More Valuable Than Money

November 2012

In this election season, as with every recent election season, the topic of primary concern is the economy. But the finances on the mind of the folks at The Economist aren’t the same ones that are occupying the interest of U.S. election-watchers. Rather, the staff at this staid British publication has attempted to gaze deeply into the labyrinthine money-management habits of the Catholic Church. And the view, they say, is “not flattering.”

The finances of the Catholic Church in America are an “unholy mess,” The Economist reports (Aug. 18). The Church’s “management of money is often sloppy,” and unscrupulous churchmen have been engaged in “ungainly financial contortions” and “questionable business practices.” The sex-abuse crisis of 2002 and beyond has led to a “liquidity crisis,” the magazine asserts, which has “encouraged a pre-existing trend towards replacing dollars from the faithful with publicly raised debt.” Yet the Church’s “increased reliance on taxpayers has not been matched by increased openness and accountability.”

To quantify its case, The Economist offers some estimates of the aggregate finances of the Church in Amer­ica — estimates that were seemingly pulled out of a hat. The magazine states that “annual spending by the church and entities owned by the church was around $170 billion in 2010.” How they settled on this figure they’re not saying. But neither is the Church, which, the magazine hastens to add, “does not release such figures.” Nevertheless, the brave thinkers at The Econo­mist have attempted to track the flow of this twelve-figure outflowing: “We think 57% of this goes on health-care networks, followed by 28% on colleges, with parish and diocesan day-to-day operations accounting for just 6% and national charitable activities just 2.7%.” That last figure thought up by The Econ­omist seems frightfully low. Yet the magazine acknowledges the Church as “the largest single charitable organization in the country.” How could this be?

Before any of us tosses our tithing envelopes into the trash, let’s stop to consider that, as pointed out by Mark Gray, a research associate at Georgetown Uni­versity’s Center for Applied Research in the Apostolate, there is no such thing as the “U.S. Catholic Church.” There is no legal entity with that designation and, therefore, no CEO or board of directors overseeing the finances — either income or expenditures — of such an entity. While the Church at large is responsible for vast and impressive charitable works, it is not a “single organization.” As Gray notes, the “separate aspects of the Church operate for the most part independently — with their own leadership, budgets, revenues, and obligations.”

Why don’t the institutions that make up the Church in America “take the time to communicate their budgets and revenue together in an annual hierarchical manner so the Church can produce a financial report that The Economist needs for its story?” Gray asks. “Because it would be an extraordinary waste of the Church’s resources and time.” Moreover, the Church “has no legal obligation” to provide any such report.

It could be argued that the diffuseness of ecclesial structures is a defense mechanism borne of two millennia of struggling for survival amid all manner of foes who’ve sought to wrest away her wealth or eliminate her very existence. Whatever the historical origin might be — Gray chalks it up to the holdover of “feudal-like structures” that were “fashioned well before modern communication” — the Church has neither the means nor the inclination to collect and collate financial data from the various organizations that operate in her name.

Yes, the Church’s teaching office, as everyone knows, is highly centralized; the buck stops with the sitting pope. But the Church’s finances, as The Economist evidently fails to grasp, are highly de-centralized; as Gray puts it, “the pope is not a CEO sitting in the Vatican with a big map saying ‘build a parish here, a hospital here, and close that school over there.’” To expect as much is to severely misunderstand the role of the supreme pontiff.

Critics, even Catholic critics, often fault ecclesiastics for “speaking beyond their competency” when they discuss matters economic. Should the same criticism not apply to economists who pontificate on matters religious? To attempt to calculate the total wealth or spending of the disparate and seemingly numberless entities that comprise the Catholic Church is a fool’s errand. Guesstimates are as good as it gets.

