When Churches Fail the Public Trust

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To whom, and for what, are institutions responsible? This question sparks a lively debate whenever the discussion involves the responsibilities of corporations, nonprofits or government agencies. But there is too little discussion of how a religious institution ought to behave toward the community and the civic life of which it is a part. Some might argue that the question is irrelevant. Current events strongly suggest otherwise.

The Church and the Public Trust

The role and responsibility of a church in the community and the civic body have been highlighted by recent developments in the American Catholic Church. For nearly three years, beginning in January 2002, the Catholic Church has struggled with the scandal of clergy sexual abuse. Church leaders, ordained and lay, have worked to address the needs of victims (who define themselves as “survivors” of abuse), to create new systems to ensure that children, in particular, are protected in the future, and to reform a culture that permitted abuse to go undetected and unreported for too many years. Public confidence in church leaders has declined sharply, even in communities that have not suffered the high-profile cases of abuse. The Church’s own research, published in 2004, confirmed that credible allegations of sexual abuse were filed against 4,399 priests over several decades. Across the country, more than 10,000 victims of abuse were identified in church records. These data are likely underreported according to the researchers, painting a picture of widespread abuse that is dark and forbidding.

The same study showed that the money expended on settlement of abuse cases exceeded $570 million over a fifty-year period, not including more recent awards such as the $85 million settlement in Boston and multi-million dollar settlements in Bridgeport, CT, Springfield, MA, St. Louis, MO, Louisville, KY and other dioceses. Estimates by researchers suggest that the total cost to the Catholic Church now exceeds $1 billion, with a potential doubling of costs as hundreds of additional cases are resolved in the courts or through negotiation. California alone has more than 1,000 abuse cases in the courts; they may, alone, require more than $1.5 billion.

Such figures underscore an obvious point: the sexual abuse scandal has been enormously costly to the Catholic Church. Large dioceses, such as Boston and Los Angeles, with hundreds of local parishes and millions of members in their geographic territory, now face hundreds of cases and legal settlements that threaten beleaguered church finances. Small dioceses face steep financial costs as well. To stay the trial of two massive lawsuits arising from clergy sexual abuse, the Archdiocese of Portland, OR filed for bankruptcy protection in June 2004, the first diocese in the United States ever to do so. Under the authority of Chapter 11 of the federal bankruptcy law, a judge is currently overseeing the management of the operations. The bishop of Tucson, AZ has publicly stated his intention to file for bankruptcy for similar reasons, and other dioceses such as Santa Rosa, CA are prominently mentioned as standing at the financial brink.

This reality clearly tests our historical understanding of the constitutional separation of church and state. Should federal bankruptcy judges oversee the management of church entities? Should the public know the full scope of church assets and liabilities? Would such actions affect the basic immunity from state influence and control that churches have historically enjoyed in the United States?

The Church and the Civic Body

These are difficult questions from both a political and religious perspective. In my opinion, the civic body has an important stake in developing sound answers to these questions. Indeed, the public discussion of the role and responsibility of the church in society that is being fueled by these questions is a healthy, and long overdue, public conversation.
In Massachusetts and several other states, state officials are taking steps to bring church operations under their regulatory scrutiny. In August, 2004 the Attorney General of Massachusetts exercised his authority to oversee the disposition of monies from the massive property sales that follow from the closing of more than 80 of 357 parishes in the Archdiocese of Boston. Archbishop Sean O’Malley has promised that funds from the property sales will be used to strengthen other parishes, not settle legal cases. Public skepticism, however, runs high.

A bill now being considered in Massachusetts would remove the exemption of religious institutions for filing annual reports under the state’s Charitable Solicitation Act.

This would require churches to disclose property holdings and sources of income. The underlying argument is that churches have a “social compact” with the public that permits tax exemption in exchange for public benefits. Unfortunately, churches too often have a dark history when it comes to financial practices, with little disclosure and no public accountability. The inability to self-regulate has seriously damaged the public interest. Today, there is a consensus that the sexual abuse of children is an evil that must be stopped and prevented. A financial disclosure law does not directly achieve that end, but it promises to shed light on financial practices that facilitate anti-social behavior.

