The Economist chides Catholic Church on its finances

When a story uses extra adjectives or adverbs to pretty up a story, you know something might be fishy. If the information, data and narrative can’t speak for themselves, it’s worth reexamining the piece more closely.

I had that fishy feeling when I read The Economist‘s lengthy piece on the Catholic Church’s finances amidst the abuse scandals. On first read, you could spot strange word choices, ones an editor would often delete. Right up top, the writers make judgments before you can even read and decide for yourself. See the words I bolded for examples:

[T]he finances of the Catholic church in America are an unholy mess. The sins involved in its book-keeping are not as vivid or grotesque as those on display in the various sexual-abuse cases that have cost the American church more than $3 billion so far; but the financial mismanagement and questionable business practices would have seen widespread resignations at the top of any other public institution.

The piece hammers away before you can begin to understand how The Economist comes to its conclusions.

The picture that emerges is not flattering. The church’s finances look poorly co-ordinated considering (or perhaps because of) their complexity. The management of money is often sloppy. And some parts of the church have indulged in ungainly financial contortions in some cases—it is alleged—both to divert funds away from uses intended by donors and to frustrate creditors with legitimate claims, including its own nuns and priests. The dioceses that have filed for bankruptcy may not be typical of the church as a whole. But given the overall lack of openness there is no way of knowing to what extent they are outliers.

Can we safely say it’s time to strike “legitimate” from our vocabularies? Really, it’s unclear what the reporter expects of the Catholic Church’s financial openness before you can get into how it’s “sloppy.”

The church is also increasingly keen to defend its access to public health-care subsidies while claiming a right not to provide certain medical services to which it objects, such as contraception. This increased reliance on taxpayers has not been matched by increased openness and accountability.

When you finally get down into the numbers, you can see for yourself how the finances play out. The piece offers some interesting details and you can get a grasp of where the resources go, but the snark runs throughout the piece into the graphics (“Many mansions”) and images chosen for the piece (Timothy Dolan is Manhattan’s largest landowner?).

Before you assume looking at the Catholic Church’s finances is like looking at just any old spreadsheet data, you have to take other factors into account. While I got hung up on the piece’s writing, Pittsburgh Post-Gazette‘s Ann Rodgers posted the following comment on her Facebook page (reposted with her permission):

While much of this is very interesting, I think the author mixes apples and oranges. Catholic hospitals are rarely under diocesan control for anything other than doctrinal purposes. To talk about hospital access to municipal bonds in the same paragraph as discussions of diocesan financial woes due to abuse suits shows a poor understanding of church structure.

Ding, ding, ding! If you read her reporting, Rodgers “follows the money” as much as another scrutinizing reporter, but she also knows how to follow it with an understanding of how the Catholic Church works.

To flesh out Rodgers’s initial reaction, we have a post from Nineteen Sixty-four, a research blog for Georgetown University’s Center for Applied Research in the Apostolate, a non-profit research center that conducts social scientific studies about the Catholic Church.

Recently I was contacted several times by a reporter at The Economist for some data. I’ve always felt that this is one of the last few intelligent magazines on the racks. But I also recall being concerned after speaking to this reporter and thinking, “he doesn’t quite get the Church.” He seemed stunned to find out that the Catholic Church in the United States doesn’t have a neat and tidy set of financials done annually. He felt the Church should be doing what any multinational corporation would do. I kept telling him the Church is not Walmart.

Mark Gray emphasizes that he does not think The Economist is anti-Christian, but instead he carefully goes through and shows how the reporter assumes too much, misunderstanding the Catholic Church structure along the way. Read it all. Right now.

The Economist report could be pretty interesting if it weren’t couched in such a snooty assumptions and wording. Even if you don’t study the Catholic Church like Gray does, you can still sniff out a poorly reported story. Why can’t the numbers, used and compared appropriately, speak for themselves?

Reprimand image via Shutterstock.

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  • deiseach

    The piece is right in that the finances are not run like a business, and that parish priests are not trained to handle finances, and that probably lay expertise should be used more.

