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text-align: left; “The Globe’s initial analysis focused on summarized Canada-wide revenue, property and net assets. But as the analysis became more detailed, it became clear we needed the help of experts in charity finance. We turned to Charity Intelligence Canada.” 
text-align: right; Globe & Mail,  https://www.theglobeandmail.com/canada/article-catholic-church-canadian-assets-methodology/ Investigation into the Canadian Catholic Church
Working with the Globe and Mail on this story was intriguing. It seems obvious that the Catholic Church is very wealthy, despite its claims of poverty and pending bankruptcy.  
Quick facts: A snapshot of the Church’s reported wealth in Canada in 2019. 

 
This makes the Catholic Church Canada’s largest charity by far, as shown in the table below. 
 
 
The Church’s claims of poverty are unfounded
With the public eye on Indigenous issues, schools, and child sexual abuse, the Catholic Church has faced reparations proceedings around the world. But in Canada, the US, Australia and Ireland, church lawyers have argued that the Catholic Church doesn’t have the money to pay its high settlements.
In 2016, Pierre Baribeau, the lawyer for the Canadian Catholic Church’s Corporation of Catholic Entities, suggested that fundraising to pay the $25 million reparation for residential school survivors would not happen as  https://www.theglobeandmail.com/news/politics/ottawa-scrapped-appeal-of-residential-school-settlement-ruling/article29704211/ many church organizations were already near bankruptcy.
This claim is hard to square with the financial figures the Church reports.
In Australia, after a similar claim of poverty, the Sydney Morning Herald said the Catholic Church misled and “grossly undervalued” its worth in the Royal Commission investigation.
“The church is notoriously secret about, and protective of, its wealth. Church leaders have repeatedly publicly underestimated church wealth and resisted greater financial transparency.” 
text-align: right; https://www.smh.com.au/national/catholic-church-s-massive-wealth-revealed-20180209-p4yzus.html Sydney Morning Herald, February 2018 
This secrecy makes it even more important to understand the real resources of the Catholic Church.
 
So, let’s dig in.
As of the end of 2019, The Catholic Church had $490 million in cash, $1,212 million in investments (stocks and bonds), and reports properties worth $3,297 million.  
It also had $124 million in donations that it had deferred, meaning they were received but neither spent nor reported as income, and will be reported as income in a future year. It had $961 million in other debts. 
In total, its net assets were $4.1 billion.  

This reported figure is conservative for three reasons:
1. Multi-million-dollar errors in what the Church reports to Ottawa:
The only information we have is what the various parishes and dioceses choose to report to the CRA Charities Directorate. In the few cases where we had audited financial statements, there are wide gaps between the figures reported to Ottawa and those in the financial statements.
Notably, the $4.1 billion figure for net assets includes just $2 – a toonie! – for the property value of the Archdiocese of Toronto. Under Generally Accepted Accounting Principles, it would report $940 million in property value. (See  https://www.charityintelligence.ca/media/audit_pdfs/AOT%202020%20AFS.pdf Archdiocese of Toronto’s 2020 income statement, Financial Note 2.) (How can a charity or indeed its directors and its auditors, pick and choose its own accounting rules is a fair question.)
2. Narrow scope:
Our analysis only covers 3,446 Catholic churches. It excludes monasteries, nunneries, schools, hospitals and other Catholic charities. These may also have large land holdings and investment portfolios. 
3. Lower historical book values: 
The property values, where reported, are likely the amount paid for properties when originally bought. This could have been hundreds of years ago. Historical values are significantly less than current market values. 
For context, using market values of properties, the Sydney Morning Herald’s 2018 investigation estimated the Australian Catholic Church is worth a conservative C$26.5 billion. Australia has 5.3 million Catholics, making about C$4,800 in church wealth per Australian Catholic. With 12.8 million Canadian Catholics, if the wealth per Catholic is the same, the Canadian Church would have an estimated wealth of $62 billion.
All of this means that the $4.1 billion dollar estimate is very conservative.
 
