Scandals Will Dent, Not Bankrupt, Dioceses ; Roman Catholic Church Faces Big Financial Toll from Lawsuits and Lost Donations. but Its Resources Are Vast

Article excerpt

Dozens of priests are sacked over child-abuse accusations. New lawsuits worth millions are filed as previously unknown victims phone lawyers. Irate parishioners from Boston to Palm Beach chop donations to avoid paying for huge settlements.

"Now that the silence has been broken, dioceses across the country face mountains of debt, even bankruptcy," one news magazine reported recently.

The financial toll is real enough - and will vary sharply from one diocese to another - but the image of looming financial collapse ignores the vast wealth of the Roman Catholic church in America, which extends from real estate holdings to parochial schools.

Even with the prospect of fresh child-abuse lawsuits that could double the billion-dollar tally of settlements already reached, the bankruptcy of even a single diocese is unlikely, church financial analysts say.

Several overlooked factors will limit long-term financial damage to the church to manageable levels, these analysts say.

First, while on one level the ancient church appears monolithic in its priest-to-pope hierarchy, its highly decentralized legal structure in the US is as resilient in its own way as the Internet, which was designed to survive nuclear war. The 188 dioceses in the United States are distinct entities that cannot readily be sued as a group and will effectively compartmentalize the financial fallout from any new lawsuits, observers say.

"It's like McDonald's," says Anson Shupe, a sociologist at Indiana-Purdue University in Fort Wayne who studies finances and abuse within churches. "There is no one Catholic church in the United States. They are all separate corporate entities - a bunch of franchises."

Second, the Catholic church in America is easily the richest in the world with untold billions in assets. This point is often missed in news reports, because so little is known about its resources. Few realize that a month or two of contributions would pay the expected legal bills.

$253 million a week

According to one of the few existing financial analyses of overall church finances, the Catholic church in America receives more than $13 billion in contributions and other income annually - in excess of $253 million a week. Such income means the church can absorb even a major financial blow without lasting damage, several observers say.

"The concept of bankruptcy doesn't apply here," says Dean Hoge, director of the Life Cycle Institute at the Catholic University of America in Washington.

Dr. Hoge should know. He and a handful of church colleagues have analyzed the church's finances over the past decade, particularly its income from contributions. What's clear is that the church's income and assets - plus wealthy contributors who might be called upon in a pinch - can cover almost any conceivable emerging liability.

A 1997 article in the Catholic weekly "America" entitled "The church is not broke," rebutted popular perceptions that giving had slowed. Author Joseph Claude Harris, a church financial analyst from Seattle, put revenue for 19,000 parishes and 8,300 schools nationwide at $13. …