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Coming from a denomination that doesn't subscribe to one earthly central Church authority, or a rigid structure, I find it very interesting to learn about denominations that do have such a structure. While browsing through the "Gospel Topics" section on the LDS website, I ran across the article on Tithing, which says this:

Church members give their tithing donations to local leaders. These local leaders transmit tithing funds directly to the headquarters of the Church, where a council determines specific ways to use the sacred funds. This council is comprised of the First Presidency, the Quorum of the Twelve Apostles, and the Presiding Bishopric. Acting according to revelation, they make decisions as they are directed by the Lord. (See D&C 120:1.)

That's a very clear, understandable high-level explanation of the process including who makes the decisions.

Before getting to the question, here's a high-level explanation of my Church's process and who makes the decisions.

In my own Church (A Baptist one) it's handled in a more straightforward democratic fashion. Once per year, the Pastor puts together a budget of anticipated expenses (by category - Pastoral care, Sunday School Supplies, etc.) and anticipated income (based on last year's Tithes, growth trends, etc.), and presents it to the Church. The Church (meaning the voting (age 18+) members of the local Church) discuss and vote on the budgets. Usually we accept the Pastor's budget, but we may discuss and adjust certain line-items. Then, throughout the year, as needs arise, they are met if they fall within the budget. The Pastor has some leeway on certain items. For example, we have a line item for "Needs of others", and the Pastor can dole that out to individuals in need at his discretion.

One last thing before the actual question, I really am interested in how this is handled in other denominations, but I don't want to turn this into a "list" question. And I don't want to re-post the same question over and over naming different denominations in each. So I'm going to focus on one Church with a central authority and a well-defined structure that interests me, and ask about them.


Without further ado: In the Catholic Church, can someone provide an overview of who makes the broad financial decisions, and what is the process?

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The simple answer is: "it's very complicated". Individual churches, dioceses, national councils of bishops, religious orders, houses of those religious orders, the dicasteries of the Roman Curia, institutions like schools and hospitals: they are all to some extent independent and to some extent related. The Catholic Church is not a simple organisation, and it doesn't have a simple financial structure. –  lonesomeday Dec 20 '13 at 14:20
    
@lonesomeday - I sort of figured it was complicated. I'm sure they have a defined set of processes. (As an external observer, it seems to me that the Catholic church has everything well-defined. Very meticulous, the CC is.) That's where the question comes from - can anyone post something that is high-level enough to be reasonably understood, yet still be essentially correct? I'm sure the reality of how the LDS handles finances is also quite complicated, but they were able to provide high-level "layman's" overview. I'm just looking for the same here. –  David Stratton Dec 20 '13 at 15:18
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I would be shocked to see you find a better answer than lonesomeday's. I served on the parish finance council of St. Katherine Drexel's (Arch-Atl) from 2010-2012. The finances of the whole Church are much more locally autonomous than people think. The Church is big on subsidarity. –  Charles Alsobrook Dec 20 '13 at 16:59
    
@David Stratton our parish council operates much like yours. We would come up with a budget for the priest to approve along with publication for the congregation. For big purchases such as hvac renovations/steeple repair...we might have to reach out to Atlanta for a little help. But still it works from the ground up...not from the Popes "credit card" down. Our little church was purchased completely free from debt to the diocese or any financial institution –  Charles Alsobrook Dec 20 '13 at 17:04
    
Fyi the Archdiocese of Atlanta takes in and spends millions more than the diocese of Rome does each year simply because the city is much bigger. New York blows Atlanta away. A bishop is a bishop of his diocese for a reason –  Charles Alsobrook Dec 20 '13 at 17:09
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The simple answer is: "it's very complicated". Individual churches, dioceses, national councils of bishops, religious orders, houses of those religious orders, the dicasteries of the Roman Curia, institutions like schools and hospitals: they are all to some extent independent and to some extent related. The Catholic Church is not a simple organisation, and it doesn't have a simple financial structure.

In particular, it is complicated because the exact pattern is not replicated in every country. The national Episcopal Conferences have some degree of autonomy in setting a pattern which will apply in each country, according to what is appropriate. Moreover, the Vatican finances are both complex and opaque. Some income comes directly from donations from the faithful (a system known as Peter's Pence), while other income comes from the surplus from the Istituto per le Opere di Religione, the Vatican Bank.

