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Unholy Mess: churches and finance

Unholy Mess: churches and finance

The Economistreports findings about the finances of the Roman Catholic Church:

Of all the organisations that serve America’s poor, few do more good work than the Catholic church: its schools and hospitals provide a lifeline for millions. Yet even taking these virtues into account, the 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 sexual-abuse scandals of the past 20 years have brought shame to the church around the world. In America they have also brought financial strains. By studying court documents in bankruptcy cases, examining public records, requesting documents from local, state and federal governments, as well as talking to priests and bishops confidentially, The Economist has sought to quantify the damage.

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.

Not wanting to “cast the first stone” and since churches do not have to report like other non-profits – could this be said of other denominations? Are dioceses of the Episcopal Church engaged in financial contortions?


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Ann Fontaine

Roberta – it is ironic that the treasurer in question wrote most of the handbook on Church Finances – just that the Church Center did not follow her recommendations. TEC did recoup all the money from that incident. And she spent 5 years in jail (2 more than the judge recommended because the PB and some on Executive Council pleaded for more)

Roberta Karstetter mentioned in the article..”not wanting to cast the first stone”…We would be wise to remember our own past (re: The National Episcopal Church) I can not help but remember (as a parish treasurer myself the last 27+ years) the scandalous fiasco that the National Episcopal Church had when the treasurer did just that..”engaged in financial contortions” and embezzeled over 2 million dollars, which brought about major revisions (rightfully so) in the ways that all parish treasurers, diocesan treasurers, and even the national church treasurer needs to be financially accountable and have good records and accounting practices in place. The Milwaukee Diocese requires parishes to have an audit yearly, which we have complied with as well at our own individual parish. Don’t other Dioceses require that?…if other Dioceses do not require that, WHY NOT?


If I may comment, please…

The charities and institutions complimented in the essay are different that “The Catholic Church”. The distinction needs to be made.

A college, or a hospital, or a social services agency are run near-exclusively by lay people, and most often operate under 501(C)3 rules and reg’s. The are run as non-profits, and adhere closely to all the accounting and auditing rules regarding same.

What the essay is calling “The Catholic Church” is the church entity itself, run exclusively by the hierarchy and clergy of the RCC. There is near-zero direction of the RCC by laypeople, and it does not adhere to many of the rules/regs of the lay-led charitable and educational institutions. Even those positions in the RCC that do not in any way require holy orders to do the job is still run by a priest or bishop.

From what I have seen, the more a denomination looks like one of the above-mentioned 501(C)3’s, the more transparency and accountability exists, and a commencerate competency/honesty.

Kevin McGrane

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