Timing Tithing

In my understanding of the GHI, there is no answer to the question that I have about tithing, so I wanted to throw it out to get some feedback. The question concerns when one should pay their tithing. There are many members of the church who pay tithing on their income the moment that they receive it. Others pay it at the beginning of the month. Others pay it once a year. I am interested in whether or not one method is preferable.

As one’s tithing obligation increases, there are certain incentives to holding on to the money for as long as possible. For instance, to take a round number, if your tithing is $10K, and you choose to save that money in a pretty standard high yield savings account at 5%, you’ll make another $500 by year end. The advantage to the church is that they make an extra $50 in tithing and the advantage to you is that you make $450 for the year. One can imagine that these numbers can be even higher if the money is invested in accounts that have higher returns. The amounts increase greatly for high net worth individuals who could potentially make millions on “saved” tithing.

The problem is not simply one of making more money by saving tithing. Paying tithing early actually costs a great deal more. In this scenario, if you pay your tithing early, it costs you $10000 + $500 in opportunity costs. If you pay it late, it only costs you $10000 +$50 on the interest earned.

Given this scenario, there seems to be every reason to just pay tithing at year end, but my concern is that this might be immoral to “save” tithing money. If the church can get higher returns on your money, shouldn’t you pay early? Sure, it costs you in opportunity costs to pay tithing early, but it also costs the church in opportunity costs to pay tithing late. Where should your financial obligations lie, with yourself or the church? Whose profits should you be trying to maximize?

29 Replies to “Timing Tithing”

  1. Daniel,
    Unfortunately this is not a burden that I have to bear…
    If the rules are vague, I am not sure that God is going to give me an answer to this question. Why should he give the answer to me and not to the prophet? I don’t think that this is an issue that is going to be resolved by prayer, but more by the “studying it out” approach.

  2. Why stop there? If you only pay your tithing every ten or twenty years, you could get even more interest. Or maybe you could just leave it in your will as part of your estate.
    Or just don’t pay any tithing at all.

  3. For tithing settlement purposes, at least, it doesn’t matter when you pay tithing, as long as you pay it. So I don’t think there is anything wrong with timing your tithing for increaased savings or for tax purposes or whatever.

    But there are other factors at play. Personally, I’ve always paid tithing monthly, when I am paid. For me it is a psychological issue. It is hard enough for me to pay tithing in the first place; writing that $1,000 or whatever check every month is enough of a challenge anyway. I don’t want to put myself in the position of writing a $12,000 or whatever check once a year. In fact, once I got my first real job and had to start tithing real dollars, we rearranged how we did things and my wife took over the checkbook. I don’t mind paying tithing, but I prefer for my wife to actually write the checks–I get a little squeamish writing such large checks to the Church.

  4. TT,

    What I mean is that God purposefully made the rules for tithing to be vague so that we would decide for ourselves just how to pay, and how much to pay. The old issue still tearing at Mormons is whether to pay on the gross or the net. I don’t know any prophet that has cleared that up. Or when it says that we pay tithing on the “increase,” does that mean the profit we make, meaning after all our expenses, or does it mean something else?

    So when I ask if you’ve prayed to God to find out what it means to you, I don’t mean to pray to God to find out what he meant for the whole church but what he meant to you personally.

  5. I think the Church invests our tithing money once they get it. And if that’s the case then it’s a question of whether we want to profit from the interest gained or if we want the Church to profit from the interest gained.

  6. 1-Pay tithing when you feel it is right to do so.

    2-Anybody who tells you otherwise can go sit and spin.

    3-Don’t look down on people who think differently than you.

    In my never to be humble opinion, if more church members followed these rules, the world would be a happier place.

  7. First of all, I believe in the principle that we “are not commanded in all things” and that we are expected to figure some things out on our own. And so it seems that even a commandment as clear cut and basic as tithing will have aspects which require us to seek and follow the spirit in our own individual situations.

    However, with that said, it does seem to be a wise thing to pay tithing on our increase as soon as we receive it, whether that is weekly, monthly, or even yearly in some cases (I imagine that there are some individuals who have businesses which only show their “increases” on a yearly basis). At the very least, it does seem to be commanded that we are “current” with our tithing obligations at least on a yearly basis (hence the yearly “settlement”).

    I don’t think it is wise for anyone to delay their payment just for the purpose of an additional investment. There are just too many things that could go wrong. Granted, there are some pretty save investments out there which would almost guarantee a certain profit, but what would happen if you lost your job or experienced a medical or other emergency? Would you then be tempted to use your saved up funds for other pressing needs? And not be able to follow through with your previous tithing intentions? Life is filled with mispent “good intentions”.

    It seems like tithing is a principle like other gospel principles such as faith, repentance, etc. We should strive to be as “current” as possible and leave the financial outcome to the Lord.

  8. I think you are starting with the wrong question. Instead of asking “when do I need to turn my money over to God?” you should consider if the money was ever yours to begin with.

