Boston Globe columnist Eileen McNamara today charges that political insiderism is responsible for the delay of a bill that would require churches, synagogues and mosques to do the same kind of public financial reporting as non-religious, nonprofit organizations. McNamara writes:
Churches became exempt only in 1954 from the reporting requirements that govern tax-exempt, charitable organizations in the state. The sex abuse scandal illuminated the folly of such secrecy. Critics are being disingenuous when they argue that disclosure would be an infringement on religious freedom. This is not about theology; it is about money.
This follows on the heels of a Globe story by Frank Phillips last week reporting that Protestant groups had succeeded in postponing action on the bill, drafted in order to force more accountability on the part of the Catholic Church.
So is McNamara right? I don’t know. Her argument makes sense. But here’s another perspective: A friend who is an Episcopal priest told me last week that the bill, if it passes, will cost her small, struggling North Shore church $5,000 a year in paperwork and accounting expenses — possibly forcing it to close.
Moreover, she said, the bill wouldn’t even accomplish the goal of requiring the Boston Archdiocese — the real target in all of this — to disclose the finances of each individual Catholic church. The archdiocese simply doesn’t budget that way, keeping everything in a central account. Legislators would like to know more because of the church closings, some of which appear to have been motivated by internal church politics and/or land-value considerations.
Opponents of the bill argue that it would violate the constitutional separation of church and state. I could argue just as logically that exempting churches from the same reporting requirements with which other non-profits must comply amounts to unconstitutional state sponsorship of religion.
Nevertheless, the possibility that a bill aimed at the Catholic Church would almost certainly miss its target and instead harm innocent bystanders suggests that we need to know more about it before the state Legislature votes.
As McNamara notes, this bill has been floating around for quite a while. It’s time for the Globe to stop covering this solely as a Beacon Hill story, and instead to explore what it would mean for churches, synagogues, mosques and other religious organizations.
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neil
The Episcopal priest is begging the question. A non-religious nonprofit organization may also be small and struggling, but is not, and should not be, exempt from the requirement of transparency in its bookkeeping. A silly excuse, really. The Archdiocese might similarly protest that they too, though not small, are struggling. So what!I find the separation of church and state argument ludicrous. The state is effectively subsidizing these organizations, in return for which it asks only that they all be treated the same. We are not interested in your theology–teach whatever cockamamie ideas you want–we only want to be able to see how you are managing your finances which we subsidize. If the requirement is too onerous, an organization, religious or not, is free to pay taxes like everybody else, then do its bookkeeping as it pleases.Eileen notes that this exemption for religious organizations is relatively new–only since 1954. How did they manage before that?How the Archdiocese happens to do its bookkeeping is irrelevant. The fact that it objects so strenuously to this reasonable request should tell you something. The immediate target of the bill may be the Catholic church, but the long-term benefit of such a bill would be to guard against similar behavior from any church. No wonder the Protestants are agin it too.As a ten-year veteran of the local Catholic school system, I find the hypocrisy of the Archdiocese appalling. And these are the people who presume to provide us with ethical guidance. Bah.What have religious organizations, whether they be mighty or struggling, done to deserve the benefit of the doubt? What makes them so special? Nothing. Open up the books, in the name of fair treatment. Religious leaders especially should support this bill. How tiresomely predictable that they do not.Set an example for a change! Otherwise they only demonstrate that they are as self-serving and venal as anybody else and so relinquish whatever moral authority they still have the gall to claim for themselves.