The Church and the Community

Communities have a large stake in the way these issues are addressed. Our image of the Church in the community is one of the Good Samaritan, who stops to help a person in need when others pass him by. We legitimately expect churches to be the living examples of good neighbors. But as church leaders slash budgets, social services such as housing, health care, and education are reduced. Pressures increase on other nonprofit and public agencies whose resources are often inadequate to compensate for the programs that are being cut back. In Massachusetts, for example, the Catholic Church is the second largest provider of social services, trailing only the state itself. There is simply too little capacity in the social system to absorb these unmet needs.

Another vital area of community impact involves the sale of real estate as parishes are closed and dioceses downsize. The liquidation of assets to satisfy legal claims can be wrenching for any nonprofit organization. Donors, past and present, employees, clients and beneficiaries of services and programs can be affected. The organization’s capacity to raise funds in the future is placed at risk. The social compact between churches and communities is threatened when disruptive activities such as closings and bankruptcies occur. Moral understandings are threatened when nonprofits solicit gifts under one pretext, then liquidate the property and use it for another, unrelated purpose.

Again, Boston is an instructive example of a phenomenon that is happening in other communities. Much of the property owned by religious institutions derives from the gifts of past members. From candlesticks to acreage, donations of money and property have been given for the “benefit of (St. X) parish.” What happens when those local parishes cease to exist, or are deliberately closed in order to “free” the assets for another use? What responsibility, if any, does the local religious leader bear to honor the grantor’s intention? And, what of the people in the community who now rely on that local church’s programs and activities? All of these stakeholders have a legitimate right to ask of the church and its leaders, “Are you not responsible to me?” “Do you have a duty to care for me?”

It is ironic that churches, with their moral mission, seem to have slipped through the net of moral accountability that every community needs to keep in good repair. In recent times, we have seen governance breakdowns and failures in business (Enron), nonprofits (environmental groups), and government agencies (military in Iraq). So, too, it is with churches that fail the public trust. Unaccountable church power cries out for the countervailing influence of public checks and balances (e.g., public reporting).

Lessons for Nonprofits

Churches are unique nonprofits, but the challenges discussed in this article apply to leaders of all types of nonprofits.

Recognize that your “license to operate” is a living agreement with the community; the terms are continuously being redefined. The social compact between communities and nonprofits is an evolving relationship, with civic expectations changing as the nonprofit’s performance itself changes over time. The fundamental challenge for nonprofit leaders is to constantly assess where the “issue gaps” between performance and expectations are widening, and take timely action to close them. Issues that are ignored, or badly managed, undermine the credibility of managers and, ultimately the legitimacy of the nonprofit institution.

Lead the effort toward greater transparency in your organization. The 21st century is surely an era of sunlight and disclosure. To get ahead of disclosure problems, find new ways to communicate with stakeholders about how decisions are made. Discuss the consequences and implications of various choices, and work to improve your organization’s reporting of financial transactions.

Learn from the experience of others. The Catholic Church is, by no means, the only religious institution—or nonprofit—in which sexual abuse has taken place. Leaders of other denominations have begun assessing the adequacy of reporting and preventive measures within their churches. And, we know that sexual abuse of children is a widespread social problem that has been classified by the Center for Disease Control as a major public health problem in the United States. Research sponsored by the U.S. Conference of Catholic Bishops (USCCB) is available and can be helpful to community leaders seeking to reduce the incidence of sexual abuse in their communities.1

Endnote

1. For information regarding the research and preventive measures discussed, contact: Office of Child and Youth Protection United States Conference of Catholic Bishops, 3211 4th Street, N.E., Washington, DC 20017-1194.

About the Author

James E. Post is president of Voice of the Faithful, an organization of more than 35,000 Catholic women and men, formed in the wake of the clergy sexual abuse crisis. The VOTF mission is to provide a voice through which the laity can participate in the governance and guidance of the Catholic Church. This mission is advanced by three goals: to support survivors of clergy sexual abuse, to support priests of integrity, and to shape structural change within the Catholic Church. For more information, contact: Voice of the Faithful, P.O. Box 423, Newton, MA 02464; (617) 558-5252.