But what about those “ungainly financial contortions” and “questionable business practices” in which churchmen have allegedly engaged? Here, The Economist can point to some actual hard data — and the data is hard to stomach. The article regales readers with tales of financial shenanigans and asset-reallocation by prelates who, under pressure from creditors and government audits, appear to give top priority to preserving the institution at any and all costs. Moreover, readers are reminded that “the molestation and rape of children by priests in America has resulted in more than $3.3 billion of settlements over the past 15 years.” Add to this the declining number of vocations, which has forced the Church to “pay people market rates” for jobs once handled by priests and religious, and the decline in donations from the faithful in the post-scandal recession years, and it comes as no surprise that dioceses across the nation have been closing and merging parishes, shuttering thriving schools, and even filing for bankruptcy protection in order to make up for widespread screwball monetary and personnel policies.

At least that’s the impression The Economist wishes to give.

To put the picture in bold relief, the magazine points out that the bishops in the State of New York have spent “a substantial amount” — ranging somewhere between $100,000 and “well over” $1 million a year — on lobbying the state assembly to keep the current statutes of limitation in place. Even worse, the magazine accuses dioceses of “raiding priests’ pension funds to cover settlements and other losses.” The worst-case scenario played out — where else? — in Boston: “Under Cardinal Bernard Law, the archdiocese of Boston contributed nothing to its clergy retirement fund between 1986 and 2002,” despite having received an estimated $70-90 million in parishioner offerings earmarked for the benefit of retired priests during that period. The Economist estimates that some 75 to 80 percent of clergy pension plans across the nation are underfunded.

Questionable? Check. Ungainly? Check.

Another troubling aspect of The Economist article is its charge that, in some municipalities, the Church has replaced declining offering-plate revenue with publicly raised debt: “According to figures from the Municipal Securities Rulemaking Board over the past decade, state and local authorities have issued municipal bonds for the benefit of at least 50 dioceses in almost 30 states to pay for the expansion and renovation of facilities that would previously have been largely paid for through donations.” In other words, where this has occurred, the Church “enjoys a subsidy more commonly associated with local governments and public-sector projects.” While the magazine admits that it’s not necessarily wrong for the Church to make use of municipal bonds, it has put the American taxpayer in the untoward position of having “indirectly helped mitigate the church’s losses from [abuse] settlements.” If so, this would amount to shifting the Church’s financial responsibility for her massive, systemic failure to protect the innocent charges in her care onto an unsuspecting public. Not only does this appear unethical, it smacks of immoral stewardship. And it raises serious questions about the efficacy of hitching Church fortunes to the government wagon in this age of state-sponsored secular encroachment into the religious sphere — think contraception mandates, same-sex marriage laws, homosexual-adoption orders, etc.

Despite the flaws in its article’s methodology and conclusions, The Economist has graced us with a valuable lesson. Although Catholics of a traditional bent are loathe to admit it, the Church can learn from the modern world. In this case, what the Church can learn is financial efficiency and financial transparency — in a word, accountability. “When you do not have transparency in accounting practices,” Jason Berry told Our Sunday Visi­tor (Sept. 9), “the system is prone to abuse, and that’s the kind of system we have.” The primary issue, said Berry, author of Render Unto Rome: The Secret Life of Money in the Catholic Church, “is not to estimate the value of the Church because it’s impossible, frankly, to put a net worth on the Catholic Church. The issue is how the money is managed, and if Catholics who contribute are being treated fairly by those who accept their money and use it.”

As the ancient Latin aphorist Publilius Syrus famously said, “A good reputation is more valuable than money.” If churchmen can consistently demonstrate their willingness and their ability to deal openly and honestly in the realm of ecclesial finance, then, as history has proven, the laity will have no reservations about giving freely, and the Church can continue her charitable works without resorting to unsavory entanglements with Uncle Sam, who never gives without asking something in return.

But we shouldn’t run too far afield with the lessons we take away from The Economist’s report. The Church should not be made over in the mold of a massive secular corporation. Nobody in his right mind can claim that modern corporations are paragons of virtue or are exempt from corruption or mismanagement. The Church’s mission — bringing salvation and service to human persons — is unique in the world; her focus shouldn’t be diverted by micro-focusing on business models or capital maximization. Still, there’s no reason why those “feudal-like structures” that still operate in the Church shouldn’t be updated and streamlined.

DOSSIER: Economics & Catholic Social Teaching

New Oxford Notes: November 2012

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