One of the most consequential stories in faith-based investing over the last several years has been the ongoing controversy around Ensign Peak Advisors, the investment arm of the Church of Jesus Christ of Latter-day Saints. This is not, strictly speaking, a story about faith-based investment strategy in the way I usually write about it. Ensign Peak does not use explicit religious screening of its investments. But the governance failures, transparency issues, and the broader questions about how religious institutions manage their reserve funds contain lessons that matter for anyone thinking about faith-based investing, whether as an institution or as an individual.

I want to work through what actually happened, what the broader questions are, and what the takeaways should be for anyone involved in faith-based investment decisions.

What Ensign Peak is and what it does

Ensign Peak Advisors is a private investment management firm that serves as the primary investment arm for the Church of Jesus Christ of Latter-day Saints, commonly known as the LDS Church. It was founded in 1997 and has built an investment portfolio that grew to an estimated $100 billion plus by the mid-2020s, though the exact size has varied over time and is difficult to confirm because of limited public disclosure.

The fund is funded primarily by tithing revenue from LDS Church members, who contribute 10 percent of their income under Church teaching. A portion of that tithing revenue goes to fund Church operations, but a significant portion has been set aside in Ensign Peak and similar investment vehicles over the years. The accumulated reserves have grown dramatically through a combination of continued contributions and investment returns.

For most of its history, Ensign Peak operated in near-total secrecy. The Church did not publicly disclose the size of the fund, its holdings, or its investment strategy. Most LDS members had only a vague idea that the Church held significant investment reserves, and the public at large had essentially no awareness of the fund's existence.

The whistleblower and the 2019-2024 controversy

The situation changed dramatically in late 2019 when David Nielsen, a former Ensign Peak portfolio manager, filed a whistleblower complaint with the IRS alleging that the fund had misused its charitable tax status. The complaint was first reported by the Washington Post in December 2019 and quickly became a major story in both LDS and mainstream media.

The core allegations in the original complaint were twofold. First, that Ensign Peak had grown to approximately $100 billion in assets, far larger than previously understood. Second, that the fund had used charitable assets for purposes that may not have qualified under tax-exempt status rules, including bailing out a failing LDS-owned insurance company and supporting commercial real estate projects.

The story continued to develop over the following years. In February 2023, the US Securities and Exchange Commission announced a settlement with Ensign Peak Advisors and the LDS Church totaling $5 million. The SEC's complaint alleged that Ensign Peak had failed to properly disclose its holdings through shell companies, effectively hiding the Church's investment activities from public view. The Church acknowledged the violations and agreed to improve its disclosure practices going forward.

In 2024 and early 2025, further reporting and disclosure revealed additional details about the fund's size, holdings, and governance. The estimated size has fluctuated but most recent reporting puts it somewhere between $100 billion and $150 billion, making it one of the larger institutional investment pools in the world.

What actually went wrong

I want to be careful not to mischaracterize what happened or to impose judgments that go beyond the facts. The formal legal findings were relatively narrow. The SEC settlement was about disclosure violations, not about misuse of funds. The IRS has not taken significant public action against the Church for misuse of charitable assets. So from a strictly legal perspective, the scope of the problems is smaller than some of the media coverage suggested.

That said, several things went wrong that are worth identifying because they matter for thinking about faith-based investment governance more broadly.

First, the level of secrecy around the fund was inconsistent with normal practices for institutional investment pools of comparable size. A $100 billion investment portfolio is larger than most sovereign wealth funds and most large pension funds, all of which disclose their holdings and strategies in significant detail. Ensign Peak's practice of using shell companies to hide its holdings was unusual and raises legitimate questions about why that level of opacity was considered necessary.

Second, the governance structure lacked the independent oversight that would be standard at any institution managing comparable amounts of money. The fund was essentially controlled by a small number of Church leaders without the kind of independent board, audit committee, or outside review that governs most large institutional investors. This concentration of control created risks that were not adequately managed.

Third, the relationship between the fund's assets and the Church's broader mission was not transparent to Church members, many of whom had been tithing for decades without knowing how large the accumulated reserves had become. This created a tension between the Church's stated mission (which includes charitable work, building temples, and supporting members) and the actual use of funds (which had accumulated far more than could reasonably be needed for current or near-future charitable purposes).

Fourth, the fund's investment strategy itself was not inherently problematic but was also not designed with any reference to religious values. Ensign Peak invests in conventional stocks and bonds through passive and active strategies, similar to any other institutional investor. The fund does not apply LDS-specific screens or faith-based considerations to its holdings. This creates an awkward situation where an institution funded by religious contributions invests in companies and industries that might be in tension with the donating community's values.

The broader questions this raises for faith-based institutions

The Ensign Peak controversy is specific to the LDS Church, but the underlying issues apply to any religious institution that manages significant reserve funds. Catholic dioceses, evangelical denominations, Jewish federations, Islamic waqfs, and other faith-based institutions all face similar questions about how to manage their investment assets in ways that are consistent with their missions and accountable to their communities.

