Your Tax Dollars At Work

Granted, the Economist can only take an educated guess into how the Roman Catholic Church spends its money. So we need to take the numbers with that caution in mind. Still, the notion of this particular religious institution spending $172 billion dollars annually in the United States alone is (to me, at least) a pretty remarkable thing but one that does not strike me as unreasonable. This makes the RCC a Wal-mart sized player in the American economy — even if we disregard entirely its cultural influence on our society.

What’s more, the estimate is that nearly 85% of that spending is on education and medical care. And as I argue below the fold, because the Church derives that money in large part from tax dollars or and tax breaks, a big hunk of where that money comes from and how it gets spent is a matter of public concern. This puts some context into other sorts of issues, like the contraception coverage debate that’s recently been so headline-worthy, and the impact of health care reform on the nation’s largest charitable dispenser of health care to the economically disadvantaged.

Of renewed recent interest has been the settlement of child sex abuse lawsuits, with the Economist confirming that each such meritorious claim costs roughly a million dollars. But with that kind of spending, the roughly three and a half billion dollars paid out isn’t going to have a big impact on the institution as a whole — the reason that several dioceses have declared bankruptcy (and thus rendered public enough information to make estimates like this possible) is liquidity rather than capitalization.

So despite the headline-grabbing lawsuits and bankruptcies, there is a lot of capital, and a lot of cash flow. Where does the money come from?

Donations cannot be even close to sufficient to fund this. I know lots of people declare on their taxes that they put a twenty dollar bill in the offering plate every week when they go to church. I’ve been to a couple Catholic Masses in the last few years for social obligations, and I haven’t seen a single Jackson in the basket when it gets passed to me. Fives and singles are much more common. Maybe I’m not getting invited to wealthy enough parishes, but I rather doubt that’s the issue.

Taking the Economist’s numbers as roughly accurate, 74,000,000 Americans call themselves Catholic. How many of them go to Mass? Well, there’s a large RCC parish across the street from my house and it amuses me to note how full the church gets. On days like Christmas and Easter, the parking lot is full to the point of overflowing for every Mass, but on regular Sundays, it’s something like two-thirds to three-quarters full (the Spanish Mass at noon is the best-attended). So my eyeball estimate is that about half of the people who will go to church on big holy days also go to church most of the time. If we assume further (and this is a SWAG) that half of them typically attend Church as families of four, then let’s say that of 74,000,000 Catholics, that’s about 5,000,000 families and another 10,000,000 individuals attend regularly, and another 15,000,000 donors only attending irregularly for the four major holidays (mainly Easter and Christmas, but Ash Wednesday seems pretty popular too).

So if more realistically all these people are giving $5 per Mass, instead of the $20-per-week fib the government winks at, that’s about $4.5 billion a year in offering plates. According to the Economist, that wouldn’t even pay for half of the operating budget for local parishes. The Economist article arrives at a bit more than double my estimate above, but they don’t show their math like I did and they assume the average weekly donation is $10 rather than $5.

And parishes and clerics are typically paid honoraria for performing services like baptisms, weddings, and funerals. Seems fair to me — they are offering a service and they should be compensated for doing it. There’s fundraising money as well — I’m told that quite a lot of money gets raised by Bingo at our local parishes, which is all spent on local operating expenses.

Of course that’s old news. the real money comes from big donors and real estate. The Church, through a variety of holding companies classified as charitable, owns quite a lot of land in quite a lot of places and a great deal of it is managed for what amounts to profit. Taking my own community as an example, I know that the Archdiocese of Los Angeles owns, through a network of 501(c)(3) entities, at least three mobile home parks and at least one large apartment complex, all of which are in, shall we say, less desirable parts of town. I’ve had to come across these in my professional work, sometimes adversarial and sometimes collaboratively, but at the end of the day, I’ve had to wait for decisions to resolve matters to be approved by the Archdiocese of Los Angeles several times.

Now, it’s not news that owning and renting out real property is a primary means for securing an income stream, and one can make just as much profit with low-rent property as high-rent property if expenses are kept low. The Church has an advantage in that a primary expense for a for-profit business, taxes, are not charged to it because, well, it’s a religious institution and it gets an exemption.

Nor is it news that wealthy people who like a particular thing give money to it so there can be more of it. And the RCC is no exception to this. You can probably name some of the RCC’s biggest donors and there simply must be a network of thousands of wealthy people who are networked in to donate big bucks. Presumably they get religious advantages, prestige, professional and political networking opportunities, in exchange for doing so. Indeed, if all they get from their donations is personal satisfaction, that’s reason enough for them to give in my book — it’s their money to do with as they please.

Just as an example, not for nothing are there beautiful crypts below the new (actually, by now it’s about ten years old) Cathedral of Our Lady of the Angels in downtown Los Angeles, engraved with the names of the mostly still-living wealthy Catholics in the Los Angeles area. There’s no reason to doubt similar sorts of arrangements are made in every diocese, with wealthy donors paying handsomely for the honor of knowing they will be given a posthumous place of honor in the grandest hall of worship around.

