The Vatican Warns About Loss Of Donations

Vatican fashinistas better get these while they still can because the indifferent taxed laity are losing their indifference when it comes to using their tax money to support the Catholic church.

Catholic sex abuse scandal could trigger donations slump, Vatican warns

John Hooper in Rome guardian.co.uk, Monday 26 April 2010

Vatican officials fear the clerical sex abuse scandal could have a devastating effect on the finances of the Italian church, undermining what until now has been a bastion of the faith.

Italian taxpayers have until the end of July to declare their income for 2009 and, under a system in force in several European countries, they can opt for a proportion of their taxes to be paid to the church.

In Italy, 0.8% of income tax revenue is divided between state-run aid organisations and recognised denominations and religions according to the preferences expressed by taxpayers on their returns.

"The media always talk of class actions, compensation for the victims of abuse by the clergy and the legal fees which, since 2001 have forced the American dioceses to sell schools, hospitals, convents and universities," the daily La Stampa quoted a Vatican source as saying. "But in fact the biggest economic damage is done by the collapse in donations."

In Italy, among those who expressed a preference, the proportion of taxpayers earmarking a share for the church rose to a peak of 90% in 2004. It fell slightly to 87% in 2008. That percentage was far higher than the proportion attending Mass each Sunday, perhaps because only predominantly middle-class non-wage earners have to fill in a tax declaration. Last year, they earned the church some €900m (£776m) from the state.

With many Catholics across Europe saying the scandals have robbed them of their faith, there is a risk that this year's income could be much lower. In Germany, where church membership is registered and has a direct impact on church funds, pollsters for Focus magazine this month found that 26% of Catholics were reconsidering their religious allegiance.

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I'm hardly surprised the Vatican is admitting fears of a slump in donations. A potential slump of 26% in Germany is hardly a little slump. That's not the statistic I found most informative. The one I found informative is the fact mixing donations with taxes allows the Church to collect money from lots of people who are no longer active members but haven't yet changed their tax returns. That's a pretty sweet deal when you think about it. How many corporations would love the notion of generating income from large numbers of people who don't use their services or buy their products while having someone else do all the collecting?

Pope Benedict has has quite an advantage here. He can preach the leaner and meaner church, alienate more and more people, while collecting revenue from the taxes of the very people he's alienating. It kind of looks like this alienation process, now being further catalyzed by the Vatican response to the abuse crisis, has energized people to financially act on their spiritual marginalization. The Vatican has good cause to be very concerned. The version of a leaner and meaner Church was never going to be a go it alone operation. It's pomp and Vatican bureaucracy could only be sustained by additional revenue from marginalized Catholics indifferent to changing their tax status or from those who continued donating from a vague sense of past duty. All of that is now changing and these passive revenue sources are drying up. If any change comes in governance, it will be because of the revenue losses, not the loss of Catholic souls.

But then one could make the case the whole system exists to generate revenue and has for centuries upon centuries. It looks now though that bishops who need Cappa Magnas better buy them while they still can because the gravy train is drying up.