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Dec 08 2013

Scientology’s weird business model

In reading Lawrence Wright’s book on Scientology titled Going Clear (that I reviewed earlier) one thing that struck me was the organization’s determination to acquire real estate in major cities.

The organization’s membership not large and in fact dwindling but they do have a lot of money and the real question is how they raise it. They charge for their so-called auditing classes that are supposed to release their followers from the ‘body thetans’ that have infected them and hold them back from achieving their full potential (don’t ask, but if you must know, you can read the review for more), and these classes get ever more expensive as you go to the higher levels, lured by the tantalizing promise of achieving almost superhuman powers. They also get a lot of money from the rich celebrities they cultivate, which shows that money does not correlate with good sense.

But another source of funds is what they raise for purchasing buildings in cities for new churches. They really put the screws on their followers to contribute to buy properties and do massive renovations to make them into showy eye-catching symbols of affluence. But since the numbers of followers are not large, very often these building end being unused and unoccupied, even just boarded up.

Kelsey Campbell-Dollaghan discusses this strange business model and how it has resulted in the city of Philadelphia suing the church over one such property.

The Church of Scientology has reportedly spent roughly half a billion dollars buying up buildings in U.S. cities over the past few years—but, in many cases, these huge buildings have remained vacant. Now, the city of Philadelphia is taking the church to court over an empty tower.

Using $7.85 million in donations, the church bought the 15-story Cunningham Piano building in downtown Philly back in 2007. The idea was to renovate the tower into a “cathedral” called the Philadelphia Freedom Org, which would broadcast L. Ron’s message to the good people of greater Philly. Instead, the building has sat untouched for six years.

But the Cunningham Piano building is far from the church’s only major real estate holding that has been left abandoned in recent years. According to a New York Times story from 2010, increasing its property holdings is part of the church’s strategy of projecting major growth—despite the fact that its numbers are reportedly dwindling. Scientologists call these structures “ideal orgs,” or prominent urban buildings that bring attention to the church’s mission. They are purchased with donations aggressively wrung from members, and they are often left empty for years pending more cash to complete interior renovations.

“If you find just the right building, you’re going to snap it up if you can, even if you’re not ready to start construction right away,” a Scientology spokesperson told the NYT by way of explanation, while professor and Church of Scientology author Hugh B. Urban gave another explanation, saying it “could be a marketing strategy to give the appearance that Scientology is in a period of massive growth, which would in turn attract people. That’s the kind of thing they’ve done, historically.”

Far be it from me to look askance at the business model of an organization that has acquired great wealth over a relatively short time, but the whole thing seems crazy and unsustainable to me. Dumping a lot of money into buying and refurbishing buildings that then sit inert for years hardly seems like a good business model. What it does do is leave many of their members impoverished and exhausted from continuously being pressed to come up with more money.

For those who want to keep up with the Scientology follies, you should read Tony Ortega’s The Underground Bunker that keeps tabs on the church’s goings on. One thing is becoming clear. After long being an organization that was highly secretive about its doctrines and practices, it has now started leaking like a sieve, with defectors increasingly speaking out despite the threats of harsh retributions.

2 comments

  1. 1
    k_machine

    As power hungry organizations goes, Scientology is pretty much a joke.They got the Sea org that is supposed to be this elite, the Scientologist brown shirts or Jesuits, and what do they have them do? Members in the prime of their life are doing menial labor, scrubbing pots and pans etc. Upper management is kept locked up perpetually rearranging the organizational charts. They are mainly a threat to themselves, an abusive machine.

  2. 2
    Jockaira

    but the whole thing seems crazy and unsustainable to me. Dumping a lot of money into buying and refurbishing buildings that then sit inert for years hardly seems like a good business model.

    This is actually a powerful business model

    They are purchased with donations aggressively wrung from members, and they are often left empty for years pending more cash to complete interior renovations.

    This wouldn’t work for a commercial investor or an individual. Remember that the Church of Scientology can skate on the property taxes from now until the end of time in most jurisdictions and because of Scientology’s size, fire and liability insurance on the property make little financial sense. After purchase, and even with leverages from other properties and assignments from individual Scientologists, the owning of this property is essentially free with negligible overhead while long-term appreciation proceeds apace.

    Donald Trump would kill dozens or kiss thousands of butts to get a deal like this.

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