The biggest question is transparency. How much should religious institutions disclose about their investment holdings and strategies? The traditional answer has been that these are internal matters that should be handled privately. The Ensign Peak experience suggests that this answer no longer works in an era of investigative journalism, whistleblower protection laws, and heightened public expectations of transparency from all kinds of institutions. Religious institutions that maintain opaque investment practices are going to face increasing pressure to disclose more, and they would be better off disclosing voluntarily than being forced into it by regulators or media coverage.

The second question is alignment between stated mission and investment practice. If a religious institution raises money from its community under the banner of religious mission, should the investment of those funds be aligned with the same religious values? Most Catholic dioceses say yes, and they apply at least some Catholic screening to their investment portfolios. Most Islamic waqfs say yes, and they use Shariah-compliant structures. But other religious institutions, including Ensign Peak and several evangelical denominations, invest without explicit values screens, and this creates a consistency problem that is harder to justify than it used to be.

The third question is accountability. Who should religious institutions be accountable to for their investment decisions? Historically, the answer has been that religious institutions are accountable only to their internal governance structures (bishops, elders, trustees). But as the Ensign Peak case shows, internal governance can be inadequate when the amounts of money involved become very large and the oversight structures do not include independent perspectives. More strong accountability mechanisms are probably needed, and what those mechanisms should look like is an open question.

The fourth question is the relationship between reserves and mission. If a religious institution accumulates billions of dollars in investment reserves, at what point does that accumulation itself become inconsistent with the mission? A charitable institution is supposed to use its resources for charitable purposes, not to accumulate wealth indefinitely. How much is enough? How should the balance between current spending and long-term endowment be managed? These are hard questions that different institutions answer differently, and the answers matter both morally and practically.

What lessons retail faith investors should take

If you are an individual faith-based investor reading this, you might wonder what relevance a story about a $100 billion institutional fund has for your personal investment decisions. Let me suggest a few takeaways.

First, the Ensign Peak story is a reminder that the governance of institutions matters, including religious institutions. When you contribute to a religious organization, you are effectively delegating decisions about how your money is used to that organization's leadership. You should care about how those decisions are made, what accountability exists, and whether the leadership is acting consistently with the institution's stated mission. This is true whether you are LDS, Catholic, Muslim, or any other faith tradition.

Second, the story is a reminder that transparency is a good default. Institutions that make their investment practices public are easier to evaluate than institutions that hide them. When you are deciding which religious institutions to support or trust, the ones with more transparent investment practices are generally safer bets than the ones with less transparent practices.

Third, the story is a reminder that values-alignment in investment is not automatic just because money is managed by a religious institution. You cannot assume that a Catholic diocese is investing in ways consistent with Catholic social teaching. You cannot assume that an Islamic waqf is holding only Shariah-compliant assets. You cannot assume that any religious institution is applying the kind of values screens you might apply yourself. If this alignment matters to you, you need to ask questions and expect answers.

Fourth, the story is a reminder that individual Muslims, Catholics, Christians, and others should not outsource their values-based investment decisions entirely to institutional intermediaries. Even if your denomination or religious institution manages money on your behalf, you still have an individual responsibility to think about how your own money is invested. The Ensign Peak controversy happened in part because members trusted the Church to handle investment decisions without asking hard questions. The lesson is that trusting but verifying is probably a healthier stance than blind delegation.

Where this goes from here

The Ensign Peak situation is still evolving. The Church has improved some disclosure practices but remains more opaque than most comparable institutions. The IRS has not taken significant additional action. Media coverage has died down from its peak but continues intermittently. For most LDS members, the immediate impact on their faith practice has been modest, and the controversy has not fundamentally changed the Church's operations.

The longer-term impact may be larger. The story has raised public awareness of religious institutional investing in ways that did not exist before. Other religious institutions with significant reserve funds are probably more aware now that their practices might face similar scrutiny. Whistleblower protections are more strong, and media interest in religious finance is higher. The next religious institution that faces a similar controversy is going to find that the public is more primed to take the story seriously.

For the faith-based investing industry more broadly, the Ensign Peak controversy is a kind of cautionary tale that sits alongside the positive growth stories. Most of the time, I write about how faith-based investing is growing, improving, and becoming more mainstream. But the Ensign Peak case is a reminder that faith-based investing also has to grapple with the same governance challenges that affect all institutional investing, and that religious affiliation does not exempt institutions from the need for transparency, accountability, and careful stewardship of resources entrusted to them.

Those lessons apply whether you are managing $100 billion for an LDS reserve fund or managing $10,000 in your personal halal portfolio. The stakes are different but the principles are the same.

The $100B LDS Reserve Fund Scandal: Lessons for Faith Investors