The following excerpts come from an August 18 story in the Economist on the finances of the Catholic Church in the US.
….In a particularly striking example, the diocese of San Diego listed the value of a whole city block in downtown San Diego at $40,000, the price at which it had been acquired in the 1940s, rather than trying to estimate the current market value, as required. Worse, it altered the forms in which assets had to be listed. The judge in the case, Louise Adler, was so vexed by this and other shenanigans on the part of the diocese that she ordered a special investigation into church finances which was led by Todd Neilson, a former FBI agent and renowned forensic accountant. The diocese ended up settling its sexual-abuse cases for almost $200m. If it had not done so, the bankruptcy would have been thrown out of court and the bishop and chancellor of the diocese and its lawyers might have faced contempt charges…
Growing financial pressures have encouraged the church to replace donations from the faithful with 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. Overall church muni debt has increased by an estimated 80% over that period. At least 736 bond issues are currently outstanding.
California is the biggest borrower. Although funding for religious groups is prohibited under the state’s constitution, a series of court rulings has opened the door to bond issues. Catholic groups there have raised at least $12 billion through muni bonds over the past decade. Of that, some $9 billion went to hospitals. In one case, in San Jose, the money went to buy chancery offices for the bishop.
To read the entire story, click here.
Yes I too was stunned into silence at the financial and spiritual mismanagement of our Church’s finances as highlighted by the full Economist report.
Why can’t our Church call itself to account for its financial sins, as it seems so expedient when it comes to health care or state regulation of loving relationships?
Reading articles like this make me all the most thankful that the world famous Christ Cathedral in Orange County was purchased for the bargain price of $57.5M
Besides the bishops’ malfeasance and besides the enormous interest due on their debts to Caesar, the worst of it is that the fullness of the Faith will continue to be compromised for fear of losing favor with the politicos who hold the purse strings.
The Government Catholic Church and the Roman Catholic Church: How to tell them apart would make for a good book or essay or dissertation.
It would have been nice to see the breakdown of the $12 billion in bond debt created in California. Given that the annual parochial collections in this state could very well be less than $1 billion dollars, $12 billion seems extraordinary!
I will guess that the new LA, Oakland, and Orange Cathedrals, as large as they are, are only a modest portion of the bonded debt. Combined I’m guessing they should add up to about a half-billion dollars. What is the other $11-1/2 billion for? Even a new chancery for San Jose (?!) would be peanuts, on the scale of a few millions. I’m guessing the Catholic hospitals and universities have taken the lion’s share.
The other unknown portion: what percentage of the bonded debt is for clergy sexual abuse payouts?
Great article. I see that CARA, the sociological flaks at Georgetown, quibble with the parochial collections figures. Nonetheless, this one article by a secular European newsmagazine has shown a light onto the overall Rube Goldberg arrangement of the US Church like nothing we’ve seen in the US press, either secular or religious.
LA’s Cathedral was paid for 100% by donations. 100%
Christ Cathedral in Orange is being paid for by the donations and by the sales of the old chancery campus.
Those donations, Rodda, are available because of the govt money funding all the other stuff. Without the govt money being used by the bishops, they’d be hard pressed to spend donations on the big storefront projects like the crystal cathedral now soon to be Christ Cathedral.
JLS, can you give us some examples of the “govt money funding”, please.
Absolutely not.
100% private — mostly from very wealthy individuals living in Los Angeles.
Rodda, unless the LA Cathedral of the Angels had a funding model different than all other Catholic building projects I’ve encountered, one needs to nuance the 100% figure.
For most dioceses, the 100% figure means that 100% of the costs of a project are pledged by donors. Rare– actually, I’ve never seen it– is where this meant 100% of the cash was on hand, since building campaigns extend over several years. The money covering the different cash flows between paying fees, architects, and contractors– very front-loaded– and the gradual fulfillment of pledges by parishioners has to be financed. Dioceses run their own in-house “banks” (deposit and loan funds), whose shenanigans could be interesting fodder for a news article by themselves. The scale of some building projects is such that the D&L fund is too small to cover the cash flow, so bonds are floated and operating budgets are often reduced. I know that in the aftermath of the “100% funded” LA Cathedral the chancery staff was significantly and unexpectedly reduced. Most babes in the woods, misled by the archdiocesan public relations flacks, denied a cause-and-effect between the cathedral and the chancery cutbacks, but no LA priest of my acquaintance was fooled by the spin.
