Catholic Transparency

The Book of Revelations

Cologne Cathedral Unkel
The majestic Cologne Cathedral belongs to what is possibly the wealthiest diocese in the world.
  • Why it matters

    Why it matters

    The billions owned by the Cologne diocese could spark an international debate about the role the Catholic Church should play in society.

  • Facts

    Facts

    • The Cologne diocese holds €3.35 billion, or about $3.81 billion, worth of assets, making it possibly the world’s richest diocese.
    • In the town of Limburg, renovations to the residence of former Bishop Franz-Peter Tebartz-van Elst went €25.5 million over budget.
    • The diocese of Mainz showed total assets of €823.3 million for 2013, but it has not yet evaluated some of its real estate.
    •  
  • Audio

    Audio

  • Pdf

When asked why he took the name Francis, the current pope said he was thinking of Francis of Assisi, who extolled the virtues of poverty.

“Oh, how I would like to see a poor church for poor people,” he said, shortly after being elected in 2013.

This is in stark contrast to the 2013 figures released by the archdiocese of Cologne, which has recorded assets of €3.35 billion, or about $3.81 billion, according to its balance sheet.

Cologne, possibly the richest diocese in the world, is the first one in Germany to release a balance sheet, audited according to German commercial code.

Of the total, €2.4 billion is held in financial investments and €612 million in real estate.

The Cologne diocese had a surplus of €59 million in 2013. For 2015, the vicar general expects profits of €14 million.

A lot of these assets, however, are entered as reserves for impending future costs – for pension obligations, maintaining 600 listed churches and for continuing pastoral and charitable work. Because the number of church members is steadily dropping, income from church taxes will inevitably decrease.

“The archdiocese uses these assets for pastoral work, for the people who live in the archdiocese,” said Stefan Hess, the vicar general in Cologne. “We want to continue using the assets effectively in the long-term.”

That describes the dilemma facing German dioceses today. They see themselves as charitable organizations, but at the same time, they hold huge sums of money – and should be more transparent.

Keeping finances secret is an invitation to misuse and squander money, as illustrated by the recent scandal in the archdiocese of Limburg. For years, former Bishop Franz-Peter Tebartz-van Elst had concealed the exploding costs of renovating his official residence. Instead of the planned €5.5 million, the total soared to €31 million.

The “Bishop of Bling,” as he came to be known, offered to resign and the church accepted this last year.

Archdiocese of Cologne-01

 

In a concerted initiative, the 27 German dioceses have agreed to draw up balance sheets and comply with standard accounting rules by 2016. There is disagreement, however, about how far standardization should go.

Some want to adopt full-blown business accounting practices. Following Cologne’s example, the Aachen diocese, on Germany’s with the Netherlands and Belgium, will submit a balance sheet in strict accordance with German commercial code.

“We have implemented a system that is established in commercial companies and enables a sustainable and consistent representation of assets and income,” said Joachim Eich, financial director at Aachen.

Other dioceses want to follow their own rules, at least partly. For that reason, future figures won’t be comparable on a national basis.

Thomas Schüller, professor of ecclesiastical law at the University of Münster, believes dioceses in Germany are caught in a kind of “pincer movement.”

On one hand, the public is calling for more open scrutiny of church assets following the Limburg fiasco. On the other, Pope Francis is calling for the church to be “poor.”

“This means rich German dioceses in particular having to justify what they do with their money,” said Mr. Schüller.

There is particularly high pressure on rich dioceses like Cologne. “Every day around €2 million is spent, flowing to parishes, Catholic aid agencies as well as development aid,” its vicar general explained.

Because of surprisingly strong growth in church tax revenues, the Cologne diocese had a surplus of €59 million in 2013, despite the many tasks it had to perform. That will be entered in church accounts as reserves.

For 2015, the vicar general expects profits of €14 million.

“It is unsatisfactory that we have no overview of the finances of the Catholic Church in Germany.”

Klaus Pfeffer, Vicar general, Essen Diocese

Up to now, church financial data has been something of a patchwork quilt. The diocese of Mainz shows total assets of €823.3 million for 2013, but has not yet evaluated several real estate properties.

The reportedly wealthy diocese of Munich-Freising, which owns some 7,000 real estate properties, has not yet evaluated those assets.

There is also an enormous difference in wealth between dioceses. “There are dioceses like Passau in southeast Germany or Magdeburg in former East Germany, that lead a hand-to-mouth existence,” ecclesiastical expert Mr. Schüller said. “If there wasn’t a financial equalization fund between dioceses, they wouldn’t be able to cover day-to-day needs.”

While Cologne has a budget of more than €800 million, for example, Magdeburg’s budget is less than €29 million.

Aachen’s financial director, Mr. Eich, said dioceses couldn’t be compared with commercial companies in some respects. For example, every diocese has many independent legal entities – from the episcopal seat to the archdiocese itself, in addition to charitable organizations, religious communities and companies that operate homes in individual municipalities.  Each one draws up its own separate balance sheet and usually has its own assets.

“It is unsatisfactory that we have no overview of the finances of the Catholic Church in Germany,” said Klaus Pfeffer, vicar general of the Essen diocese. “And because of the extremely complex structure, we will not be getting one.”

That makes it all the more important for independent financial controls within dioceses, to make it more difficult for money to be wasted.

Mr. Schüller considers Berlin, Munich and Hamburg to be exemplary. “They adhere completely to the commercial accounting code, in which church finances, the episcopal seat and capital budget are controlled by experienced, external professionals,” he said.

But some bishops, Mr. Schüller noted, still have a problem with “relinquishing so much power and letting outsiders check the books.”

 

Florian Kolf is Handelsblatt’s newsroom editor. To contact him: kolf@handelsblatt.com.

We hope you enjoyed this article

Make sure to sign up for our free newsletters too!