Why the Church Needs Business

Not long after I left a job at GE Capital to enter the Jesuits, I was living in a Jesuit community where one night we were discussing our community finances.  The person in charge of the bank account--a bright and highly educated priest--said that we had $25,000 in our checking account, but that we really only needed $1,000 to cover weekly expenses like groceries, electricity and the like. 

So, he said, we were in good shape. 


I had to make sure I hadn’t misheard him, and I asked if he had those figures right.  Yes, he said, and wasn’t it great we had so much money on hand?  

“Wouldn’t it be better,” I suggested gently, “to put the extra $24,000 in an account where it could earn more interest than it could in a checking account?” 

“Great idea!” he said.  Several Jesuits congratulated me on what was seen as my financial wizardry.  “It’s a good thing you went to Wharton!” someone said.  But this was hardly high finance and I hardly needed all those Accounting courses at Wharton to know this; rather, it was something that most wage-earners knew instinctively.

It’s not surprising that many cardinals, archbishops, priests, sisters and brothers don't know much about business.  Of course many do: think of all the clerics and sisters who run (and have often founded) universities, high schools, hospitals, and huge multinational institutions, and whose fundraising skills and financial acumen would put many on Wall Street and in corporate boardrooms to shame.

But many more are at sea when it comes to accounting, finance and general business practices. 

That’s why today’s news that the Vatican has hired McKinsey & Co., one of the world’s premiere consulting firms, to review their communications strategies and KPMG, the accounting giant, to review the accounting practices in the Holy See was such welcome news.

Beyond the mess that has been the Vatican bank, the Catholic Church can learn a lot from business.  This may seem counterintuitive, but the same church that has (rightly) spoken out so forcefully on the excesses and the limitations of capitalism desperately needs some capitalistic skills

How is it that so many seem to have so little expertise in what so many people take for granted?  Not long after the financial crisis in 2008, one priest confidently told me, “Capitalism is dead.”   I asked him if he could still go to the corner and buy a hotdog.  Yes, he said.  “That’s capitalism,” I said.  “It’s not dead.”  A few days later another priest with a Ph.D. asked me, as he read about the financial crisis, “What’s a bond?”

Whence the lack of business knowledge among otherwise smart and talented (and highly educated) men and women?  There are two simple reasons:

First, many cardinals, archbishops, bishops, priests, sisters and brothers now in their 60s and 70s (that is, those running things in the church) often entered their seminaries or religious orders right out of college, even high school.  Thus, many (not all, but many) did not have the important experience of having to earn a paycheck, balance a checkbook, manage employees, read a balance sheet, invest in the stock market, and so on. 

The second reason is more basic. Once in the seminary or religious order, business education was not a part of their training.  This is an immense lacuna in the training of priests and men and women in religious orders.

A few years ago a representative came from the Jesuit headquarters in Rome to ask Jesuits for their ideas and input about our training.  Currently, Jesuits undergo a long training program—upwards of 12 years—before we are ordained. (We have Jesuit brothers too, who are not ordained, and whose training is also rigorous).  Part of that training is full-time work--often as a teacher in the high school or college classroom--but just as much is study.  That study includes two years of philosophy and three of theology.  Diocesan priests have a similar breakdown between philosophy and theology. 

What would I change about our training? asked the man from Rome.

Easy: Drop a year of philosophy and add a year of business.  When you think of the likelihood that a Jesuit will one day be running a parish or school, Adam Smith is more important than Immanuel Kant.  Pity the priest who finds himself presented with a sheaf of financial statements, without knowing what a debit or credit is.  Pity the sister who finds herself running a school without ever having hired (or, more importantly, fired) a single person.  Pity the bishop who is running an archdiocese and has to rely on his chief financial officer. 

There is a reason that so much fraud and embezzlement happens in church groups—pastors often rely on a longtime business manager, almost blindly, and they themselves may not have the education to know when they are being duped.  “We’re doing just fine, Father.  Don’t worry!” Anyone running a business who does not know what a bank rec is shouldn’t running a business.  This is not simply good management but good stewardship.

