Just like other denominations in the Netherlands, the Jehovah’s Witnesses fall under the ANBI scheme (Algemeen Nut Beogende Instelling) of the Tax Authorities. This arrangement gives the denominations a major tax advantage: they do not pay inheritance and gift tax themselves and donors are allowed to deduct their donations from income or corporation tax. In addition, ANBIs are allowed to make donations themselves, on which no tax is levied.
As a legal form, the Jehovah’s Witnesses are therefore a denomination. This is based on the provisions laid down in the Constitution freedom of religion and those associated with it freedom of organizational design. In this article we look at how the Jehovah’s Witnesses have organized their organization financially.
Listen to the radio broadcast of Wil van der Schans and Sofia van Nuffel:
With God’s hand
We speak with Kees, a pseudonym, because he does not want to be bothered by his past in his current life, namely 50 years with the Jehovah’s Witnesses. He was an elder, but was eventually disfellowshipped. Kees knows what he is talking about when he explains how tightly the organization is managed. “Yes, the rules that apply here in the Netherlands apply in every other country. So it was always said with pride: ‘You can Watchtower (magazine, the most important publication for Jehovah’s Witnesses, ed.) to Australia and exactly the same is taught there’. The way elders dictate to the community is entirely dictated by the headquarters in New York.”
Structure Netherlands
The strict doctrine thus goes hand in hand with a tight leadership, although the local structure seems to guarantee some autonomy. As with other denominations, the local congregations have their own legal entity. The commitment to the denomination ensures that the local chapters ultimately always comply with the global rules and supervision from the headquarters. All actions, including financial ones, must be accountable to the top, the head office in New York.
Freedom of religion is now a great asset in the Netherlands, which is laid down in Article 6 of the Constitution. The ecclesiastical autonomy that goes with this is elaborated in the Netherlands in Article 2.2. of the Civil Code, which stipulates that religious denominations may draw up their own rules as long as ‘this is not contrary to the law’.
This provision is important in the context of the policy of the Jehovah’s Witnesses that prohibits members from contacting ex-members who have left: the so-called shunning policy.
In a response from the Jehovah’s Witnesses to earlier Pointer broadcasts on this subject, they acknowledge that exclusion exists as a principle. If a baptized Witness makes a habit of breaking the standards of the Bible and is unwilling to change, he or she will be disfellowshipped. The Jehovah’s Witnesses do write that the excluded may come to services at all times, they base themselves on the right to religious freedom.
Currently in the Netherlands considered whether this shunning policy can be tackled under criminal or civil law. At the request of Minister of Legal Protection, Franc Weerwind, things are going well Scientific Research and Documentation Center (WODC) to conduct research.
In Belgium, ex-Jehovahs – after a previously won lawsuit – appealed on June 7, 2022 no got right. In the case won, the judge had sentenced the organization last year to a fine of 96,000 euros for incitement to hatred and discrimination. The decision was reversed on appeal, citing freedom of religion as the main reason.
Practice
As in Belgium, voluntary contributions from the members form the basis of the financing of the Jehovah’s Witnesses. But here there is a reasonably ‘coercive’ character behind the voluntariness, Kees explains and he tells how it works: “From the podium, the Elders call for certain amounts to be donated per month and then notes are handed out with amounts per month. person. A resolution is then called on stage and asked, who does not agree with this? And of course, no one dares to say: ‘I do not agree with this’.”
And those donations went into the boxes (and later mostly online), one donation for the so-called ‘worldwide work’ and one donation for the local church. The money collected for the worldwide work is transferred every month to the central office of the Netherlands: in Emmen. This money is used for various purposes, such as literature, branch costs, volunteer costs, video production, and part of it goes through the branch to New York.
The money raised for the local congregation is for the operation of the Kingdom Hall. The money that is left over is used to donate to the worldwide work, and it can add up. The local municipalities are advised not to build up a reserve. The money that is left should be ‘donated’ to the worldwide work.
Members then have a tax advantage, because donations are deductible, but the biggest profit is with the heirs, says Kees. “It regularly happens that inheritances are transferred in whole or in part.”
