Analysis of Watchtower Real Estate Holdings

When I joined the Jehovah’s Witnesses in 1973 they presented themselves as an Organization that concerned itself with determining scriptural truth and spreading it to the world at large.  Money was not a concern (or so they said). They did not pass a collection plate at meetings, they sold their literature at low cost.  Since leaving the religion, I have been interested in their financial arrangements, but information is scarce.  Personal background: before retiring, I worked as an accountant in several real estate investment and development firms.  I’m basing the following analysis on my work experience and available public records.  

Over the last few years, the Watchtower Bible and Tract Society sold its properties in Brooklyn, that served as the religion’s international headquarters since 1908.  These sales netted hundreds of millions of dollars for the Society.  At the same time, the Watchtower purchased two hundred fifty-three acres in Warwick, New York and began construction of an extensive new (and reportedly luxurious) headquarters.

New rules govern financial practices locally.  In the past, congregations borrowed money from the Society for the purchase, construction or remodeling of their Kingdom Halls.  The congregation repaid the loan with funds collected from their members. Recently the Society stopped collecting those mortgages.  Instead, congregation members pledged donations to the congregation, which then made a pledge to the Watchtower Society.  Some internet correspondents report that at least some Witnesses believe the Watchtower forgave their debts and they no longer owe the Society anything. Mortgages go away when paid off, pledges last forever.   Additionally, the Watchtower Society instructed all congregations to send “excess funds” to headquarters.  This includes reserves set aside by some locals to provide for future renovation of their Kingdom Halls.

These new arrangements aroused my curiosity. What did this say about the relationship between Society and congregations?  Who controlled the assets locally?  From the outside (or even from the inside) the congregations appear to be independent entities.  I looked up my old congregations on the Washington Secretary of State’s website, all are registered as nonprofit corporations.  County records show these corporations as owners of the Kingdom Halls.  I cannot find a public copy of the corporations’ bylaws, which would detail control of the assets.  I was curious if these documents place control of assets with the congregations or the Watchtower Society.

As it turns out, it doesn’t make any difference what the bylaws say.

In 2010, two former elders of the Menlo Park, California congregation sued the current elders.  The two asserted the Watchtower illegally removed them so it could appoint men who would do the society’s bidding with locally held assets.  The court dismissed the suit on First Amendment grounds.  The judge stated the Jehovah’s Witness are hierarchical religion, that is one with a top-down leadership. In the United States, the government cannot interfere in what amounts to an internal religious dispute.  Note: this is not a new legal decision, just a clear statement that a long-standing principle applies to the Watchtower. (Transcript available at: http://jwleaks.files.wordpress.com/2013/10/february-22-2012-court-trial-transcripts.pdf)

This means that, legally, the Watchtower Society has final control over all the local congregations’ assets.  In the event of a dispute, the courts will leave control with the Society. The ex-JW community online has buzzed with discussion of the Watchtower’s “seizure” of the local assets.  In fact, they already belonged to the society.  What does this mean for the Watchtower’s financial operations?

There are 13,700 Congregations in the US (http://www.jwfacts.com/statistics/reports-service-memorial/2013-watchtower-publisher-report.pdf).  Some congregations share Halls, so the number of Kingdom Halls is less than this.  A search (admittedly brief) of tax records shows that several Kingdom Halls in Seattle and its suburbs are valued about four hundred thousand dollars, as are several in Spokane.  Rural Kingdom Halls that I could locate have values around two hundred thousand dollars.  The most expensive Hall I found was in Spokane, it also has a house on the property pushing the value to seven hundred thousand.  The least expensive Hall I could find is in Texas, with a value just over one hundred thousand dollars.

Taking these numbers together, we can establish a rough value for the Watchtower’s Kingdom Halls.  At the low-end, five thousand Kingdom Halls worth an average of $200,000 equals a real estate portfolio of a billion dollars.  If there are seven thousand properties and they are worth an average of $300,000; that number goes over two billion dollars.  These calculations do not include assembly halls. According to the Pierce County assessor, the one in Puyallup Washington is worth just under five million dollars.

Clearly, the Watchtower Society is sitting on a valuable portfolio of properties in the United States.  My next post will discuss how this might fit in with the overall finances of Jehovah’s Witnesses, and possible conflicts with the Society’s leadership.