March 2, 2018; Catholic Herald (UK)
The Pennsylvania-based Papal Foundation has an unusual mission and an unusual governance structure, which can lead to misunderstandings, miscommunication, and distrust, especially when everyone involved assumes how the organization and its leaders will act in a given situation. How the foundation handled a request from Pope Francis to support a hospital in Rome, and the backlash against the decision, illustrates the problem.
From the foundation’s 2015 annual report:
A two-tiered Board of Trustees manages The Papal Foundation funds. American Cardinals who reside in the United States serve as ex-officio members of the Board. Archbishops, Bishops and elected laity from across the country serve as Trustees.
Eight cardinals are listed as “members” in the annual report, along with 16 “trustees.” Lest anyone think that all trustees are equal, or that the American cardinals serving the foundation as ex officio trustees have less power than the 16 selected and elected trustees, a recent letter states:
The Papal Foundation has bylaws that put the ultimate control of the organization in the hands of the US-domiciled cardinals. No one has ever represented that this organization is controlled by the laity.
The Papal Foundation’s annual report lists about $210 million in net assets. It is recognized by the IRS as a 501c3 public charity, but it does not file an IRS Form 990 because it claims exemption from the annual requirement as a religious institution. The board chair’s 2015 annual letter celebrated a foundation record “presentation of $15 million to the Holy Father” for his charitable work.” The letter cites three traditional areas of foundation support: care for the vulnerable, building “centers for worship, service, and evangelization,” and “preparing new generations of spiritual leaders.”
However, one of Pope Francis’s selected grant recipients didn’t fit the traditional categories. In fact, the head of the board’s audit committee resigned in protest when it was found that the Papal Foundation, at the request of Pope Francis, had granted $25 million to a scandal-ridden hospital in Rome attempting to rebuild its leadership and programs. While the grants are well within the Papal Foundation’s broad mission to “serve the Holy Father and the Roman Catholic Church,” trustee James Longon and other “Stewards of St. Peter” who provide a major portion of the foundation’s endowment objected to this particular use of their contributions. In a letter to stewards, Longon said:
This is a badly run business venture, not a helping of our Church or a helping of the poor. Cardinal Wuerl stated that the Holy Father is simply turning to the Papal Foundation for assistance to get through that bridge time while the hospital gets back on its feet. Sounds like a business loan to me.
Cardinal Wuerl, the Archbishop of Washington, D.C., and the foundation’s clerical leadership defended the grant. “We did not send money to a hospital,” the board’s letter to stewards reads, “we sent money to the Holy See.”
The 85 individuals and couples listed as stewards each pledge a gift of at least $1 million, payable over a ten-year period. In reaction to the concerns expressed by the stewards who provide much of the foundation’s financial support, the cardinals have “walked back their promise of assistance” to the hospital and Cardinal Wuerl has requested that the Vatican not accept $12 million in funds previously approved by the foundation for the hospital’s support. The cardinals have also proposed giving lay members of the foundation more of a voice in how grants of $1 million or more are awarded.
The Wall Street Journal quotes one anonymous donor who has suspended his annual contribution: “I would feel a lot more confident with my money there, and recommending to other people to be stewards, if I knew it was being managed by business people and not theologians and priests. There’s a risk of killing the goose that laid the golden egg.”
Despite a specific mission to support the pope and the Catholic church, and despite by-laws that explicitly place ultimate decision-making authority in the hands of the American cardinals who constitute a minority of its board, the Papal Foundation is finding there are other constituencies that must be satisfied in order for the nonprofit’s mission to be pursued sustainably and successfully.—Michael Wyland