Does this mean they get dispensations, forgiveness of sins, or other sorts of ecclesiastical benefits? As I recall, forgiveness of sins, membership in the Catholic community, moral guidance, spiritual succor, and the like are dispensed for free to all who want them. You don’t have to pay to attend Mass or go to Confession or anything else. Or maybe it’s just social prestige that motivates the big giving? At the end of the day it doesn’t matter — these wealthy folks like whatever it is that the Church has on offer for its “premium service” packages, so they buy it.

And if you ask me, all of this — every penny — is on the up-and-up, in compliance with the law and almost all of it in accordance with completely unobjectionable, voluntary, free transactions. About the only part of that which I have any real reservations about is the property tax exemptions.

Now, with 85% of the money being spent on medical care and education, well, where does that money come from? How much of that healthcare spending ultimately is paid for with Medicare, Medicaid, VA, or state-level dollars? To be fair, how much of it is written off either as charity or not collectable; how much is spent on government-mandated emergency medical care for the indigent? How much of it comes from private insurance payments or out of pocket dollars by patients? We can’t know this, because the figures are all private, but it’s very likely going to work out to be about the same as that of a non-religious hospital, and we know that those are often profitable. It seems safe to conclude that the bulk of the money moving through the hospitals and other healthcare-dispensing arms of the Church is derived, in some fashion or other, from tax dollars.

A similar dynamic is at work with education spending. Grants for education and research, subsidies for educational activities, and most of all, Federally-backed student loans, is money that moves one way or the other through governmental hands and then through ecclesiastical hands.

Glossed over a bit in the article are the charitable activities — $4.7 billion a year in charitable giving sounds like a pretty massive amount of charity coming from the Church’s coffers. But 60% of it is redistributed from governmental sources. So that works out to a bit less than $9.6 million per archdiocese in gifts from the church’s own coffers, or slightly less than the operating budget for the local parishes — more than double that amount is derived from tax dollars and then redistributed by the Church.

With all this governmental money moving, at atomized levels, from public coffers to the RCC’s various spending centers, it’s clear enough to me that the public in general — a majority of whom are not Catholic — are paying for a lot of what the Church does.

It’s also not at all clear to me that this is a particularly awful state of affairs. Dispensing health care is good. Dispensing education is good. Housing the homeless and feeding the hungry are good things. As a society, we want and like these things, and we want and should have more of them. Through the evolution of its history in our nation, the RCC has created a significant network of institutions that render these valuable and important services to our society. Collectively, we are better off for having them than we would be without them in a measurable way. So please, don’t think this atheist commentator is trying to knock on the Church.

But doing all these good things makes the Church look good. It buffs up the Church’s reputation in society because it does all this good stuff. The Church deserves credit for the money it raises and puts in to its efforts to make the world a better place, especially for the disadvantaged and unprivileged. But it’s a more ambiguous case than that, because if the Church had never existed or had not created such a formidable array of charitable institutions, our society would likely have found some other way of applying our collective money towards these good ends. The government, after all, has directed that all this money go to medical care, education, and social welfare. The RCC provides one of many vehicles by which that money can be spent on those things. But it gets basically all of the social credit for doing them.

So U.S. tax dollars are making a great deal of what the Church does possible. It doesn’t happen with big single block grants. It happens twenty-five thousand dollars at a time, with every student loan taken out by a student at Notre Dame, with every surgery done on Medicare billing, with every property tax assessment on every RCC-charity-owned trailer park foregone, with every tax deduction given for the “donation” accompanying the sale of a prestige crypt in a downtown cathedral, with every block grant to buff up a charity’s activities, improve its social profile, imbue the institution with deeper levels of cultural goodwill, and thus embed the church further into the fabric of our society. We’re all paying for that.

While we can’t be certain of the numbers (remember, the Economist is taking its best guess about spending, and I’m taking my best guess after that on where the money comes from in the first place) I’d ballpark that a hundred billion dollars a year of money is moving from one or another kind of governmental fund into one or another Catholic institution in the U.S. I’ll admit of a margin of error here, but we can be confident that when we step back and look at the big picture, it’s going to be a very big number. If I’m right, that’s nine figures a year of public fuel going in the Roman Catholic Church’s gas tank every year.

Picking another number out of the Economist, U.S.-raised revenues for the RCC account for about 60% of the Church’s global receipts. I readily concede that the Church holds massive real estate holdings, artwork, and other unique and intensely valuable assets as its legacy from history. I’m focusing on money in versus money out, and when we do that, we find that the government of the United States is, in atomized form, paying for roughly one-third of everything the RCC does, everywhere in the world.

With an implication of maximum respect to the Church for its good works both here and abroad, this is still worth reflection: with that much public money at issue, we all have a stake in what gets done with it.