Nineteen Sixty-four is a research blog for the Center for Applied Research in the Apostolate (CARA) at Georgetown University edited by Mark M. Gray. CARA is a non-profit research center that conducts social scientific studies about the Catholic Church. Founded in 1964, CARA has three major dimensions to its mission: to increase the Catholic Church's self understanding; to serve the applied research needs of Church decision-makers; and to advance scholarly research on religion, particularly Catholicism. Follow CARA on Twitter at: caracatholic.

8.17.2012

Spot the difference...


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.

I just read the story in this week’s Economist and it has shaken my opinion of the publication a bit. I’m not concerned about any anti-Catholic “bias” or the rehashing of the financial fallout of the sex abuse crisis or diocesan bankruptcies. Instead I am concerned about the lack of understanding of what the Church is as an institution in the piece. Here’s a taste:

[T]he finances of the Catholic church in America are an unholy mess. … The church’s finances look poorly co-ordinated.

[T]here are now over 6,800 Catholic schools (5% of the national total); 630 hospitals (11%) plus a similar number of smaller health facilities; and 244 colleges and universities. … All these institutions are subject to the oversight of a bishop or a religious order. The Economist estimates that annual spending by the church and entities owned by the church was around $170 billion in 2010 (the church does not release such figures). … For purposes of secular comparison, in 2010 General Electric’s revenue was $150 billion and Walmart employed roughly 2m people.”

Where that money comes from is hard to say (the church does not release numbers on this either). Some of it is from the offerings of the faithful. Anecdotal evidence suggests that America’s Catholics give about $10 per week on average. Assuming that one-third attend church regularly, that would put the annual offertory income at around $13 billion.

I am guessing The Economist does not have a copy of the Code of Canon Law. Even a glancing read of the Code would have revealed that the Church is quite clearly not run like a multinational corporation such as Walmart or General Electric and I for one am glad it’s not. The sole objective of the modern corporation is to extract and grow profits and in doing so it creates economic growth, wealth, and products and services we desire. But it sadly has no capacity for social justice. Even if a corporate CEO did devote corporate resources for a “good cause” shareholders could sue for neglect of fiduciary responsibility. As many Americans have learned in the last four years of recession and recovery, the modern corporation is no paragon of transparency and ethics (…as a great documentary, The Corporation, demonstrates these institutions really are “people” under the law. The kind of people that would likely be diagnosed as psychopaths using The Diagnostic and Statistical Manual of Mental Disorders).

Why don’t the people and institutions that make up the Church in the United States 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? Because it would be an extraordinary waste of the Church’s resources and time. The Church is not in the business of generating profits like a corporation. It provides ministry, charity, and service to the communities it exists in. It also has no legal obligation to provide what The Economist desires.

As an institution, the Church is nearly 2,000 years old and its structure was fashioned well before modern communication. This reality required significant local autonomy. Priests were responsible for parishes, bishops for dioceses. This same feudal-like structure persists. Add on to this the development of colleges, schools, hospitals, and charities that were often associated with religious orders. Separate aspects of the Church operate for the most part independently—with their own leadership, budgets, revenues, and obligations (perhaps some of the frustration from The Economist comes from the realization that financials do exist for each of these institutions and organizations but it would take forever to collect and tally them all).

I hate to break this to The Economist but there is no “U.S. Catholic Church.” However, one of the best descriptions of all that is the Church in the United States can be found in The Official Catholic Directory. If you are listed in it you are an official part of the Church and you are tax exempt. CARA and Georgetown University are in the OCD under the Archdiocese of Washington. However, we don’t share our financials with Cardinal Wuerl (...we have annual audits and answer to a Board of Directors). He in no way dictates day to day operations nor does he have any direct administrative role. Yet he is, importantly, the pastoral leader of all Catholic entities in the Archdiocese.

What The Economist doesn’t appear to get is that the institutions of the Church are incredibly decentralized—operating as individual entities under the pastoral umbrella of the Church. 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.” Yet this is what The Economist wants the Church to be (maybe they’ve watched The Da Vinci Code a few too many times?). Throughout The Economist’s story there is an underlying tone or belief by the reporter that the Church has this information but is withholding it—“the Church does not release such figures.”  The reporter fails to understand that the Church does not have these figures (e.g., aggregated annual spending by all entities of the Church, all donations to Church entities) because it has no apparatus to collect them.