    But each diocese runs its own affairs; it’s not like the Church in America (or any other country) is structured with the cardinals, say, being the Board of Directors and one of them being a C.E.O. and (for example, since they used Cardinal Dolan) one boss who is accountable and that there is a signed-off set of accounts and strategy flows downward and is implemented by bishops (as middle-level management) and priests (as factory floor employees).

    Anyone who thinks Catholicism is an organised religion is not getting it :-)

    • Sarah

      Do read the Mark Gray piece. I think you will resonate with it.

  • Thomas A. Szyszkiewicz

    This Economist piece shows that they get the secular economy, but they don’t get the Catholic Church at all. As Ann Rodgers said, they’re comparing apples and oranges. They don’t understand anything about the structure of the Church at all (I wish those html codes were here). They don’t understand that subsidiarity is a real principle in the Church and that, the Archdiocese of New York notwithstanding, the real corporate structure is that each parish and diocese is its own juridic person. If anyone wants a tutorial on this, I offer my own observations here: http://epiph.blogspot.com/2006/01/who-owns-church.html

    Bottom line: the Pope does not own the Church. There is no central accounting office. Instead, each leader (bishop, pastor, hospital CEO, college president, high school principle, etc) is responsible for his own jurisdiction and the money those individual jurisdictions have is theirs to use in the way they see fit. Yes, there are dioceses that screw things up. Big deal. That happens all the time in all kinds of entities. But this is the Catholic Church, not corporation (http://nybw.businessweek.com/stories/2008-10-27/its-the-catholic-church-not-corporationbusinessweek-business-news-stock-market-and-financial-advice)

    • Sarah

      Thanks for adding these links to further your point. We’ll have to look into adding HTML to the feature. Thanks for your patience as we transition.

  • liberty

    As I read the article it was increasingly clear that neither the author nor the editor was an American or a Catholic. Even worse they didn’t think to perhaps run the article past and American or a Catholic.

    The point that really stuck out to me was when this was included “Another source of revenue is local and federal government, which bankroll the Medicare and Medicaid of patients in Catholic hospitals, the cost of educating pupils in Catholic schools and loans to students attending Catholic universities.”

    Really? Perhaps in some places with voucher programs there are a few Catholic school students costs ‘bankrolled’ by the government. However every Catholic School I know of is entirely tuition and donation ‘bankrolled’.

    Having lived in the UK I know that their Catholic Schools are paid for by the government and evidently this author assumed (never a good thing in journalism) that the same holds true here.

    I am also struck that the Economist thinks that providing loans to individuals who then choose to spend it at any kind of college (public, private, Catholic, Baptist) means that the government is bankrolling the colleges.

    • Sarah

      Good points. I don’t think the reporter or editors have to be American or Catholic, but as you suggest, it would have been advantageous to at least run it by someone.

  • Jettboy

    Int this the same magazine that was critical of Mormon economic practices? I sense politics rather than ignorance.

  • dalea

    The wording does not strike me as unusual for an audit report; I have seen comparable terms in purely secular audits. And the word ‘mess’ has a fairly financial meaning. Being snarky and spiteful is fairly standard standard for auditors. While this may seem out of line to religion reporters, it is not for auditors.

    The problem I see here is that the Economist is trying to get a grip on how the finances are structured: where the money comes from, where it goes, and how it is accounted for along the way. They seem to get a firm but hazy view of the first two and get lost in trying to sort out the accounting part. The over view of the accounts in San Diego is baffling. Why are all different sorts of monies put into what looks like one account? And why is it a simple bank deposit account? Would it not make more sense to have separate accounts for the various parishes? And to have endowments etc in investment funds not bank accounts? The reporting raises far more questions than it answers.

    • Sarah

      More good questions, thanks. I maintain, though, that a reporter doesn’t have to spice up the language for it to be an interesting story.

  • dalea

    For me, the key to the article was when the word ‘comingle’ came up. This is a major financial issue, one any fiuciary must immediately report. The rest of the report tracked down problems caused by comingling.

    The question I came away with is: does the RC comply with GAAP (Generally Accepted Accounting Principals) ? The article clearly show s that it does not. This is not a religious issue, but an economic one. Which is what I would expect of the Economist.

