Will U.S. Catholics keep giving?

While the 80 million American Catholics make up only 6 percent of their church's membership worldwide, their financial contributions — as much as a third of the Vatican's annual fund-raising for the pontiff's charities — has long given them a special place at the Vatican.

But a combination of changing demographics, sex abuse scandals and disputes with Rome over issues such as married clergy, female priests and homosexuality could threaten that status.

Before he became Pope Benedict XVI, Cardinal Joseph Ratzinger made his reputation as the Vatican's enforcer of church doctrine, and early indications are that he intends to emphasize strict adherence to those church teachings. If he does, many liberal American Catholics may fight back with the strongest weapon they have — their pocketbooks.

The demographic squeeze has been building for decades — each year, there are fewer and fewer nuns and priests available to provide low-wage labor to run church institutions. In 1965, there were 180,000 Catholic nuns in the United States. Today there are fewer than 80,000, with an average age of about 69. The number of parishes without priests has increased five-fold in the same period.

Now those workers must be replaced with lay workers, at more expensive lay salaries, putting the squeeze on church finances.

But the clergy sex abuse scandal is an even more immediate threat. According to BishopAccountability.org, which tracks abuse cases in each diocese nationwide, the scandal has cost the church more than $700 million, although it is unclear how much of that was covered by insurance.

A bankruptcy threat
And a bankruptcy case in Oregon could make a bad situation even worse.

Having paid out $53 million in settlements and facing many more lawsuits, the Portland diocese (followed by dioceses in Tucson, Ariz., and Spokane, Wash.) filed a bankruptcy petition last year, claiming it had no more assets available. Archbishop John Vlazny told reporters, "The pot of gold is pretty much empty.”

Lawyers for abuse victims immediately challenged that claim. Attorney Michael Morey, who represents more than a dozen alleged abuse victims, estimates that the church owns 100 pieces of property valued at between $300 and $500 million.

The church insists that under centuries-old canon law, most of that property belongs to local parishes and cannot be sold by the diocese. But lawyers for the abuse victims say that distinction has no meaning under U.S. law. "To have legal existence, [the parishes] have to be a person or have a corporate structure, and they are not," Morey argues.

It's traditional, but is it legal?
Traditionally the Catholic Church has been careful to separate its religious hierarchy, dominated by the pope and the Vatican, from its financial structure. Each of the 3,000 dioceses worldwide manages its own real estate, investments and contributions, and within each diocese, canon law carefully separates parish collections from those of the diocese.

That separation of the Vatican's religious authority from local church finances dates back to the early days of the church. At a time when it took months for a letter to travel from Paris or Mexico to the Vatican, popes did not want to be held responsible for the financial plight of individual dioceses.

Because of that structure, lawyers suing the church on behalf of sex abuse victims have been unable to sue the Vatican itself.

The separation at the parish level followed the same pattern. "There were not many priests, and they came on horseback infrequently, so it made a lot of sense for the parishioners to take care of the church themselves," said Joseph Harris, author of "The Cost of Catholic Parishes and Schools" and an accountant who tracks church finances.

If attorneys for abuse victims convince the Portland bankruptcy judge that distinction is false, it will give the lawyers a deeper pot of money to go after in seeking settlements. And the threat of being forced to sell local parish church or school property to pay for settlements could bring the impact of the abuse cases much closer to average Catholics. 

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