No need to sell the artwork
Lorraine Whitman, President of Native Women’s Association of Canada, and a Catholic, has gone on pilgrimages to the Vatican. She comments, “One painting, if that were sold, do you know how far those dollars would go in the healing of our communities?” 
Our financial analysis shows there is absolutely no need for such extreme actions like selling priceless art. No one is asking the Catholic Church to sell its Michelangelo’s, Raphael’s or chip away at the Sistine Chapel ceiling. In 2019, after all its charity programs and expenses, the Canadian Catholic Church reported an annual profit of $110 million. 
 
The Globe and Mail’s investigation could suggest that the Canadian Catholic churches’ wealth is on par with Rome’s. The  https://www.cia.gov/the-world-factbook/countries/holy-see-vatican-city/#economy CIA reports the Vatican’s wealth is only US$4 billion (C$4.8 billion). The Holy See’s total revenues in 2013 were a mere US$315 million ($C415 million). In comparison, in 2019, the Canadian Catholic Church’s total revenues are C$1,519 million, more than three times what’s raised in Rome. 
Learn more about other Canadian religious charities from Ci’s profiles: 
https://www.charityintelligence.ca/charity-details/895-archdiocese-of-toronto Archdiocese of Toronto 
https://www.charityintelligence.ca/charity-details/40-watch-tower-and-tract-society-of-canada Watch Tower – the Jehovah’s Witnesses in Canada 
https://www.charityintelligence.ca/charity-details/917-church-of-jesus-christ-of-latter-day-saints-in-canada Church of Jesus Christ of Latter-Day Saints in Canada
Latest Globe and Mail articles:
https://www.theglobeandmail.com/canada/article-catholic-church-charity-set-up-to-pay-residential-school-survivors/ “Catholic Church charity set up to pay residential school survivors spent $6.46 million on expenses”, August 25, 2021
 
Canadians need access to charities’ financial reports
 “Many researchers have attempted to estimate the wealth of the Church… but the efforts have been stymied by a lack of reliable financial data.” 
text-align: right; Sydney Morning Herald 2018 investigation 
Canadian charities’ financial statements are a challenge to get in many cases. These financial statements, with notes and detailed disclosure, are not posted on the Charities Directorate’s website. These public records are posted in the US, UK and Australia. For example, trying to get the figures on Vancouver’s Catholic Archdiocese. The Globe submitted a request for information and received images/2021/Vancouver_Archbishop_John_Paul_II_Pastoral_Centre_2020_audited_financials.pdf this from Vancouver Archdiocese’s file. It only submitted two pages! (In contrast, Archdiocese of Toronto’s financial statements are 21 pages long).  
“The charitable sector is supported by all Canadian taxpayers. For this reason, the CRA is committed to enhancing the transparency and accountability of charities by providing relevant information about charities to the public at large.” 
text-align: right; Sylvie Branch, CRA spokesperson,  https://www.theglobeandmail.com/canada/article-catholic-church-canadian-assets-methodology/ e-mailed statement to the Globe 
 
We do, however, have access to T3010 tax returns of religious charities. This is much better than the public information in the US and Australia. In the US and Australia, religious charities are totally exempt from filing financial information and have no regulatory oversight.  
Canada is good – it needs to be even better (see https://www.charityintelligence.ca/research-and-news/ci-views/45-r-d/690-access-to-information-suggestions-to-improve-access-to-information-on-canadian-charities Charity Intelligence’s submission: suggestion to improve access to information on Canadian charities.) We need to follow the example of the UK Charities Commission on the transparency of religious charities. 
We urge Canada’s charity regulator to require all large charities with over a million in annual donations, or assets over a million, to submit audited financial statements. 
 
Sources:  
Sean Fine and Gloria Galloway,  https://www.theglobeandmail.com/news/politics/ottawa-scrapped-appeal-of-residential-school-settlement-ruling/article29704211/ “Federal government scrapped appeal of residential-school settlement ruling”, Globe and Mail, April 20, 2016. 
The Canadian government dropped its appeal with the Liberal government within a week of the Trudeau government taking office on November 4, 2015.  
Royce Millar, Ben Schneiders, Chris Vedelago  https://www.smh.com.au/national/catholic-church-s-massive-wealth-revealed-20180209-p4yzus.html Catholic Church’s massive wealth revealed, The Sydney Morning Herald, February 12, 2018 
Tim Parker,  https://www.investopedia.com/articles/investing/030613/secret-finances-vatican-economy.asp The Secret Finances of the Vatican Economy, July 27, 2021 
CIA  https://www.cia.gov/the-world-factbook/countries/holy-see-vatican-city/#economy The World Fact Book, Holy See Vatican City, accessed August 2021 
 