There isn't a simple organisational structure, with the Vatican at the top and the parishes at the bottom and a simple flow of money up and down the chain. This is because the basic structure of the Catholic Church is based around is that of the particular church. This is generally (though not always) a diocese. It is local (that is to say, defined by geography) and headed by a bishop. (Code of Canon Law, Canon 368) If you want some of the theology behind this, the document Communionis Notio is relevant.

The diocese are institutionally independent of one another, though they are grouped in the national/regional Episcopal Conferences which have certain legislative powers in their region, and they are all subject to the Canon Law of the Catholic Church. Each diocese is divided into parishes. The priests in each parish are essentially "deputies" for the bishop.

The financial relationship that we might consider best, therefore, is between the diocese and the parish. (The financial organisation of the Vatican would take years to analyse fully!) The parish-diocese relationship is the most common financial relationship. It leaves a whole lot out, as you see from my opening paragraph. So let's look at one such example. I'm going to look at the Roman Catholic Diocese of Westminster and it's 2011 financial statement, for the simple reason that I could find it online.

The parishes receive income of various types (p19):

  • collections, donations and legacies (by far the largest)
  • parish activities
  • investment income
  • rent
  • trading income
  • disposal of assets

This is spent in various ways (p21). The largest are non-clergy salaries and parish assessments, which are in effect a diocesan tax: each parish provides a proportion of their income to the diocese. This proportion varies among Episcopal Conferences and possibly among dioceses: I haven't found any clear information.

In each parish, the parish priest is primarily in charge of finances:

In all juridic affairs the pastor represents the parish according to the norm of law. He is to take care that the goods of the parish are administered according to the norm of cann. 1281-1288. (Canon 532)

On top of this, there is to be a finance council in each parish:

In each parish there is to be a finance council which is governed, in addition to universal law, by norms issued by the diocesan bishop and in which the Christian faithful, selected according to these same norms, are to assist the pastor in the administration of the goods of the parish, without prejudice to the prescript of can. 532. (Canon 537)

So many decisions are taken on a local basis, by the priest with the advice of the finance council.

At a diocesan level, most income comes from the parish assessments mentioned above (p20 of the Diocese of Westminster report). In the diocese, there is again a finance council to manage finances:

In every diocese a Finance council is to be established, offer which the diocesan bishop himself or his delegate presides and which consists of at least three members of the Christian faithful truly expert in Financial affairs and civil law, outstanding in integrity, and appointed by the bishop. (Canon 492)

The function of this council is to provide "a budget of the income and expenditures which are foreseen for the entire governance of the diocese in the coming year".


So a short summary.

Most income comes to individual parishes. The parish priest is in charge of this, with the assistance of a finance council. A proportion of income goes from the parish to the diocese, where a finance council appointed by and presided over by the bishop is in charge of decisions concerning the governance of the diocese.

This is obviously not the whole picture. It covers only the parishes and diocese. These are the most significant aspect of the Church, but a lot more could be said about the various other aspects of the Church on local, national, regional and international levels. Moreover, to some extent these relationships vary significantly across the world.

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Perfect answer. –  Charles Alsobrook Dec 20 '13 at 16:53
    
Thank you! Very informative. –  David Stratton Dec 20 '13 at 17:53
    
Perhaps as an interesting aside for lovers of literature...last year Archbishop Gregory Wilton visited our tiny little parish (roughly 50 members), as well as all the other parishes in the diocese, to not only preside at Mass, but to announce that we are to receive $10,000 for supplementary expenditure. This is all thanks to the great literary work of Margaret Mitchell, the author of "Gone With the Wind." catholicnewsagency.com/news/… –  Charles Alsobrook Dec 20 '13 at 22:13
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The Pope, in consultatation with the Institute for the Works of Religion, aka 'The Vatican Bank' is in charge of the budget of the Vatican.

The lack of transparency into the budgetting and collection of funds has been in the news for the last couple of years, and Pope Francis has brought in outside consultants to suggest reforms.

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While this is correct as far as it goes, it doesn't go very far. Lonesomeday's comment should be an answer! –  Andrew Leach Dec 20 '13 at 14:58
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