Fortunately, the Catholic Church is beginning to understand the need for formal training and formal advice in business, after years of turning up their nose at something that was seen as infra dig.  (“Oh,” said one priest to me, “I have someone else do the ‘money stuff’.”)  Many in religious orders and in seminaries are now able to study basic business and management techniques.  Young Jesuits can for example take summer courses in basic accounting.  Moreover, organizations like the National Leadership Roundtable on Church Management has for the last few years offered the expertise of business leaders to the US hierarchy.

A few years ago the head of a church organization, a priest, came to me in a dither.  His high-paid employees weren’t working, but hanging around at the office coffee machine.  “You have some business background, right?  What should I do?”  I asked what he would do if he were a manager at a McDonald’s and his cooks were taking too many breaks.  “I’d tell them to get back to work!”

I asked if the church should at least be as professional, and well managed, as a McDonald’s.  He laughed.  “I guess I should tell them to get back to work, huh?” 

Welcome McKinsey & Co.  Welcome KPMG.  Holy Mother Church needs you. 

Comments are automatically closed two weeks after an article's initial publication. See our comments policy for more.
Lisa Berlinger
4 years 4 months ago
Fr. Martin, Please read The Firm: The Story of McKinsey and Its Secret Influence on American Business by Duff McDonald before praising the hiring of McKinsey. I have great respect for former McKinsey CEO Fred Gluck (a Catholic) but not for some of the things done by others in the organization. The McDonald book cites scholarly historical research (e.g., Chris McKenna, Ph.D. of Oxford) demonstrating the negative effects of McKinsey's consulting and the processes that it has sold to business, governments, and nonprofits, often to their detriment.
Lisa Berlinger
4 years 4 months ago
The difficulty that all complicated organizations face is aligning financial moves with mission. Yes, mission. Even for-profits need to consider how they define their business relative to the market beyond short terms goals in changing societies and markets. I am disturbed by your McDonald's analogy. McDonald's (and all fast-food) uses a fairly simple technology that requires minimal training. Those running churches (if you want to consider them to be "franchises" like McDonald's) need much more education training and even life-long training. In addition, This has not been done in the Catholic Church (or really, any church). Clergy who attend training are most likely to chose topics they are already good in (sermons/homilies vs. how to understand & talk to the congregation about finance). As to McDonald's, they underpays their workers (no living wage here) and many franchisees cheat employees out of overtime and benefits by their scheduling. I've worked with two orgs, one Catholic, one Protestant where staff were being underpaid & made an argument to the priests and ministers in both that they were subverting their mission. Both raised salaries. I know you would too.
John Walton
4 years 3 months ago
I used to think running a McDonalds and their technology was comparatively simple to the solid state physics I did as an undergrad -- until I spoke with several of their suppliers. I used to think that making gypsum wall board was low tech until I saw the stuff whirring past at hundreds of board feet per minute. Perhaps the solution is a Christo Rey program for Jesuit Scholastics -- in which they get to actually work in a manufacturing business, a trading floor, or advertising firm for a year.
4 years 4 months ago
And here's another idea: instead of sending the ordained priest or vowed Religious to business school, why not give financial oversight--and authority--to the members of the Church who have expertise and experience in these matters already? The gifts that make for a wonderful Pastor, Bishop or Spiritual Director don't necessarily mesh well with those that can help provide sound financial policies. I once remarked to my beloved former Pastor, "Father, I'm willing to let you hold on to the Keys to the Kingdom, but I'd like you to share the keys to the safe." It's a bit of a dance, really; but for too long, the clergy have always done the leading.
Dan Hannula
4 years 3 months ago
Yes, indeed. Give financial oversight AND AUTHORITY to those who have the expertise. I served for many years on a so-called school board for a Catholic school (K-8). I say "so-called" because our priest (many times) reminded us that we were advisory only. We had several local business men and women, a lawyer, and a CPA on our board while I was there. Father would smile and nod at our discussions when we went over the financial reports. Early on during my service I thought father just needed more time to ponder our advice. Not much changed without great amounts of persuasion. But, when Bishop got a bee in his bonnet about school uniforms, action was implemented with light speed and without consultation with the school board. Now I think most of these church advisory groups should simply be re-named as potted plants. It's more descriptive.
John Walton
4 years 3 months ago
Archbishop Hughes ridded himself of lay oversight 150+ years ago. Bad Mistake.
Joseph J Dunn
4 years 4 months ago
Amen, Fr. Martin.
Michael Barberi
4 years 4 months ago
Before I retired I was a senior partner at a worldwide consulting firm and a senior vice president of a Fortune 200 organization. I understand the many positive contributions that consultants and consulting firms provided to for-profit and not-for-profit organizations. I also know many justified criticisms of the the consulting profession….and there are many. Nevertheless, I want to applaud Fr. Martin for this excellent article and his overarching suggestions. Any large complicated bureaucratic organization, especially the RCC, can benefit from the expertise of business consultants. Some priests, nuns and religious do have a business background and many do an excellent job in handling their business responsibilities. However, as Fr. Martin pointed out the problem is much larger than that. More importantly, criticizing whether the McDonald's example that Fr. Martin used was the best one, misses the point. I hope that McKinsey and KPMG provide the Vatican high quality professional advice that their organizations are capable of delivering. Holy Mother Church not only needs it, it is a refection of Pope Francis' vision and leadership!
Austin Cabral
4 years 4 months ago
All the best advice in the world will not benefit mother church if suitably trained staff are not available to implement the advice given by the consultants. I applaud Fr Martin's idea of deleting a couple of courses in theology, philosophy and canon law and substituting economics, finance and business. The real workhorse that feeds the billions is the economy.
Michael Barberi
4 years 4 months ago
That's always the case Austin. Organizations hire consultants to help them achieve their objectives. Often their advice is accepted by management but implementation is another matter. This means not only having competent staff to implement the recommendations, but assigning there right leadership to see it through. Nevertheless, the fact that the Vatican hired business consultants is a great first step.
Austin Cabral
4 years 4 months ago
I welcome your blog Fr. Martin. It is wonderful to see a churchman honest enough to recognize that there are some fields of learning that could be improved in his church. Recognizing one's weaknesses is a first and essential step in moving forward.
KC Mulville
4 years 4 months ago