If you find Charity Intelligence’s research useful in your giving, please https://www.charityintelligence.ca/donate donate to support our work. Being funded by donors like you maintains our independence to help Canadians be informed in their giving. Canadians donate over $17 billion each year. This giving could achieve tremendous results. We hope Charity Intelligence’s research helps Canadians give better.
Legal disclaimer: The information in this report was prepared by Charity Intelligence Canada and its independent analysts from publicly available information. Charity Intelligence and its analysts have made endeavours to ensure that the data in this report is accurate and complete but accepts no liability.
The views and opinions expressed are to inform donors on matters of public interest. Views and opinions are not intended to malign any religion, ethnic group, organization, individual, or anyone or anything. Any dispute arising from your use of this website or viewing this material shall be governed by the laws of the Province of Ontario, without regard to any conflict or law provision. 

Where to give to help those in need in Haiti

On Saturday, August 14, a 7.2 magnitude earthquake struck the southwestern coast of Haiti near the town of Nippes. Charity Intelligence recommends the following three charities to help the efforts in Haiti:
https://www.charityintelligence.ca/charity-details/81-doctors-without-borders Doctors Without Borders
https://www.charityintelligence.ca/charity-details/33-world-vision-canada World Vision Canada
https://www.charityintelligence.ca/charity-details/59-samaritan-s-purse-canada Samaritan’s Purse
To find out more about their efforts in Haiti, images/2021/Haiti_2021_earthquake_disaster_response.pdf please read our report.
 

Given the mixed response of foundations in 2020 to the covid pandemic, Finance should immediately enact a higher, temporary disbursement quota of between 7.5%-10%. Canada’s permanent disbursement rate should be restored to 5%. Restoring the disbursement quota is a simple and effective tool to grow funding for charities and is in Canada’s best public interest.
images/2021/Charity_Intelligence_submission_to_Finance_2021.pdf Read Charity Intelligence’s submission for a higher disbursement quota.
 

A higher, temporary disbursement quota of 7.5%-10% is appropriate for the covid response.

The large foundations had a voluntary mixed response to the first year of the covid pandemic. On review of the T3010 filings of Canada’s largest 100 private foundations, one can see their activity during covid. Of these 100 largest private foundations, the 2020 T3010 filings for 72 are now posted on the CRA Charity Directorate’s website.
Sadly, this analysis shows a varied response to the covid pandemic. Some foundations were champions. They were first responders for covid, funding frontline charities. This exceptional leadership was not followed by other private foundations. Some foundations that pledged to give +5% reneged on their covid promise.
In the first year of the covid pandemic, here’s how 72 of the largest private foundations responded:

 

Covid champions

Like everything else in the charity sector, there are strong performers and weak performers.
more than doubled its disbursements from 17% of assets to 41% of assets during covid. It gave $17 million to charities serving vulnerable people, including food banks, homeless shelters and Indigenous programs.


text-align: right; Charity Intelligence ” https://www.charityintelligence.ca/research-and-news/ci-views/43-charity-news/684-late-but-hopefully-not-too-little Late, but hopefully not too little.” February 2021

A temporary covid disbursement quota

Based on the analysis of the 72 large private foundations spending in 2020, here’s a rough estimate of how a temporary covid disbursement quota would affect spending. Rather than the additional money, the percentage increase is likely a better indicator of how a special covid disbursement rate would affect spending.
If a 7.5% disbursement quota was in effect for 2020, charity spending would have increased by 36%.
If a 10% disbursement quota was in effect for 2020, charity spending would have increased by 64%
11 of the largest private foundations spent more than 10% of assets in 2020.
Among these 72 foundations, investment assets increased by $604 million. Even with a 10% disbursement quota, the size of foundation assets would still increase.
Our model shows a disbursement rate of 11.49% would have offset the increase in foundation assets during 2020.
 
