August 31, 2012

Editorial

Archdiocese is a leader in Church finances transparency

Of all the organizations that serve America’s poor, few do more good work than the Catholic Church. Its schools and hospitals provide a lifeline for millions.”

Thus begins a comprehensive four-page “Briefing” on “The Catholic Church in America” in the Aug. 18 issue of The Economist. However, the next sentence is, “Yet even taking these virtues into account, the finances of the Catholic Church in America are an unholy mess.”

The magazine studied the Church’s finances and concluded, “The picture that emerges is not flattering. The Church’s finances look poorly coordinated considering (or perhaps because of) their complexity.”

Exactly. They are not coordinated.

“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).”

That’s because that estimated figure includes 630 Catholic hospitals, 244 colleges and universities, Catholic Charities, and 196 archdioceses and dioceses. There is no chief executive officer over all that, as The Economist would seem to want.

The magazine says that, for purposes of comparison, in 2010 General Electric’s revenue was $150 billion, as if the Catholic Church in America is one big corporation. It isn’t.

Where does all that spending go? The Economist says, “We think 57 percent goes on health-care networks followed by 28 percent on colleges, with parish and diocesan day-to-day operations accounting for just 6 percent and national charitable activities just 2.7 percent.”

We agree that the finances of many Catholic institutions could be managed better. We believe that seminaries could do a better job of preparing future priests to handle parish finances since that is a substantial part of what they will be doing.

The lay organization known as Foundations and Donors Interested in Catholic Activities (FADICA) has long encouraged better financial education for priests, and the National Leadership Roundtable of Church Management is helping dioceses improve the way that finances are managed. Leon Panetta, U.S. secretary of defense, was a director of the Roundtable until 2009.

American Catholics have reason to be proud of the fact that, as The Economist reports, “The Church is the largest single charitable organization in the country. Catholic Charities USA, its main charity and its subsidiaries employ over 65,000 paid staff and serve over 10 million people. These organizations distributed $4.7 billion to the poor in 2010, of which 62 percent came from local, state and federal government agencies.”

Naturally, the article pointed out that the clergy sex-abuse scandal “has resulted in more than $3.3 billion of settlements over the past 15 years, $1.3 billion of that in California.”

Since those molestation reports became known, the article said, “Donations from the faithful are thought to have declined by as much as 20 percent.”

Eight dioceses have declared bankruptcy as a result of those settlements, and more could do so. The article reports on what it calls “questionable financial management” in some of those dioceses. This has included the raiding of priests’ pension funds to cover settlements and other losses, according to the article.

The Economist briefing ended by reporting that influential Catholics are calling for more openness and accountability, which, it said, “might have the added benefit of bringing in the acumen of a knowledgeable and concerned laity.”

In that regard, the Archdiocese of Indianapolis has long been way ahead of other dioceses, apparently mainly in the northeastern part of the United States.

The finances of the archdiocese are monitored closely by a Finance Council composed currently of Bishop Christopher J. Coyne, apostolic administrator, and nine lay men and women knowledgeable about financial matters. The board of trustees of the Catholic Community Foundation is also composed almost entirely of financially savvy lay men and women.

The archdiocesan financial statements, which are audited by Deloitte & Touche, are posted on the archdiocesan website. So are the annual reports of the Catholic Community Foundation. The archdiocesan accountability report, which includes the financial statements, is published annually in The Criterion along with detailed messages from Bishop Coyne and the archdiocese’s chief financial officer. It was published most recently in our Jan. 20 issue. That report is also available on the archdiocesan website.

It’s hard to imagine how the archdiocese could be more transparent when it comes to financial matters.

—John F. Fink

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