    Honestly I think that some people only give 10% of their income is offensive to God. We’d be served by our money better if we reduced our standard of living as much as possible and gave as much money away to worthy causes as we possibly could.

    The fact that you think that the church can wait a year to get your money communicates that you don’t think the church really needs your money all that badly to operate (a $2 Billion dollar mall under construction might be a reason for that). Maybe you should consider being generous somehow to someone who can’t wait a year for you to give. How about sponsoring a child in a third world country.

  9. My company offers a stock purchase program (with a maximum of 10%). For many years I’ve used this program and then when the stock is actually purchased (yearly) signed over my stocks as “tithing in kind”. Works great for me.

  10. Tithing is one of those things (perhaps like fasting) that is so very much left to individuals. Gross versus net, year end versus monthly versus weekly, all are left to the individual member. At tithing settlement, the reason the bishop shows the receipt is not to see whether the amounts look reasonable to him, but to get the member’s assurance that nothing was misplaced. He just asks, are you a full tithe payer? The answer of the member is pretty much all the bishop goes on — he never checks your W4 to see if the $ and the receipts match up :-).

    As proof of the latter point, a number of individuals I know pay their tithing directly to church headquarters via electronic transfer. I’ve been doing this myself for a couple of years. I find it easier — and it has the side benefit of keeping the ward clerk ignorant of your tithing information. At tithing settlement, all the bishop has record of is my fast offerings because I still pay those locally.

    At the risk of thread-jacking, once I looked at what data I could find publicly and concluded that about 5% of tithing goes to support BYU. That was a few years back, but it reminds me that I’m totally OK with whatever the Church decides to do with their funds.

    Dando, I agree with you that we should give as much as possible, I think Peter Singer’s arguments on this point quite compelling. He recommends 20% of our income. A rough calculation is that if one pays tithing on gross income, with fast offerings etc. we can easily get to 20% of net. The LDS church is one of the lowest overhead places to give, but that doesn’t preclude us from considering other sources. Remember that the First Presidency routinely supports the annual United Way campaign at the Church Office Building. This would suggest they agree with you that we ought to give beyond our obligations to the Church.

  11. There are a lot of opinions about this and I suppose the best answer is that you can’t declare yourself to be a full tithe payer unless you are current when you attend tithing settlement.  However, I did a search at LDS.org for the phrase “tithing first” and got 39 hits.  Visit http://ndbf.net/024.htm to read excerpts from 13 of them.

  12. Fortunately we have something here in the UK called ‘Gift Aid’. It’s how I pay my tithing and the upshot is I get the government to contribute an additional 28%… which I distribute over the offerings. A cool and very beneficial system!

  13. Just a comment about the interest rate and getting more by holding back… one year, because it worked better for us (stock option thing), we prepaid our total year’s estimated tithing in advance in March.

    We had to begin paying tithing again in June. The Lord blessed us with an unexpected 250% increase in income.

    Of course, ymmv.

  14. Thank you everyone for your comments. Marginal #11, please share more about how to make tithing payments directly to Church headquarters. I am interested in that. I like the idea of the ward clerk as well as the bishop not knowing what my income is.

  15. R. Gary: In my experience, people can and often do declare themselves to be full tithe payers at tithing settlement even if they are not current at the time of the declaration. The issue is not whether you are current at that moment.

  16. Gary:  For you it may have been different, but in my experience of more than fifty years it has always worked as follows:

    “Once a year each member is asked to make a special appointment with the bishop or branch president.  At this time he privately reviews our tithing record with us and asks us if we have paid a full tithing for the year.  This meeting is called tithing settlement.”  (“Lesson 30: Tithes and Offerings,” Duties and Blessings of the Priesthood: Basic Manual for Priesthood Holders,  Part B, 251.)

    The story “Twenty-Cent Sorrow” (Ensign, Dec 1991, 42) tells what happened in one case when a young eight-year-old child was not “current at that moment.”

    See http://ndbf.net/r001.htm

  17. I’m a firm believer in the once-per-year convention but, to be honest, that belief is based mostly on personal experience. As a youth I learned that my own stake president followed the once-per-year convention but that he took all the interest he earned from the tithing fund and contributed it to fast offerings so that’s the standard I adopted.

    I will say I am not a big fan of the pay as you go convention for one very big reason– events can happen throughout the year that can subtract mightily from one’s increase. I have twice taken a loss on a home that completely offset my income from my job for the year. When that happened it was nice to have that extra cash in hand. I seriously doubt when those events occurred that the church would have cut me a check for the amounts I had already paid for the prior 12 months.

  18. For anyone interested, I have it on good authority that President Monson pays his Tithing only once annually.

  19. If we waited to pay our tithing once a year, I would spend it.

    We pay tithing on our increase, for us, gross income less social security and retirement (which we may never see), once a month when we get paid. I actually think we might be overdoing the spirit of tithing. We tithe everything. But it is one commandment I can obey better than others.

