall that is paid for and maintained by volunteer labor. I just went to an assembly and the expenses were $18,000! For one day!! And I remember when they built the place and the area the AH services collected the cash before building began. So, all they pay for is maintenance and utilities. So, maybe 4-5 thousand? The rest if pure profit.
I believe they are lying about the extent of their financial woes in an effort to guilt more money out of people. I do think their expenses outstrip income and that's why the reductions have been made. I saw another post about the ratio of bethelites vs publisher and it shows they got bloated. Right sizing seems a common sense thing to do.
There's no doubt that the decision to quit charging for literature still haunts them. But, I think they've got a nice endowment stored away that they can milk for a long time. I have to believe the worldwide cash grab was an effort to build that fund up.
I agree that cash flow remains an issue and the mandatory monthly contributions they put in place a few years ago has likely stabilized the income stream so they can properly budget. The congregation I attend sends about $1,600 per month and has never sent less than the promised amount.
I agree with your assessment that growth in 3rd world countries and flat to declining numbers in wealthier countries is bad short term and even worse long term. And your theory about Gilead makes sense to me. I also agree that the cutbacks will likely have a negative psychological impact which could result in lower contributions.
It will be interesting to see if the abuse scandals have impact on donations and/or the overall financial standing of the organization. If the Catholic Church is any example, it will. But, something big needs to happen in the US to make a real impact.
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stan livedeath
why do they need all that money in the bank if the new system is just round the corner ?
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sparky1
The Governing Body of Jehovah's Witnesses wears 2 hats.
Hat # 1: Magisterium of Jehovah's Witnesses. They are the last word on theology effecting the group.
Hat # 2: Board of Directors of the corporate arm of the religion. As such they exist as General Manager, Operations Manager, Sales Manager and Public Relations Manager all rolled into one. They are the last word on finances effecting the operation of the group.
This arrangement gives the Governing Body a dual power over their congregants. Their word is final on both spiritual and temporal, material matters. Whatever this corporate/religious 'mouth piece' speaks, the average Jehovah's Witness laps it up without any critical thinking whatsoever.
Again, this is just my two cents worth but I believe that they are only experiencing a temporary shortfall of funds. As the leaders of this corporation, the Governing Body has many internal financial advisors and possibly some outside advisors, also. Any large corporation worth 'it's salt' has financial projections for the present, for 1 year out and for many years into the future. The religious corporation is no different. My feeling about the supposed financial 'strain' that the Society is feeling, is that the begging for money is just a smoke screen to get the gullible sheep to donate more as they build up their reserves. I have seen this in the corporate business environment that I am connected to. Every year, the corporation sets financial goals for itself, which are usually 8% to 10% higher than the previous years sales. When these goals are not met, managers, sales reps and others in the company complain 'that we are not making any money or cracking our nut'. In reality they are still making money but not meeting their projections. They equate not meeting their quota with 'not making any money' . This is a misnomer at best and an outright lie at it's worst. My opinion is that when Corporate Manager Steven Lett says : "There is more money going out than is coming in" what he really should be saying is: 'There is more money going out than is coming in relative to our current projections.' So my guess is that they have plenty of money to meet their expenses but are 'pissed off' because they are not getting the financial 'gravy' that they have built into their projections. Doubting Bro alluded to this 'corporate double talk' above when he spoke about the financing of assemblies. You give the members of the Governing Body too much credit in taking their begging for money at face value. Never trust a member of the Governing Body to tell the whole truth.
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Londo111
A year or two ago, there was a thread or post that pulled. It claimed to be from a person working in a certain financial institution and that Watchtower was in hot water with them. Whether or not it is credible, I don’t know.
Watchtower was a cooperation that wasn’t expecting to have a need of funding past October 1914. Then 1918. Then 1925. Then WWII. Then 1975. Then about 1984 or however long a 'generation' is. Then the end of the 20th century. And here we are in 2017, 103 years later. It’s amazing it has kept itself afloat this long.
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_Morpheus
Sparky, i agree with the basics of your post but there is one detail you mispoke on: the gb sre no longer the coporate heads. They gave that up to insulate themselves from the legal ramifications of their decisions. A big ort of what geoffery jackson’s ARC testimony was on that... gardians of doctrine and so forth. No legal control over the org only spritual heads, as it were.