Tax benefit
So the cash flow is, because of the ANBI status, completely tax-free. It also means that no inheritance and gift tax has to be paid and that energy tax can be reclaimed. And gifts can can be deducted from income tax by the donors.
Because both the donor and the institution have a financial advantage, less tax money is received by the government. The ANBI scheme now brings 600 million euros less per year to the tax authorities: 367 million euros in donations deduction and 215 million euros through the exemption from inheritance and gift tax.
The exemption is subject to a number of important conditions, the most important of which is that the requirement that the activities should be aimed at the common good.
In addition, must annual statement of income and expenditure requirements must be met integrity (no drivers suspected of a crime), a current policy plan can be handed over, directors may not have a majority in control of the assets and the assets must be in reasonable proportion to the activities .
However, there exist exceptions on the publication obligation of religious denominations. For example, the names of the directors do not have to be made public and no balance sheet has to be publishedso that the power is not known. In addition, the denomination does not pay property taxes for the buildings used for public worship.
Financial insight
An important condition for ANBI foundations is the publication of financial data. From 2016, religious denominations must also publish the data, i.e. make it accessible to everyone. Earlier research by Pointer showed that many organizations with an ANBI status do not comply with this. The Jehovah’s Witnesses do publish, but with a more or less closed door. The annual reports are not published on their own website, but on a site that cannot be found by Google https://jw-anbi.nl/ In other words: the publication requirement is met, but transparency is limited.
And then?
And once we have found that website, will we also get a solid financial insight through the mandatory publications? The answer is no, because the annual reports do not really contain much information. There are donations for the own congregation and for the worldwide church. What is striking in Amsterdam, which we took a closer look at, is that a lot is donated for the municipality, but more is spent on the worldwide work. In some years, half or more of the donations to the congregation ultimately flow into the coffers of the worldwide organization.
Kees recognizes this image, and explains that in such cases the Elders have sometimes prepared a resolution that was presented to the congregation. “People who were against could vote against it, but of course that didn’t happen.”
A web of foundations
There are two more foundations that fall under the management of the central office of ‘Emmen’. You could call them the ‘main foundations’:
– the Christian Congregation of Jehovah’s Witnesses in the Netherlands and
– the Watchtower, Bible, and Tract Society.
Both also have an ANBI status and report their income and expenses. Exactly how and where this comes from (church members and/or other non-profit institutions) is not clear in the published documents. It is clear that it runs into the millions. Ex-Witness Kees knows that everything that remained after publication in his municipality went to ‘Emmen’. Amounts are known on the expenditure side, but the description of the items explains little.
Under pressure
In 2019, the WODC published a report on abuse and transgressive behavior within the community of Jehovah’s Witnesses. The organization reacted so reluctantly that questions arose about the legitimacy of the ANBI status. For example, MP Van Toorenburg of the CDA wondered: “If you are an institution of general benefit, but you are not prepared to look at how you can protect children, what use are you then?”
In May 2018, then Minister Dekker of Legal Protection announced that he would look into the ANBI status. The research, conducted by, among others, René Bekkers, director of the Center for Philanthropy at the VU, was published in June 2022. The committee had to investigate explicitly what possibilities there are to prevent organizations that undermine common social values and views from benefiting from tax exemptions and other tax benefits. Bekkers explains that it is a point of attention, but that the Tax and Customs Administration is not equipped for this. Out ‘Supervision of Public Benefit’ a picture emerges that it is fairly easy to get an organization into the ANBI scheme and that there are seldom checks afterwards. “Just like you, the Tax and Customs Administration is also looking for such a website on which the documents can be published. Real checks only take place at random, if there are indications that something is wrong with one of the more than 40,000 ANBIs,” says Bekkers.
There is no test for fundamental rights and, as far as the researchers are concerned, there should not be, as the Tax and Customs Administration is insufficiently equipped for that. Beckers: “People work there who understand finance, not human rights, so a fundamental rights test by them is impossible. Such a test could be carried out by a judge or, for example, the Board of Human Rights”.
Marnix van Rij, State Secretary of Finance, will respond to the report after the summer. Ex-members united in the Foundation Against Watchtower Shunning will also come after the summer with the result of their own preliminary investigation into legal proceedings against the Jehovah’s Witnesses