All this being said, Cardinal Mahoney did raise a prodigious amount of money to build Our Lady of the Angels. I’m sure the Diocese of Oakland, saddled with their completed cathedral and heavy debt, wishes he had served in Oaktown instead of the Southland.
It says “Of that, some $9 billion went to hospitals. ” the article says
LWCR Nuns and their Democratic party friends.
I would imagine most of the rest went to Jesuit “Catholic” Schools
The big question is why do those who are supposed to be leading the Church need these big fancy chanceries. Oh, I know, to make more room for more harmful church bureaucrats such as at the USCCB
God bless, yours in Their Hearts,
Kenneth M. Fisher
Kenneth, they do not need fancy offices. On the other hand, I don’t think most people know how many people it takes to run a diocese they way they are run today. When companies get to big for their mission, they restructure, do business differently and right-staff the organization. Yes, offices don’t have to be fancy. Some, however, have to be big.
I do believe that many of the “upper” clergy are still believing like the medieval European bishops having much control over the secular governments unheard of in our times. Many were even more powerful than the secular rulers except the few that managed to even consolidate those powers. This produced more evil than good as it has today. Pray for our clergy where there are some heroic examples that hopefully can reform our church.
This is a horrible, entangled predicament. Real, obedient Catholics are down. Mass attendance is down. Hostility from a counter-culture is UP! Meanwhile it is borrowing fo the future! This is very, very dangerous. Pessimism is justified. Unless the Church becomes zealous, bold, courageous, wise, and orthodox, I only see an economic implosion on the horizon for it.
The situation is much more complex than this article makes it seem like.
See prior to Sexual Abuse, the Church did not need to account for these properties at their market value, since there was never the intent to borrow aganist these properties nor any intention to sell them at some point.
Its difficult to see how one can justify wild claims like ‘bishops financial mismanagement’
$9 billion went to hospitals
Who runs these hospitals? LWCR nuns.. they are not even Catholic, Like Catholic Healthcare west, west non cannonical and dropped its Catholic Identity
I would very much like to see the amount that DIOCESES (not private Catholic organizations) spend on pro-life activities. I’m guessing the amount would be microscopic if the truth were known.
Also, given the amount of priests in formation, dioceses spend a ridiculous amount on seminary education–which is often quite poor anyway–when the cost-per-student is considered. Yet, dioceses see these seminaries as status symbols and don’t want to close them, so they close parishes and elementary schools instead.
DAVE N., your comments about seminaries are ridiculous.
most seminaries have indeed been closed, due to lack of students, so the remianing seminaries take care of large regions, rather than just one diocese as in the past.
this downsizing saves a lot of money — and how would you know anything about the “quality” of the education our future priests get?
if not at seminary, where in the world do you think they should receive their formation — at home? from mommy?
max, you shouted down the actual important matter brought forth by Dave N. This would be the excessive amount spent on priestly formation, in exchange for what? Abortion keeps on keeping on, institutionalization of sodomy advances. Holiness is not even discussed, even though the Pope told the bishops to make it happen.
JLS…wow…the pope told the bishops holidness is important?
this is truly front page news.
you are starting to sound like a broken record…
max, if you listen to Jesus, you’d opine that He too sounds like a broken record … you know, what with all the “repent, and sin no more” hype that you liberals are not concerned with.
“Most” seminaries have been closed? I’m not sure where you are getting your information, but it’s incorrect. There are around 200 Catholic seminaries in the U.S. and about 5,000 priests in formation. (You can look this up on Wikipedia if you’re really interested.) That means on average 25 students per seminary. In any other denomination, two-thirds of these seminaries (at least) would be shut down for economic reasons.
Actually, I know a fair amount about the education that catholic priests receive, having attended and taught in a catholic seminary.
ah, yes, WIKIPEDIA, the infallible source of information.
where anybody can type in what they fancy, factual or not.
i’m currently telling them most of our seminaries are in iceland, so let’s see how many pople fall for that line…
BTW thanks to those who pointed out the $9B of bond money that went to CA Catholic hospitals.
If the President wins reelection and the HHS mandate survives, who do you think the hospitals will listen to? The Catholic bishops with their miniscule financial means or the government? It will take a real act of faith for the religous orders– I’m guessing many of them will fold like a house of cards.