The little data collection that does go on in the Church broadly (e.g., the Vatican's Annuarium Statisticum Ecclesiae or Annuario Pontificio) is related to what the Church does—it’s about ministry (i.e., numbers of baptisms, marriages, ordinations). I understand the natural skepticism and cynicism of The Economist but I can also attest that if you want to get rich, working for the Church would be a lousy idea. The $10 per week, on average, given by parishioner families is just enough to keep the lights on in most U.S. parishes. The most common reason for a Catholic school to close is their inability to generate enough revenue to keep the school operating. Nearly half of all individuals providing ministry or service in a U.S. parish are volunteers. Among those who are paid, the median annual wages or salaries amount to $31,000. The pastor is typically among the lowest paid members of the staff (…although he does receive free housing). By canon law, each parish (and diocese) is required to have a finance council that oversees the dollars and cents of its operations—most often composed of parishioners with financial experience. How many Walmarts have a community council including customers helping to make decisions for the local store? 

I was sure The Economist doesn’t have a copy of the Code of Canon Law when I read the that the Church has “17,958 parishes run by 39,466 priests and 16,921 married deacons.” Not all priests and deacons are in parish ministry. Not all deacons are married. No deacons technically “run” a Catholic parish. Ultimately, all parishes are administered or supervised by priests. Most people helping a parish operate are neither priests nor deacons. In a small number of parishes, under Canon 517.2, the pastoral care of the parish may be entrusted to a deacon—more often to a lay person—but these parishes remain under the supervision of a non-resident priest. The vast majority of deacons (married or not) are not serving in this capacity. In fact, the ministry of deacons, who are not paid, is oriented toward service, not administration.

Parishes may be the heart of the Church, but as The Economist also found, much of the economic activity of the Church occurs in hospitals (they estimate 57% of all spending is health related. The other largest component of spending is said to be within colleges and universities at 28%). Here again, as with universities, these are institutions that are for the most part operating independently under the pastoral umbrella of the Church. There is no bishop sitting in these hospitals going over patient bills or setting the costs for procedures. This is not what bishops do. 

If the aim of this article was to encourage the Church to be more like Walmart I personally remain unconvinced. I don’t know any person or institution that is not without its sins and The Economist’s story correctly notes many of the Church’s recent failings. But I would also counter that there are many corporations who really, really need to find a way to adopt some of the charitable focus of most non-profits (religious or secular) more than the Church needs to adopt corporate accounting practices on a unified global scale. I know the Church does a lot more good in the world than Walmart or General Electric (the latter being a for-profit that is magically “tax exempt”). Would it be able to do this better with more financial oversight? I agree it would. But I’m not sure the effort that it would take to create an annual summary of the Church’s finances for every parish, school, hospital, and charity around the world would be the best use of its time (...costs would exceed benefits). I also think that such a device would not prevent, reduce, or deter any illegal or abusive activity, just as it fails to do so in the corporate world.

Update (8/19): Ive examined the math a bit more in The Economist piece and discovered a significant problem. The story overestimates annual Catholic Church offertory by $4.6 billion or 50% because they assume Mass-attending individuals give an average of $10 per week (for data see pg. 43) rather than households. Also, The Economists claim that Catholic parish giving has declined in the last decade is incorrect. As shown in the figure below, the average amount given per week, per parish household increased from 2000 to 2010 (peaking in 2005; declines are likely more related to the effects of the recession than anything else). Because the Catholic population has grown and the average amount given per household has increased the total offertory in 2010 is actually 23% larger than it was in 2000 (even after adjusting for inflation).


I've also had some emails from people responding to this blog. One individual who works in the Church said, “Trust me the church is run by lay incompetents and they desperately need to adopt modern management practices.” As I note in the post, I believe some changes would be good. I’m just not sure the Church needs to refashion itself into a multinational corporation. Another individual who expressed a lot of anger with the Church regarding the sexual abuse of minors by clergy said, “You fail to make any connection between the Church’s lack of transparency and cover-ups and failings, and its multifaceted structure and operation that you emphasize so much.” I would agree with the John Jay criminal justice researchers who cited organizational factors (see pg. 4) as causes of the abuse crisis. The Church has taken some steps to alter its structure in the last decade and these reforms are evaluated annually on a national level and these data are released to the public for review. Still much remains to be done to heal the wounds caused by abuse, if this is even possible. The post does not focus on the issue of abuse because the errors of the The Economist story are in failing to report accurately on how the Church operates financially.

Update (8/27): I had posted material on the blog that goes into the background of the reporter I spoke with (The Economist does not give bylines) and highlighted some of the content in the article that I believe is strongly related to the point of view of the corporate consulting world that the author comes from. There is a trail of this editorial material—often in the form of bizarre “advice”—in his articles about the Church that one does not often see in news or investigative journalism. I removed this from the blog because I think the post above makes the more important points about his errors and I don’t think the author or his work is in need of more attention (...even if it is negative).  

Above photos courtesy of rosebennet and seanbirm at Flickr Creative Commons.

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