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Vatican Finances

This was originally an email, but I thought it might be useful to turn into a blog post as well.

Anyway, I was asked the question:

So are you okay with the fact that the Vatican is so wealthy?

To which I responded:

HEH. This is an awfully loaded question, isn’t it? Like the question “when did you stop beating your wife?”, it presumes that I agree with the underlying assertion.

The underlying assertion in this question is yet another lovely myth that many Protestants love to throw around when they’re feeling jealous or need a new reason to call Catholics evil (“those Catholics are supposedly charitable, but look how astoundingly wealthy they are; they’re just sitting on it when they could be giving more money to the poor”—as an insult, it’s right up there with “the Pope is the anti-christ, and therefore all unrepentant Catholics are condemned to eternal damnation” (before you laugh, yes this is the viewpoint of several variants of protestants, especially several Baptist variants who follow the Epistle of John very literally)). Before I get into the details, lets think about this logically: the Vatican is the command-center for a vast organization supported exclusively by donations for at least the last several centuries. They do massive charitable works and have astoundingly large expenses for upkeep and restoration of their very old historical headquarters. How wealthy do you suppose they really are?

The Vatican has a yearly operating budget of just $260 million. That’s less than half the budget of the University of Notre Dame (Harvard’s annual budget is $1.3 billion). Now, many folks have been calling for the Vatican to sell off (read: cannibalize) it’s collection of paintings and statues… pretty much ever since they got them. That’s never been seriously considered, for manys rather obvious reasons. Among them: most of the paintings and statues were created specifically for the Vatican as a gift to the glory of God; turning them into cash to pay the heating bill would be astoundingly insulting to the artists, not to mention wildly undervaluing them. There’s also the value as a museum to consider; once such paintings are in private collections of the fabulously wealthy no one else will ever see them again. In fact, most of the paintings and statues are entered in the yearly ledger as a debt because of cleaning and upkeep costs. Finally: selling off the contents of St. Peter’s Basilica would be like the U.S. selling off the contents of Washington D.C.: quite simply not regarded as a serious proposition.

Pope John Paul II got so fed up with people (primarily protestants) accusing the Catholic Church of sitting on vast sums of money that he started publishing their finances every year, starting back in 1981. This was a bit of a shock to many folks; back in 1965 TIME magazine had reported that bankers estimated the Vatican’s wealth at between $10 and $15 billion. Oh how wrong those bankers were. Last July the Vatican released an estimate of the worth of all of their real estate: a paltry $908 million. From 1970 to 1993 the Vatican was hemmoraging huge amounts of money, because some unwise Cardinals were spending more on charitable works than they were taking in in donations (in 1993 the only thing that changed was Canon Law was revised to indicate that diocese around the world were supposed to give donations to the Vatican). Not that they’re still not losing money; their 2003 budget saw revenues of 203.6 million euros and expenditures of 213.2 million.

Here’s an article about the Vatican’s financial woes that goes into greater detail. Here’s another one (though you may consider it “biased” because it’s from the Catholic News Service).

I know Bill O’Reilly termed these details “creative accounting” because the Vatican tends to consider selling its artwork totally out of the question, and as such values it all at a symbolic 1 euro apiece. But like most of the garbage that comes out of O’Reilly’s mouth, I think that’s a totally bogus (and inflammatory) way of characterizing the situation.

So, do I mind that the Vatican has a smaller operating budget than the University of Notre Dame? Not at all. Do I mind that they take care of a large collection of art by some of the greatest artists of all time that were specifically created to praise God? Absolutely not, I think that’s precisely what they should do. Do I mind that they do not consider themselves owners of that art, but instead consider themselves merely caretakers of that art, and as such consider selling it in order to feed the poor totally out of the question (and, unlike many museums, do not charge a fee for people to come look at that artwork)? No to that one as well.

Oh, and just in case you are somewhat confused, you should be aware that every diocese is almost entirely financially independent from the Vatican. I say almost, because of that Canon Law change in 1993 that directed diocese to help the Vatican meet its expenses. Every diocese can own and invest it’s own money however it likes. I believe the estimate is that if you tally up all the donations in the US that get made to Catholic Churches, you’d get something like $24 billion annually. But that’s donations to hundreds of thousands of essentially financially-independent organizations. The Vatican sees very little of that money (a few million), in no small part because Catholic churches are very community-driven: what gets donated is almost always used immediately for either operating costs or charitable community projects.

Does that answer your question?


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Comments (2)

Chad :

Dear Kyle,
While I agree that you have merit to your argument, there are some significant factors that you have failed to reflect on. The investment holdings of these institutions creates a reserve of sorts and must be accounted for. In the united states alone there is over 500 million invested in Morgan stanely as well as some prominent oil companies. While I understand the economics, there are some inconsistencies here. The fact that they operate in Italy, a country synonomus for poor accounting measures (to put it lightly), raises some huge concerns as the Vatican has been linked to numerous money laundering plots. I have been looking into these details as well finding that there are many financial inconsistencies that the financial statements do not account for. The fragmentation of these catholic institutions not only offers security, it also offers a greater degree of difficulty to finding collective quantitative data.
Assessing the Vatican's "riches" (for lack of a better word) based solely on their financial statements is as bad an idea as charting the assets for any other organization. While I agree that social convention hyper-inflates the notion of Vatican money, as an institution compared to other NGO's it remains incredibly strong.
The assets of priceless art and architecture being priced at 1 euro, is apt. Unfortunately, not all of their pieces are indispensible. This would alter the degree their declaration of assets. The property as well is another question that remains highly contentious. These estimates are entirely subjective, and are only lowered by the fact that much of the property that they rent, is below average standards. This of course is because they are charitable, but as an asset especially in italy this severly lowers their property values. Additonally, other properties are lowered because they are considered to have no value. If this was a corporation it would not be argued that the value of the vatican would be exponentially higher. Thank God (no pun intended) that it is not.


For reference, here's a link to the Vatican's 2007 financial statement.

They had an income of 236,737,207 euro and 245,805,167 euro in expenses, which means they operated at a deficit of about 9 million euro.

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