Two things to consider.

  • First, Jesuits these days come into the order having already completed college, and are supposed to have some familiarity with Jesuits already. In real life, this problem is resolved by the fact that most Jesuit candidates are recruited from Jesuit colleges. So perhaps a more important question is ... how did this guy get through a Jesuit college if he has no clue about basic business knowledge?
  • Second: as an ex-Jesuit who had a philosophy degree before I entered, I was appalled by the lack of commitment to the two years of philosophy. While I was at Fusz in the late 1980s, so many of my fellow scholastics gave as minimal attention as possible to the actual studies, and spent most of the two years focused on outside apostolates.

If we’re working on the theory that Jesuits should be trained in the skills they’re going to need, one year of philosophy isn’t enough. A Jesuit should be trained how to think; without that intellectual advantage, the order loses some of its identity and heritage.

Frank Lesko
4 years 3 months ago
Good article and comments. While it is true that to a hammer all problems look like nails, there is still a place for hammers in our world. Like the article points out, some of the clergy have been shielded from having to manage the day-to-day act of survival that the laity struggle with. This is just another way that the culture of the clergy may be attracting the wrong crowd. Some folks may be drawn to the religious life because they can't cope with being self-sufficient and want to be coddled and mothered. This not an indictment on all clergy, but a problematic feature of the system, for sure.
4 years 3 months ago
Great article! I've had a little saying for years. "The Church is not a business but it needs to do business." The Church has to live in the world using the world's best practices. Conversely "business is not a church but needs to do church."I mean by that that the virtues of mercy, compassion, solidarity and communion have a place in the business world.
Bill Mazzella
4 years 3 months ago
I have always felt that there should be a job description for the parish priest especially. Too many priest feel that saying masses and hearing confessions are all they have to do. That is only one and one half days out of the week.What is the schedule the rest of the week. Secondly, if you have $25, 000 and you only need $1000, doesn't Francis' call for the poor cry out to you. How many hungry mouths and homeless people could use that. Or are only those who gave the $25,000 the ones who are storing up treasure in heaven?


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