Not long after I left a job at GE Capital to enter the Jesuits, I was living in a Jesuit community where one night we were discussing our community finances. The person in charge of the bank account--a bright and highly educated priest--said that we had $25,000 in our checking account, but that we really only needed $1,000 to cover weekly expenses like groceries, electricity and the like.
So, he said, we were in good shape.
I had to make sure I hadn’t misheard him, and I asked if he had those figures right. Yes, he said, and wasn’t it great we had so much money on hand?
“Wouldn’t it be better,” I suggested gently, “to put the extra $24,000 in an account where it could earn more interest than it could in a checking account?”
“Great idea!” he said. Several Jesuits congratulated me on what was seen as my financial wizardry. “It’s a good thing you went to Wharton!” someone said. But this was hardly high finance and I hardly needed all those Accounting courses at Wharton to know this; rather, it was something that most wage-earners knew instinctively.
It’s not surprising that many cardinals, archbishops, priests, sisters and brothers don't know much about business. Of course many do: think of all the clerics and sisters who run (and have often founded) universities, high schools, hospitals, and huge multinational institutions, and whose fundraising skills and financial acumen would put many on Wall Street and in corporate boardrooms to shame.
But many more are at sea when it comes to accounting, finance and general business practices.
That’s why today’s news that the Vatican has hired McKinsey & Co., one of the world’s premiere consulting firms, to review their communications strategies and KPMG, the accounting giant, to review the accounting practices in the Holy See was such welcome news.
Beyond the mess that has been the Vatican bank, the Catholic Church can learn a lot from business. This may seem counterintuitive, but the same church that has (rightly) spoken out so forcefully on the excesses and the limitations of capitalism desperately needs some capitalistic skills
How is it that so many seem to have so little expertise in what so many people take for granted? Not long after the financial crisis in 2008, one priest confidently told me, “Capitalism is dead.” I asked him if he could still go to the corner and buy a hotdog. Yes, he said. “That’s capitalism,” I said. “It’s not dead.” A few days later another priest with a Ph.D. asked me, as he read about the financial crisis, “What’s a bond?”
Whence the lack of business knowledge among otherwise smart and talented (and highly educated) men and women? There are two simple reasons:
First, many cardinals, archbishops, bishops, priests, sisters and brothers now in their 60s and 70s (that is, those running things in the church) often entered their seminaries or religious orders right out of college, even high school. Thus, many (not all, but many) did not have the important experience of having to earn a paycheck, balance a checkbook, manage employees, read a balance sheet, invest in the stock market, and so on.
The second reason is more basic. Once in the seminary or religious order, business education was not a part of their training. This is an immense lacuna in the training of priests and men and women in religious orders.
A few years ago a representative came from the Jesuit headquarters in Rome to ask Jesuits for their ideas and input about our training. Currently, Jesuits undergo a long training program—upwards of 12 years—before we are ordained. (We have Jesuit brothers too, who are not ordained, and whose training is also rigorous). Part of that training is full-time work--often as a teacher in the high school or college classroom--but just as much is study. That study includes two years of philosophy and three of theology. Diocesan priests have a similar breakdown between philosophy and theology.
What would I change about our training? asked the man from Rome.
Easy: Drop a year of philosophy and add a year of business. When you think of the likelihood that a Jesuit will one day be running a parish or school, Adam Smith is more important than Immanuel Kant. Pity the priest who finds himself presented with a sheaf of financial statements, without knowing what a debit or credit is. Pity the sister who finds herself running a school without ever having hired (or, more importantly, fired) a single person. Pity the bishop who is running an archdiocese and has to rely on his chief financial officer.
There is a reason that so much fraud and embezzlement happens in church groups—pastors often rely on a longtime business manager, almost blindly, and they themselves may not have the education to know when they are being duped. “We’re doing just fine, Father. Don’t worry!” Anyone running a business who does not know what a bank rec is shouldn’t running a business. This is not simply good management but good stewardship.
Fortunately, the Catholic Church is beginning to understand the need for formal training and formal advice in business, after years of turning up their nose at something that was seen as infra dig. (“Oh,” said one priest to me, “I have someone else do the ‘money stuff’.”) Many in religious orders and in seminaries are now able to study basic business and management techniques. Young Jesuits can for example take summer courses in basic accounting. Moreover, organizations like the National Leadership Roundtable on Church Management has for the last few years offered the expertise of business leaders to the US hierarchy.
A few years ago the head of a church organization, a priest, came to me in a dither. His high-paid employees weren’t working, but hanging around at the office coffee machine. “You have some business background, right? What should I do?” I asked what he would do if he were a manager at a McDonald’s and his cooks were taking too many breaks. “I’d tell them to get back to work!”
I asked if the church should at least be as professional, and well managed, as a McDonald’s. He laughed. “I guess I should tell them to get back to work, huh?”
Welcome McKinsey & Co. Welcome KPMG. Holy Mother Church needs you.