Church finances - peril and possibility

It has been a year unlike any other. But this Easter Sunday, Catholics will be feeling a degree of relief: not only that coronavirus vaccines are being rolled out and the end of lockdown is in sight, but also that they can go to Mass. Last year, Holy Week and Easter came at the start of the deep lockdown and the churches were all closed. Some will be at church, their lives changed forever: loved ones lost, jobs gone, hopes for the future dashed. Others will be at home, perhaps watching Mass livestreamed, as has become their regular practice. Some, perhaps for the first time in their lives, will simply miss the Easter services altogether. A return to normal life seems not far over the horizon. Yet is that really possible – or even desirable?
The coronavirus pandemic has changed society and the Church has been changed as much as any other part of it. Social distancing has meant that churches are not as full as they once were. Some people will never return. They have got out of the habit; the obligation to attend Mass on a Sunday no longer matters to them in the way it once did. Some may still feel that they will be safer from the virus if they stay home to watch a Mass from a church of their choice on their laptop.

Livestreaming has been one of the success stories of the pandemic. Many churches and cathedrals have found that substantial numbers of people – many more than attended in person – are logging on for Mass. Live­streamed prayer and study groups have also proved popular. One issue up for discussion is how, in this digitally comfortable age, parishes will be able to lure back most of their existing Massgoers while also persuading some of those who have dipped their toe into the waters to physically cross the threshold. Many are saying that this will be essential for the Church’s spiritual and pastoral future. But there is another reason why the return of ­people to the pews is essential. Money.

Prayer might be essential to faith but every institution requires money to oil its wheels. The Church has to provide priests with an income and pay its staff their salaries, finance its buildings and meet the many pastoral needs that people look to the Church to fulfil. Without people coming to church, income has nosedived. And as a result, as the Archdiocese of Liverpool put it in its annual report, the global pandemic “has had a catastrophic impact on the charitable activities and finances of the archdiocese and its ­subsidiaries”.

For Liverpool, this economic disaster was partly due to a collapse of income from commercial trading operations and charitable activities, but above all it was caused by a sharp fall in donations. This has been ­replicated in parishes and dioceses across England and Wales.

One consequence has been that many lay- people working for dioceses have been put on furlough, with up to 80 per cent of their salaries funded by the government’s scheme, which has been extended to September. As the restrictions start to lift, employers will have to help cover the cost of their furloughed workers’ salaries. In the Diocese of Leeds, for example, a quarter of employees are on a mixture of full-time and flexible furlough. “At its height”, a spokesman told me, “close to 50 per cent of our employees” were on ­furlough.

But dioceses have to look much further than the furlough scheme for ways to ameliorate their losses. As one financial expert who advises the bishops says: “Problems have got much, much worse for dioceses. Apart from the very largest, the situation is dire.” Staff working in diocesan education departments can’t be placed on furlough. Nor can the number of people working in safeguarding be reduced; indeed, the costs of ensuring that parishes and schools are safe spaces for children are rising as the Church makes this a priority after the coruscating criticism it received last year from the Independent Inquiry into Child Sexual Abuse (IICSA). For some dioceses, their involvement in IICSA itself proved a major financial headache. According to its most recent annual report, in 2019 Birmingham spent £277,000 on meeting the information requirements of the inquiry, and another £180,000 on legal and professional fees – none of it recoverable from insurers as it did not arise from any claims.

At the same time that income from congregations’ giving is dropping, dioceses are reporting a decline in investment income. In dioceses where the calamitous financial positions of parishes means that they cannot pay their monthly diocesan levy, cash reserves may well have had to be raided. Birmingham, Liverpool and Clifton are among the dioceses whose annual reports refer to the need to dip into reserves.

Part of the solution may well be for dioceses – and even for parishes that have the­ wherewithal – to liquidate some of their assets. Land or property left to the Church may have to be sold. “It may not be ideal to sell in the middle of a pandemic,” one diocesan trustee told me, “but some may think they do not have an alternative.”

So what of the future? Regular giving by Massgoers remains the financial bedrock on which everything else depends. There will be yet more drives to persuade parishioners to give by standing order. Efforts are also being made to encourage more cashless giving. In the Archdiocese of Birmingham, for example, 18 contactless payment points have been installed in churches with another 10 to come in the next few weeks. In Leeds, where income has fallen by 30 per cent, the diocese has cut its cost base by 25 per cent. It, too, is focusing on expanding electronic donations, online gift aid declarations and giving by text – measures that have generated £200,000 in the past year.

There have been creative solutions to the crisis, but the financial headaches just keep coming. All dioceses have ageing priests, who need housing and often costly specialist ­nursing care. And with the number of priests coming forward for ordination falling, roles that priests could previously have performed have to be covered by laypeople, “many of whom will prove a more expensive ­alternative”, as Birmingham archdiocese’s annual report puts it.

Even without the pandemic, dioceses were facing the challenge of diminishing lay financial support. The figures in Liverpool, for example, are stark: in 2019, average weekly Mass attendance was 38,314 – a whopping drop of 55 per cent on the 85,357 reported in 2000.

Fewer people were already paying for higher salaries, rising maintenance costs for historic churches and increasing demands on the Church’s pastoral and welfare services. Senior figures in Westminster expect the fall-off in the number of Massgoers to continue post-pandemic, and not just because some will prefer to continue livestreaming Mass.

The rising cost of living in London is pushing people out of the diocese – although they will no doubt end up in other dioceses. Brexit may lead some Europeans who have made their home in London in recent years – whether affluent Parisian bankers or Polish painter-decorators – to head home. “A conservative estimate,” says the Westminster trustees’ annual report to the Charity Commission, “would be that the charity needs to be resilient to a 20 per cent reduction in the Catholic population.”

That has consequences for just about everything a diocese does. It affects the demand for school places, it lessens incomes, it means parishes become less vibrant. And it can also mean, just as the pandemic’s impact on finances does, that diocesan trustees become so focused on money troubles that making ends meet starts to matter more than vision or pastoral care.

This is something that one of the Church’s most influential thinkers, Abbot Christopher Jamison, is deeply concerned about. “The Church in the pandemic era is facing three challenges: ecclesial, social and financial,” he says. While the ecclesial challenge concerns the care of the faithful, the social challenge concerns the Church’s engagement with the rest of society, especially people most in need: those who have lost their jobs in the pandemic, who are destitute, or who are spiritually and emotionally scarred by the last 12 months. Jamison fears the financial challenge may come to dominate the Church’s attention. “We have to be careful,” Jamison says, “that if finance dictates, then that can lead to perverse outcomes. We need an ecclesial vision first and then we find the funds. If we inspire ­people, that can happen.”

With dioceses now run by diocesan trusts that report to the Charity Commission, they are duty-bound to ensure they remain going concerns. “I worry,” says Jamison, “that being a ‘going concern’ dictates the whole show. For the bishops, the pandemic era is a real ­challenge. They will be tested to generate a new vision for the Church.”

The demand for livestreamed Masses and for online retreats and counselling suggests that after an extraordinary year people are more open to faith than for a generation. They, like Massgoing Catholics, are looking to see what vision the modern Church offers. As the former master of the order of preachers, Timothy Radcliffe, puts it: “It is impossible for us to foresee today the ultimate consequences of this pandemic. There have been many pandemics in the past, but this is the first one which is being experienced as global. Every day one can read how many people became infected or died in every country on the planet. It may lead to social disintegration. But if we grasp the opportunity, it could lead to a deepening of our mutual bonds. It is a time of peril – but also of possibility.”

Catherine Pepinster is a former editor of The Tablet.