 

Conclusion

Others have submitted to Finance that a disbursement quota will not materially increase funding to charities. We disagree. Raising the disbursement quota will be the pivotal reform of Canada’s charity sector that will unleash billions in additional annual funding to charities.
Canada’s economy in August 2021 is about $50 billion lower than where it was before covid. “We’re not out of the woods” with “shockingly weaker than expected” figures released over the summer. Raising the disbursement quota will not alone get us back to where we were, but it will be a meaningful contribution. Canadian foundations have the capacity to make this greater contribution.
Others have submitted that a higher disbursement quota may place too much burden on foundations to make this change. For far too long, many of Canada’s largest foundations have had it easy by only granting 3.5%. 
Moving to a temporary disbursement quota between 7.5%-10% for a short covid period will stretch them. Change is difficult. Yet, thankfully, some foundations made this change quickly.
For those foundations where the change is too hard, or they lack the capability to grant more, the 110% financial penalty is an easy-out option. What would be given to charities can instead be paid to the Charities Directorate for its essential work supporting Canada’s charity sector. 
 
 

As the Charity’s Commission’s own research shows, the charity sector can no longer count on being given an automatic benefit of the double. The public wants reassurance that charities are behaving charitably as well as delivering their charitable purposes … and to meet growing demands on retaining the confidence of the public, and the public’s view of the value provided to society. It is this goodwill that underpins the legal and economic privileges charities enjoy.”

text-align: right; UK Charities Commission
images/2021/Charity_Intelligence_submission_to_Finance_2021.pdf Read Charity Intelligence’s full submission for a higher disbursement quota. 
 
Previous articles on Canada’s disbursement quota:
https://www.charityintelligence.ca/research-and-news/ci-views/43-charity-news/684-late-but-hopefully-not-too-little Late, but hopefully not too little, February 24, 2021
https://www.charityintelligence.ca/research-and-news/ci-views/45-r-d/663-charity-intelligence-finance-committee-statement Statement to Finance Committee, August 6, 2020
 
Notes:
Canada’s 100 largest foundations: Charity Intelligence created this category in 2020 based on the 2018 T3010 data. With “circulation”, some foundations growing and some shrinking, this may not accurately reflect the 100 largest foundations in 2021. For this submission, we wanted to compare how private foundations responded to covid in relation to data we had for 2018.
Mastercard Foundation is Canada’s largest private foundation but is excluded from this list because of unique issues. 
Apotex Foundation is also excluded. In 2020, it granted $67.8 million, a disbursement quota of 60%, to one charity that is undisclosed.
Our analysis of these largest 72 private foundations includes RBC Foundation. This is a private foundation yet acts as a “flow through” with annual grants closely matching annual income. In 2020, RBC Foundation’s payout rate is 127%. RBC Foundation’s high disbursement rate affects the average disbursement rate by 150 basis points. For example, in 2020, including RBC Foundation creates an average foundation disbursement rate of 9.6%. Without RBC Foundation, the average disbursement rate is 8.1%.
In the sensitivity analysis of a special covid disbursement quota one needs to bear in mind this is an influential but small sample size that may not be indicative of other foundations.
 
Charity Intelligence’s research on foundation disbursement quotas is generously funded by The Amazing Moustache Foundation to strengthen philanthropy in Canada.
If you find Charity Intelligence’s research useful in your giving,  https://www.canadahelps.org/en/charities/charity-intelligence-canada/ please consider donating to support our work. Being entirely funded by donors like you maintains our independence and objectivity to help Canadians be informed in their giving. Canadians donate over $17 billion each year. This giving could achieve tremendous results. We hope Charity Intelligence’s research helps Canadians give better.
 
Legal disclaimer: The information in this report was prepared by Charity Intelligence Canada and its independent analysts from publicly available information. Charity Intelligence and its analysts have made endeavours to ensure that the data in this report is accurate and complete but accepts no liability.
The views and opinions expressed are to inform donors on matters of public interest. Views and opinions are not intended to malign any religion, ethnic group, organization, individual, or anyone or anything. Any dispute arising from your use of this website or viewing the material hereon shall be governed by the laws of the Province of Ontario, without regard to any conflict of law provisions.