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Gerard O’ConnellJanuary 28, 2022
The dome of St. Peter's Basilica is pictured through the colonnade at the Vatican Jan. 26, 2022. The Vatican has released a budget project that foresees a deficit of $37.1 million in 2022. (CNS photo/Paul Haring)

The Holy See’s budget for 2022, three years into the pandemic, envisages an overall reduction in both income and expenditure for the second consecutive year and a projected deficit of $37 million, which would be lower than in 2021.

Juan Antonio Guerrero, S.J., the Spanish Jesuit who is the prefect of the Secretariat for the Economy, said that “the most notable feature” of this year’s budget “is cost containment,” given that “revenues are still lower than in the pre-pandemic period.”

“A more complete picture”

In an interview with Vatican News, Father Guererro highlighted the significant new aspects of this year’s budget.

He drew attention to the fact that the Holy See’s budget for 2022 is much bigger than previous years. It shows an operating income of $823 million (compared with $265 million in 2021), an operating expenditure of $885 million (compared with $336 million in 2021), and a deficit of $37 million (compared with $55 million in 2021). (Note: The budget was presented in euros but is converted here to U.S. dollars.)

“The most notable feature” of this year’s budget “is cost containment,” given that “revenues are still lower than in the pre-pandemic period.”

He explained that this significant increase in both income and expenditure is due to the fact that the budget’s perimeter for 2022 has expanded with the addition of 30 new entities that are either properties of the Holy See or ones for which it is economically responsible. The 30 new entities include the Bambino Gesú pediatric hospital in Rome, the pension fund, the fund for health assistance, the four major Roman basilicas and the sanctuaries of Loreto, Pompei and Padua.

The budget for 2021 included 60 such entities (including, of course, the offices of the Roman Curia and the nunciatures worldwide), but the budget for 2022 includes 90 entities and is consequently much bigger than last year’s. Father Guerrero said the aim is to include in future budgets all the entities linked to the Holy See, and this will ensure a “more complete picture” as well as “greater transparency and greater control” of the Holy See’s finances.

Sources of income

The total income for the 2022 budget ($887 million) comes from four distinct sources.

First, self-generated revenue from services (such as the hospital), real estate management of Vatican properties, financial income from investment and commercial income. This counts for 65 percent of the income. In this context, he noted that only 20 percent of the Holy See’s real estate is available for economic return; the rest is used for purposes at the service of the mission of the church, including 60 churches in Rome, as well as universities, hospitals and other institutions.

A second source of income is from external donations, including donations from dioceses worldwide. This represents 24 percent of the income.

A third source of revenue is from the Governorate of the Vatican City State (including from Vatican museums) and the Institute for the Works of Religion (often called the Vatican Bank). This brings in 5 percent of the income.

Father Guerrero, commenting on the donations from the faithful worldwide, said: “We are very dependent on uncertain income, which we see decreasing every year in this time of pandemic.”

The fourth source of income, which counts for 6 percent of the total income, comes from titled funds and Peter’s Pence. The latter counts for about $27 million each year, and currently the three largest contributions come from the United States, Germany and Italy, in that order.

In the interview with Vatican News, Father Guerrero, commenting on the donations from the faithful worldwide, said: “We are very dependent on uncertain income, which we see decreasing every year in this time of pandemic. It has to be this way, since the way we receive most donations from the faithful is through the collection Peter’s Pence, and attendance [in church] in times of Covid has been reduced.”

He estimated (since the final accounts are yet to be done) that the reduction in donations from Peter’s Pence “has been around 15 percent in 2021; that is in addition to a 23 percent decrease between 2015 and 2019, and an 18 percent decrease in 2020.” He concluded, “This should make us think about other methods of soliciting the help of the faithful and receiving donations.”

How the money is spent

Sixty-three percent of the resources ($562 million) are allotted for services and administration, and a sizeable proportion of that ($436 million) goes to the Bambino Gesú Hospital.

Another 30 percent of the resources are spent on what is called “Apostolic Mission,” which includes 69 entities, eight of which absorb around two-thirds of the resources. The main expenditures for mission are as follows: 21 percent goes for “support of the local churches in difficulty and specific contexts of evangelization”; 16 percent is allocated for “communication of the message”; another 16 percent is assigned for “the apostolic nunciatures” (the Holy See’s diplomatic missions worldwide), and a further 16 percent for “cult and evangelization.”

Transparency and accountability

Father Guerrero explained that the budget for 2022 is seeking to achieve results similar to those of last year’s: “containment of expenditures, without reducing the pope’s charitable work but rather increasing it, with vaccinations for the homeless, increased aid to the churches in need, etc., and at the same time a further decrease in income.”

He said he believes that “the dicasteries”—the generic name for the main Vatican offices—“are aware of the economic situation and are reducing their expenses as much as they can.”

“According to our projections, we are not sustainable with more internal efficiency alone. We also need to look for ways to attract more donations.”

“Sometimes we ask them to reduce even more,” he said. “Obviously, there is a limit to the reduction—the mission has to be accomplished. In general, it is done with quite a few personal sacrifices from many people.”

Significantly, Father Guerrero added: “According to our projections, we are not sustainable with more internal efficiency alone. We also need to look for ways to attract more donations.” But, he said, “the first requirement for this is transparency and clear accountability, and I think we have taken many steps in this direction.” He mentioned the significant new legislation that has come into force regarding procurements and other financial operations in the Vatican.

“Our aim is to be sustainable,” he said, “not to have a surplus.”

Father Guerrero has been prefect of the Secretariat for the Economy since Jan. 1, 2020, and in these two years he has introduced significant changes to the management of Vatican finances and ensured greater transparency and accountability at all levels of the Holy See. It is still a work in progress, as he is the first to admit, but already the fruits are visible in this year’s budget.

“Our aim is to be sustainable,” Father Guerrero said, “not to have a surplus.”

Speaking of the past, he told Vatican News: “We are well aware that we have made major mistakes in financial management, which have undermined the credibility of the Holy See. We seek to learn from them, and we believe we have remedied them so that they will not happen again.”

But, he said, “In recent years, encouraged by the Holy Father, we have taken important steps in the right direction in economic management: greater professionalization, more teamwork, more transparency and less secrecy, establishment of oversight procedures, greater recognition of our weaknesses and attempting to remedy them…. Important changes have been made with the publication of certain laws. But slowly, the culture is changing. We are working in the right direction.”

He pointed out that the duty of the Secretariat for the Economy includes “to report transparently” so that those who contribute “are then able see how the money with which they help is spent.”

He revealed that the Vatican has finally sold the London property at Sloane Avenue, which has been at the center of an international scandal that led to the current trial in the Vatican. He said the Holy See will regain much of the money, though not all of it, that it had invested in that property.

Fathern Guerrero concluded by announcing that the consolidated balance sheet for 2021 will be presented in the middle of this year.

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