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Francis J. ButlerDecember 23, 2000

Charitable appeals reach their full force across the nation about now, as the asking season roars in like a winter gale. Yuletide and year-end tax considerations collide to make a climate perfect not only for marketing U.S. charities but also for the cottage industry of donor guidance that seems to go with it.

Like watching a falling barometer, we can tell the giving season is here when Money Magazine runs its annual efficiency ratings of larger charities. At the same time, giving ideas arrive in mailboxes in the form of mail-order catalogues. Investment fund managers tout the benefits of philanthropy in year-end newsletters. The New York Times features its special annual insert, called Giving, covering the latest trends in fundraising and giving. A veritable whiteout of charity assessment swirls about the donor.

Few of these resources, however, shed light on charities that target a Catholic audiencenot that in the past this mattered a great deal. Appeals for missions in Alaska, shrines in Illinois, work in Indian schools and a wide panorama of human needs worldwide have been described in verbose direct mailings for years. Through list swapping, such mailings found their way to millions of the same homes, where a Catholic name worked to provide a level of immediate recognition and credibility.

But as more donors begin to wonder who’s minding the store, attitudes could be shifting. Here is what they have been reading about the world of church-related charity over the past few months alone:

  • The pastor of a parish in Queens, N.Y., diverts an estimated $2 million of donated monies over a period of yearsthis within a diocese that only four years ago saw $1 million of its funds diverted to the personal account of one of its lay employees.
  • The Santa Rosa, Calif., diocese reveals a $30 million dollar financial crisis on the heels of a scandal involving, among other things, the mismanagement, neglect and poor judgment of its former bishop.
  • A director of Catholic Charities for the Archdiocese of San Francisco is dismissed after billing his agency for his cosmetic surgery and $500-per-week restaurant tabs over a period of two years.

One can be grateful that Catholic dioceses and parishes seem no more vulnerable to the misappropriation or mismanagement of funds than any other charitable organization. In fact, the church may be less so. It is, after all, an institution that handles an estimated $9 billion dollars in donations annuallymostly cash giftsbut has had relatively few instances of misappropriation of funds.

Overall, the era when Catholic donations were given with little accountability in return is quickly disappearing. Parish financial councils are mandatory under canon law, the majority of dioceses publish annual financial reports, and as parishes, schools and care agencies under church supervision undertake more sophisticated development programs, a spirit of stewardship, professionalism and transparency is growing concurrently.

Bruised by litigation over clergy sexual abuse, and embarrassed by the financial crises that are sometimes associated with these cases, in recent years the Catholic bishops of the United States have been more aggressive in promoting stricter accountability within diocesan operations. Financial guidelines designed to regulate fund-raising and establish better internal financial controls for donations and investments have been issued by the U.S. Conference of Catholic Bishops on several occasions dating back to the 1970’s and as recently as this November.

Few would deny that the school of hard knocks has produced a more no-nonsense attitude toward the church’s handling of donated funds. This trend, and a growing acceptance that good stewardship is an ingredient in sound pastoral practice, combine to reassure donors that contributions to institutions under the control of official Catholic entities today will only with ever greater difficulty end up in the pockets of bad people.

Some ambiguity for the Catholic donor remains, however, in the case of charities that cultivate a Catholic image but operate as free-standing, independent agencies without canonical connections to the church. A recent case in point may be Food for the Poor, a $185 million charity that is one of the fastest growing fund-raising organizations in the United States. F.F.P. has provided desperately needed humanitarian assistance to the poor in a number of countries in the Caribbean and Latin America. Last October its founder admitted to diverting $275,000 in F.F.P. funds to two members of his staff and their families. The founder was subsequently removed by the charity’s board, and the diverted funds were replaced by the founder’s family.

Though significant donations for F.F.P. originate in Catholic parishes throughout the nation, no formal system of accountability to the official church in the United States is in place. Ironically, U.S. evangelicals, not the Catholic church, are playing a leading role in investigating Food for the Poor. Evangelicals, the victims of the mother of all charitable shenanigans, the Jim and Tammy Bakker fund-raising scandals of the 1980’s, have wisely assembled an effective watchdog agency to oversee evangelical churches and charities in the U.S. Known as the Evangelical Council for Financial Accountability, the agency sets forth reporting standards and policies and its members must subscribe to them in order to use the E.C.F.A. emblem of accreditation. Food for the Poor, although associated with more Catholic projects than evangelical ones, agreed to follow the E.C.F.A. standards in order to gain financial support among evangelical congregations. For this reason E.C.F.A. is now able to review Food for the Poor’s practices in an effort to restore evangelical donor confidence in the charity. Unfortunately, Catholic Church authorities lack a similar ability to conduct their own independent study on behalf of numerous Catholic donor parishes.

With an almost uncanny predictability, charitable scandals with a Catholic motif pop up every few years. Programs for homeless youth, mission appeals, shrines and religious investment schemes comprise a few of the more painful chapters in Catholic charitable history. Sleeping board members, charismatic founders resistant to oversight and internal systems that rely on faith alone have in the process allowed an all-too-human element to jeopardize good works and the church’s reputation.

While thievery or mismanagement of donated funds within charities associated with the church cannot altogether be eliminated, risks could be reduced by borrowing a page from the experience of evangelicals.

It might be time for church leadership and charities with Catholic interests to develop a uniform set of standards for fund-raising. Fortunately, one would not have to reinvent the wheel, as sound fund-raising guidelines already exist for dioceses and religious institutes. A simple set of agreed-upon norms and procedures could serve as the basis for an accreditation and reporting organization similar to the E.C.F.A. The proposed agency could fill a gap that becomes evident whenever charities that aim at a Catholic constituency but are not under direct control of the hierarchy run into trouble because of wrongdoing. Following a financial scandal, confused, angry or dismayed donors, lacking guidance to help them sort out what has happened, often abruptly stop their donations. It is the charity’s grantee that suffers.

In recent years, much has been written about the woeful underperformance of the Catholic donor. That researchers have found most Catholics giving at half the rate of their Protestant counterparts is nothing new. What is new is philanthropic research that links this behavior to poor stewardship, lack of donor participation and less-than-ideal levels of transparency. Charles E. Zech for example, a professor of economics at Villanova University, discovered through research on parish giving that where there is light in church operations, a sense of sharing and participation, dramatically improved charitable behavior prevails. Mr. Zech warns that attitudes among younger generations of Catholics in particular suggest that accountability will carry more weight than the Catholic label alone in fund-raising in the future.

Little relates more to the essence of the church’s mission than charity. The church’s vast outreach to the poor over the centuries is eloquent testimony to this truth. As a blizzard of opportunities to do good comes at this time of the year, it is a good moment for all who aspire to the Gospel demands of charity to ask how Catholic giving might advance more confidently through better charitable oversight within the church and among those who raise funds in its name.

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