    • Thomas A. Szyszkiewicz

      “The question I came away with is: does the RC comply with GAAP?” Because of the extremely decentralized structure of the Church, this is an impossible question to answer. The problem with The Economist piece is that they do not allow for that decentralized structure. They extrapolate from one diocese to the entire Church in the U.S. and since every single diocese is its own entity, that’s an impossible extrapolation.

      For instance, they cite the Diocese of San Diego as a prime example of what’s wrong. But I can tell you that the most rural diocese in the U.S., the Diocese of New Ulm, Minn., is run by a bishop who was a CPA before he entered the priesthood. I’m willing to bet the books in his diocese are in tip-top shape. San Diego may have comingled its assets — and that’s a serious accounting AND canonical issue (yes, there are canon law issues involved here and the bishop could be held accountable for that) — but that doesn’t mean all of the dioceses are doing that.

  • Deacon Jim Stagg

    As Gray successfully points out, and, as this discussion is headed, the writer, nor his editors, “get” the Catholic Church….anywhere. Each parish is run as an entity, hopefully with the help of a Parish Finance Council (sometimes “optional”, based on the Pastor). Each (arch-)diocese is run as an entity, with assessments and donations from the parishes. Hopefully, there is a diocesan Finance Council to advise the (Arch-)Bishop. Are audits done? Yearly in my archdiocese, and the audit report prominently published on multiple pages of the diocesan paper. Is that done EVERYWHERE in the world? Who knows? Probably not even the Holy Father himself knows!

    And, no, the parishes are NOT audited regularly. That has been a problem and may continue to be, where Pastors operate on the premise the offertory income and donations are HIS to disburse and use. There are not enough auditors employed in our archdiocese to audit all the parishes, and the expense of an “outside audit”, as paid for by this archdiocese, is substantial. To somewhat complicate matters, many parishes still use pen and ledger, as they do for their church records (baptisms, confirmations, marriages, etc.), so NO electronic record may even be available for an “overall” look at collections and expenses.

    Just from my experience………………

  • deiseach

    I recently saw a Scripture reading which addresses the whole issue; way back when the Church was established, the Apostles decided that their role was as preachers and not accountants, and this tradition has carried on up to the present time, which is why bishops don’t (in general) have accounting or management degrees:

    Acts 6: 1-5
    ” And in those days, when the number of the disciples was multiplied, there arose a murmuring of the Grecians against the Hebrews, because their widows were neglected in the daily ministration.

    2 Then the twelve called the multitude of the disciples unto them, and said, It is not reason that we should leave the word of God, and serve tables.

    3 Wherefore, brethren, look ye out among you seven men of honest report, full of the Holy Ghost and wisdom, whom we may appoint over this business.

    4 But we will give ourselves continually to prayer, and to the ministry of the word.”

    No mention as to whether PriceWaterhouseCooper put in a bid to supply audit services to the Church in Jerusalem ;-)

    • Thomas A. Szyszkiewicz

      Nor was Korn/Ferry International consulted on the HR implications of taking on seven men whose only qualifications were that they were of “honest report, full of the Holy Ghost and wisdom.” Imagine the resumes:
      Objective: Feed widows and orphans.
      Qualifications: I’m of honest report, I received the Holy Spirit at my baptism and I’ve got lots of wisdom.
      References: Faithful of the Church in Jerusalem.

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  • Dom

    The Economist article also recycled old, inaccurate reporting on the finances in the Archdiocese of Boston, specifically related to the clergy health and retirement funds. The original reporting was based misunderstanding of a private presentation to priests that was leaked to the media and those inaccurate impressions persisted. I all “reporting” ever since. Fr. Mark O’Connell, who was one of the priests in charge of the funds at the time, discussed it in a radio program from the Archdiocese on Friday, August 24. You can listen to his explanation at the beginning of the show which you can hear at http://www.thegoodcatholiclife.com.

    Disclaimer: I work for the Archdiocese of Boston and on The Good Catholic Life program, but I’m writing here in a personal capacity, not in any official capacity.


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