Tuesday, August 21, 2012

The Catholic Corporation

There's been some discussion around about this Economist article on the financial state of the Catholic Church in the United States. As lots of people have noted, it's somewhat confused, given that it treats the Catholic-Church-in-the-U.S. as a single economic institution, which it most certainly is not, and grumbles about its lack of central financial accounting. One might as well do a report on Latino Culture or Atlantic Fishing and grumble about how, instead of sensibly releasing a clear unified report on its finances, its "finances look poorly co-ordinated considering (or perhaps because of) their complexity." The Catholic Church, if taken to include parishes, dioceses, religious orders, schools, hospitals, charitable organizations, and the like, is quite obviously more like a cultural affiliation than a well-defined economic entity; the corporate character of the Church is radically different from the corporate character of an incorporated business. Anything can become part of the Catholic Church in this way; practically all you need is the permission of the local bishop to call it Catholic. I'm pretty sure The Economist doesn't usually work under the assumption that everything of the same sort should be completely centralized in a single governing body; but I look forward to some future article in The Economist expressing bafflement at the fact that Evangelicalism or Islam in the United States doesn't have a Chief Financial Officer. It has also been noted that it gets some things wrong, beyond confusing a system of distinct but affiliated institutions with a single economically corporate institution -- for instance it overestimates parish donations by misreading donations per household as donations per individual. The CARA research blog has some discussion of the problems with the approach in the article.

It's actually interesting, though, that it shows that the network of institutions that constitute the Catholic Church in the United States is not, despite its visibility and the sheer number of things it does, a high-money-flow network. The article estimates that what we usually think of as 'the Church' -- local parishes and dioceses -- account for about 6% of the money in the entire system. Most of the identifiable money flow is in hospitals (estimated at about 57%) and in colleges and universities (estimated at about 28%), which, while undeniably part of the Church in some straightforward sense, are for all economic, administrative, and legal purposes separate institutions affiliated by little more than name and general principles, and in them the money is doing exactly what it does in other hospitals and colleges.

There was actually the potential for a good article here, namely, looking in detail at financial accountability problems in parishes and dioceses, and how they relate to structural problems, both in terms of Church governance and canon law and in terms of the necessarily very heavy reliance of these institutions on volunteers with limited or no training responding to immediate problems or issues as they arise. That would actually be quite interesting. For instance, it's widely recognized that there need to be reforms in how the finances of many parishes are handled, but very little information on what the real underlying problems are. Likewise, there's a good argument that greater financial accountability would improve the effectiveness of churches, but, if so, it's at present difficult to do anything about it because it's not wholly clear what's working and what's not.

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