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If The Catholic Church Were A Business, How Would You Fix It?

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The next pope will be the spiritual leader of the world's Catholics. He will also be leading a multibillion-dollar financial empire. And from a business perspective, the Catholic Church is struggling.

We talked to several people who study the business of the church. Here are a few of the issues they pointed out.

1. Globally, the church's employees are in the wrong place.

Most Catholics live in Latin America, Asia and Africa, and that's also where growth in church membership is higher. But only about half of all priests are in Latin America, Africa and Asia.

If the church were a business, the CEO would just transfer existing workers to other parts of the world. But the church just isn't organized to make that kind of thing happen.

"On matters on faith and morals, the church is very centralized, very hierarchical," says Chuck Zech, director of the Center for the Study of Church Management at Villanova University. "But on the temporal issues of finances and actually running the day-to-day operation, each diocese is very independent."

A diocese is a geographical area with a bunch of churches in it. Run by a bishop. And they all basically raise their own money, through collections, and make their own budget.

2. In the U.S., the church doesn't take advantage of its size.

Because each diocese makes most of its own business decisions, "the church is missing out on purchasing power, procurement, economy of scale," says Kerry Robinson, director of the National Leadership Roundtable on Church Management.

If all the Catholic dioceses and schools and hospitals in the U.S. got together to negotiate bulk prices for the things they needed — just ordinary stuff like office products and transportation — the church could save billions of dollars a year, Robinson says.

3. The church's financial reporting is a mess

"Without systemic accounting and disclosure, there is enough doubt these days about how money is being managed that we don't whether the hungry are being fed, the naked are being clothed and those in need are getting health care and education," says Jim Post, a management professor at Boston University.

There is no standard financial reporting for church dioceses. This was a huge frustration for everyone we talked to: It's hard to figure out how to fix what's wrong with the church's business if you can't figure out what's going on with the money.

And as the Catholic Church has recently discovered, this lack of transparency can have much darker implications.

Tom Doyle, a priest with a Harvard MBA, says one of the big organizational challenges to come out of the recent child sex abuse scandal is the erosion of confidence. People stopped trusting that the Catholic Church would tell them the truth.

Doyle used to work for Deloitte & Touche, the big consulting firm, before he became a priest.

"How do you get trust back? You earn it," he says. "So we are going to have to err on side of being more transparent about things than we have in the past."

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