How is the Vatican financed?

BarcelonaAmong the reforms promoted by Pope Francis The Vatican highlights the change in the economic management of the Holy See, the governing body of the Catholic Church. After years of opacity, irregularities, and accusations of corruption, the Argentine pontiff created mechanisms to put the finances in order, make the accounts public, and control the institution's expenses.

The Vatican has no taxes or monetary policy, so the Holy See's only income comes from donations, ticket sales to the Vatican museums, and returns on its real estate holdings (more than 5,000 properties) and investments in various markets.

Donations come from the wealthiest churches (the United States, Italy, Germany, Spain, and South Korea) and from the faithful around the world, through what is called the Peter's Pence. This is a practice whose origins date back to the end of the 8th century and which Pope Pius IX legalized in 1871.

Pope Francis promoted the creation of annual budgets, and in recent years the Holy See has presented financial statements and made public its deficit and debt figures. According to the latest balance sheet, corresponding to 2023, the operating deficit was 83 million euros, five million more than the previous year.

In 2023, 48.4 million euros (five million more than the previous year) entered the coffers of the Òbol de Sant Pere (Saint Peter's Òbol) and 3.6 million euros in donations were added to the income from assets. However, expenses amounted to 109.4 million euros.

Since 2021, the Argentine pope has lowered the salaries of cardinals on several occasions, and in September of last year he sent a letter to the College of Cardinals in which he emphasized the need to achieve a "zero deficit." He asked the cardinals to make a greater effort on the part of all so that a zero deficit would not be a theoretical objective, but a truly achievable goal. "In terms of cost reduction, we must set a concrete example so that our service is delivered with a spirit of essentiality, avoiding the superfluous and choosing our priorities carefully," he said. He also asked organizations with surpluses "to contribute to covering the overall deficit."

Furthermore, on February 11, three days before being admitted for bilateral pneumonia, Francis ordered the creation of a new commission to encourage donations to the Catholic Church. Specifically, the goal will be to "encourage donations through special campaigns among the faithful, episcopal conferences, and other potential benefactors [...], as well as to find funding from willing donors for specific projects."

Reforms promoted by Francis

From the very beginning of his papacy, Francis reformed the Vatican's economic structures. In 2014, a year after his appointment, he created the Secretariat for the Economy, made up of cardinals and lay experts, to bring order to the finances. This body was given over to managing all real estate assets and funds, something that had previously fallen to the Secretariat of State.

Francis also strengthened control over the Institute for Religious Works, known as the Vatican Bank, ordering internal audits and the closure of some 5,000 suspicious accounts. He also mandated that this entity be the one to administer the Holy See's financial and liquid assets, with the aim of ensuring the ethical nature of these activities.

In the fight against tax evasion, he strengthened the role of the Vatican's Financial Supervision and Reporting Authority and created the position of a general auditor to oversee the management of institutions and optimize the use of their resources. Francis made his desire to clean up the Church clear when forced the resignation of Cardinal Angelo Becciu, who had been the Vatican's deputy secretary of state and was embroiled in a scandal involving opaque financial transactions involving funds from the faithful's donations. Becciu became the first cardinal tried by a Vatican criminal court and was sentenced in 2023 to five years and six months in prison for accounting irregularities.