MICHAEL, thanks for your awesome faith in the religious orders that run so many catholic hospitals.
with such a vote of confidence, i can just imagine a whole GOB of young people lining up to become nuns, brothers and priests after reading your inspired post…
Max, it doesn’t require me to cause disinterest by orthodox Catholic young people in the old-time religious orders. After the disgraceful conduct by the Catholic Hospital Association in the debate over the ACA, the Catholic disassociation of CHW, and the rampant theological weirdness of many religious, both male and female, one priest adding commentary at a news blog means very little to a person discerning a vocation to the religious life.
My responsibility is promoting vocations– ordained, religious, and lay– in my parish, which I do as a pastor of souls.
BTW “I’m guessing many of them will fold like a house of cards,” implies that I believe a few orders will NOT fold like a house of cards and will be forced to sell their hospitals. God bless them! They know that the bishops and parishes don’t have the economic resources to keep them independent of government coercion and yet they will remain faithful anyways. A true act of faith!
Excellent, FrMichael, in explaining to max about “implication”, as max is implication challenged like liberals in general. They have replaced their human genomes for understanding including implication recognition with rampant paranoia. Every buzzword or literate word sends them into paroxysisms of paranoia. And, yes, I apologize in advance for using your post as a springboard to slam max.
Oops, should be spelled “paroxisms” and my apology in advance is a liberal apology which means it serves only to placate while I dream up my next foray.
max is humble and lovable.
dear old JLS, whenever i see your perky little posts, I picture you as YOSEMITE SAM from the cartoons, with your six guns and adorable gruffness.
what would we do without you?
thanks for teaching me so many big words in your post, too. i look forward with delight to your next foray!
For lthose of you trully interested in what is taught in the seminaries and something about the culture of the seminaries, there is a book entitled “Goodbye, Good Men” by Michael S. Rose that is worth reading. It is published by Regnery press. One conclusion one might draw from reading the book is that most seminaries ought to be close, or at least have a new faculty and formation directors.
A second thought is that the notion of every diocese having its own seminary is rather out of touch with the financial strength of the Catholic community. How about five seminaries to serve the country. That gives them the number of students needed to attract good professors, money to build a good campus, and a more uniform priesthood.
Take a look at the curriculum for seminaries. With few exceptions it doesn’t teach seminarians how to be priests. There is nothing built in to teach them how to deal with people, how manage small groups, how to communicate, how to use modern technology to attract people to God, how to manage a budget, or how to manage stewardship. But they can take couses in metaphysics, which they are likely to use every day of their ministry:)
If we want better priest, we should start with better and more practical training.
Bob One, how ’bout the seminarians take courses in how to become holy?
Bob One:
You wouldn’t get much argument from me regarding revamping the seminaries’ curriculum, although it wouldn’t be along the lines of taking away courses but rather adding them. Philosophy (such as metaphysics) is critical, as orthodox Catholic moral theology is predicated on sound philosophical thinking, as is much of dogmatic theology. But the lack of practical courses for day-to-day functioning in the parish is an obvious lack– obvious to everybody but the seminary faculty, alas. I’ve had a discussion with one of the seminary rectors, who looked at me blankly when I suggested adding a course on small business skills– state and federal employment laws, how to create and read a budget, and basic HR skills. Truth be told, seminary priest-faculties generally make the parish priests, as mediocre as we tend to be with business matters, look like Steve Jobs. Virtually all of them have limited parish experiences, especially of pastoring.
“A second thought is that the notion of every diocese having its own seminary is rather out of touch with the financial strength of the Catholic community.”
This has already happened on the West Coast. There are only three major seminaries for parish priests west of the Rockies: Mt. Angel (Portland), St. Patrick (San Francisco), and St. John (LA). Even though owned by local archdioceses or as a Benedictine establishment, in fact these have become regional seminaries.
COMMUTATIVE JUSTICE: –
QUOTE – – – – CCC: ” 2411 Contracts are subject to commutative justice which regulates exchanges between persons and between institutions in accordance with a strict respect for their rights.
Commutative justice obliges strictly; it requires safeguarding property rights, paying debts, and fulfilling obligations freely contracted.
Without commutative justice, no other form of justice is possible.
One distinguishes commutative justice from legal justice which concerns what the citizen owes in fairness to the community,
and from distributive justice which regulates what the community owes its citizens in proportion to their contributions and needs. ” – – – – UNQUOTE.
Each Bishop must pay the Diocese Debts – fairly and honestly.
If necessary he must sell property to insure solvency.
Each member of the Diocese has a right to see the annual audit.
No wonder some Bishops do not promote the reading of the “Catechism of the Catholic Church, Second Edition”.
This is also why some Bishops ignore National Debt and State Debt when discussing “Social Justice”.