  20. I’ve had this thought occur to me too (pay once a year at the end of the year). My reasoning is exactly as you stated in the post … you can invest it and then get more money off the top and consequently pay more tithing.

    The scriptural basis for this reasoning (in my view) came from the parable of the talents (Matthew 25:14-30). Just as we are to magnify our callings, so too can we maximize our tithe.

    I also agree with #7.

  21. Re #21: But in the parable of the talents, doesn’t the entire amount go to the master? Isn’t what you propose, in essence, investing what you already concede are the Lord’s funds, then give him only 10% of the earnings on those funds? So that you pesonally are making money on investment of funds you concede aren’t yours? I used to think I agreed with #7, but #21’s reasoning drives me the other direction. But after thinking about #21, I’m not so sure.

  22. About tithing…..First the Lord does not need our money. The principle of tithing was not for the Lord’s benefit, but for ours. He has said that he has given no temporal commandments, but only spiritual ones.

    If we have trouble paying an honest ten percent, how many of us are going to be able to participate in a higher law when the time comes?

    Tithing to us is like the ten commandments to the ancient Israelites….it is meant to prepare us for a higher law. If one cannot live the law of tithing now, can one live the law of consecration when called on to do so?

    Two major “projects” tithing is spent for is to build and maintain new meeting houses and Temples. One new meeting house is being finished every week somewhere in the world. I shouldn’t have to mention how fast new Temples are being built.

    Next time the heating or air conditioner goes out in your building, think about where the money comes from to fix it. Has the power been turned off lately? If not, then somebody must be paying the bills.

    As far as paying on the “gross” or the “net”, I suggest that you pay according to the blessings you expect to receive. You want gross blessing, pay on the gross. You want net blessings, pay on the net.

    I retired several years ago. I get a pension check and a Social Security check once a month. I pay my tithing (and offerings) every fast Sunday, and I pay on the “gross”, plus a little more.

    The “plus a little more” is to help cover what I draw from my IRA at the end of each year before tithing settlement time.

    I have absolutely no reservations about the Ward Clerk or the Bishop having my records available to them. This is the way that the First Presidency set the program up, and as Ward Clerk for twelve years I can say that it works very well.

    So if anyone has questions about tithing, I suggest that they ask their Bishop. As a common judge in Israel, he is entitled to inspiration when counseling the members of his ward.

  23. Send contributions to the Church Office Bulding attn: Treasury Services Division

    Here is a discussion on a church message board:

  24. Re: direct electronic donations.

    Since 2004, the Church has moved to the “Bill Pay” service that many banks offer.

    There is a form, called the Electronic Donation Information form.

    Once it is filled out, you email it to RE-FRD-Electronic-Donations@LDSChurch.org.

    You can probably get the form from that same email address, or if there is some way for me to post it here, I will do so. (Though, my version is from 2004, so it might be out of date.)

    One of the major benefits of this is that once it is set up, it is nearly fully automated on both ends: whatever you do on your end is just a few clicks at most, and with the new system, I was told via email from church headquarters that, “This does not require manual processing on our part when each donation is made and has allowed the reallocation of employee time to other areas.”

    Sorry for the long delay in responding.

  25. As far as paying on the “gross” or the “net”, I suggest that you pay according to the blessings you expect to receive. You want gross blessing, pay on the gross. You want net blessings, pay on the net.
    I hate this. I’ve hated it every single time I’ve read it in the last 10 years. It’s manipulative and precious. If you think people should tithe on the gross, why not just say so?

  26. Your post has some interesting points. One question that i like to ask people is to define a “steward” in one word. One word comes to my mind and that is “investor”. We are investors in the kingdom. Remember the master who left 3 of his servants with talents to watch until he returned. 2 of the servants invested what was given to them and returned double what the master gave them. The final servant actually returned 100% back of what the master gave him. We think that tithing 10% is a big thing but in actuality if we don’t grasp the concept that we are investors, and that God expects more back than what he’s given us, then we’re in trouble.

  27. There is nothing vague about this in Doctrine and Covenants 119:4.

    “4 And after that, those who have thus been tithed shall pay one-tenth of all their interest annually; and this shall be a standing law unto them forever, for my holy priesthood, saith the Lord.

    One-tenth of all your interest annually. The accounting period is closed annually — thus the tithing settlement. You are free to contribute more often, but you must tithe fully by the end of each year. It is not acceptable to contribute every 5, 10, or 20 years as one poster suggested (in sarcasm, of course).

    Also interesting to note that it says, “one-tenth of all their interest annually”. It is your interest, but you must set aside one-tenth of it for the Lord. If you have trouble keeping your hands off a savings account, or are tempted by risky investments, or if you just prefer it that way, then early and often is an appropriate mantra. Likewise I believe it is appropriate to pay quarterly, semi-annually, annually — but no less regularly than that. The Lord knows the thoughts and intentions of our hearts.

    These are of course my own opinions and interpretation, and are not binding on anyone else.

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