Scientology's Money Trail
Celebrities! Tax shelters! Bart Simpson! A glimpse into the finances of the secretive church.
South Park has ridiculed it, protesters have attacked it, and Germany has tried to outlaw it. Yet the Church of Scientology still operates in 160 countries, with an extremely complex economic model that makes it hard for opponents to go after its finances. Ever since the 1980s, when it faced a potentially lethal class-action lawsuit and intense scrutiny from the U.S. government, the group has reportedly spread its revenues-and its liability-among a vast array of independent trusts, corporations, and nonprofits. All are reportedly tightly controlled by David Miscavige, a second-generation Scientologist who has run the church since the 1986 death of its founder, science-fiction author L. Ron Hubbard. Tax filings from the early 1990s show that the church was earning about $300 million a year back then, but the paper trail disappears after that. The church won tax-exempt status in 1993 and is not required to file annual returns with the I.R.S., so it's extremely difficult to tell just how much Scientology takes in during a given year. (Groups that don't have direct ties to the church's executive branch, or "Mother Church," as it's known, often act as separate legal entities and file taxes individually.) We asked a number of sources-ex-Scientologists familiar with the church's finances-to help us arrive at an estimate of its annual revenue.
According to a former Scientologist, a single 2007 event in the U.K. helped pay for dozens of new buildings and fueled a two-week pledge drive that netted nearly $50 million. The biggest recent U.S. gift was reportedly a $7.5 million donation from Nancy Cartwright, who does the voice of Bart Simpson. Other major donors include Tom Cruise, who's given an estimated $25 million over the years, Kirstie Alley, and Jenna Elfman.
Estimated revenue: $50 million to $100 million
Scientology boasts hundreds of organizations, centers, and missions around the world, which charge fees to members. (Followers also pay to be "cleared" of their problems via counseling sessions known as auditing, which average $500 an hour.) In something akin to a franchise model, the centers send 12.5 percent of such fees to Scientology's management arm. The biggest chunk comes from the Flag Service Organization, the church's largest center, in Clearwater, Florida.
Estimated revenue: $400 million
A web of church-related groups promotes the principles of L. Ron Hubbard. One licenses his management doctrines to small-business owners, particularly dentists and chiropractors, who pay fees in return. A portion of those licensing fees goes to a separate entity, which holds the copyrights to Hubbard's works and which some ex-Scientologists claim is connected to the church itself.
Estimated revenue: $50 million
As long as Scientology can keep generating huge donations while fending off lawsuits, its doors will likely stay open.
Total estimated annual revenue: $500 million to $550 millionVisitÂ Portfolio.comÂ for the latest business news and opinion, executive profiles and careers.Â Portfolio.com© 2007 Condé Nast Inc. All rights reserved.
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