Marian Walsh, State Senator
Disclosure Bill Good for all CharitiesBy Marian Walsh, State SenatorThe proposal pending before the Legislature relative to Massachusetts’ charities is narrow and, when enacted, will better protects the taxpayers, the donors and that charities. Although it will not solve all the problems within the charitable community, it will provide more accountability for the donors, the taxpayer and the charity. Religious organizations are public charities and, as such, should disclose their finances as more than 30,000 other charities in Massachusetts do currently. There has been a lot of discussion of church and state surrounding Senate 1074. The separation of church and state is vital to the continued freedom of our nation. This separation does not mean that the state and the church do not interact; it means the state cannot interfere with the beliefs or operation of any religion. It also means the state cannot establish a religion of its own. Applying neutral laws to charities does not violate the separation of religion and the state. The goal of this bill is to bring all charities into compliance with a neutral charitable law. This reporting requirement will remove an inequity in charitable law that allows religious organizations to keep their donors and the public in the dark about their finances. This bill does not expand the powers of the attorney general. He or she may already obtain this information with a court order. The attorney general cannot currently run any religion and will not be able to run a religion when this bill becomes law. Public disclosure of finances is not a punishment. Public disclosure protects the taxpayers, who subsidize all charities with tax breaks; the donors, whose money finances the charity; and the charity itself, whose operation provides a greater good to society. All other charities, large and small, currently provide basic financial information and all religious charities should as well. Some have argued that religious organizations should only provide this information to their members. This is unacceptable because when a religious organization receives exemption from taxation they become a public charity. Citizens’ tax bills are higher than they would be if charities paid taxes. They are exempt from taxation because past legislatures decided that the benefit they provide society removes a cost to the state, so they should receive a tax exemption. This is a good public policy. It should continue and part of that policy requires financial disclosure. Non-believers are subsidizing these charities and the public deserves financial accountability. If a religious organization does not want to disclose its finances then it can choose to pay taxes and be private. This bill is not about the Catholic Church and it is not a punishment, as some have suggested. The Catholic Church is one of the largest public charities in Massachusetts. A situation that developed in that charity was the genesis of this bill. However, this bill is about all charities, large and small, providing information to the public. Contrary to what some suggest, small churches are not “collateral damage”. Small churches have the same obligation to publicly disclose their finances as large churches do. The charity law in this state already protects smaller charities from making this process too burdensome. All charities that earn less than $100,000 in revenue in one year simply file the Form PC, having completed the form on their own. If the charity earns between $100,000 and $500,000 then they file the form along with a CPA review statement, which can cost as little as $500 and as much as $6,000 depending on the complexity of the finances of the charity. If a charity earns more than half a million dollars in one year, then they must file a CPA audited statement, costing around $7,000 for a simpler audit and $12,000 or more depending on the complexity of that charity’s finances. Charities as small as a youth little league file this form, as do charities as large as the Massachusetts General Hospital. Under the pending proposal, smaller Protestant or other independent churches will have to file like the little leagues now do. The larger, hierarchical churches, such as the Catholic Church, will also have to file a public financial disclosure form. As the Evangelical Council for Financial Accountability, founded in 1979 with 1,187 organizational members in all 50 states and US territories, has stated on their website at http://www.ecfa.org, Commentary on ECFA, Standard No. 3:An audit by an independent certified public accounting firm helps ensure—and is evidence of—financial accountability to an organization’s constituencies. The independent auditor tests the data underlying the financial statements to form an opinion on the fairness of their presentation in accordance with accounting principles generally accepted in the United States… The independent auditor has no ties to management and no responsibility for governance or finance (such as a volunteer fund-raising chairman). The public can place faith in the audit function because an auditor is impartial and recognizes an obligation for fairness.It is time to truly support charities in Massachusetts by providing a minimal level of public disclosure of charitable finances to better protect the taxpayer, the donor and the charity.Senator Brian Lees (R-East Longmeadow) said on the floor of the Senate: “This is what is right for the residents of the Commonwealth. It will give your charity, church and all non-profits more support.”
Anonymous
Me thinks the Episcopal Priest is grasping at straws. While this is certainly aimed at the Catholic Church, the Episcopal faithful deserve to know if someone is stealing their hard earned funds.As far as it costing $5k a year for small little churches…that’s hogwash.If it’s a small Church, it would probably only take filling out a one page sheet.
The Emerson Avenger
I wonder what the position of the UUA is on this matter? Who is to say that the finances of the UUA or individual UU churches are squeaky clean? There is actually some evidence that the past financial practices of the UUA and CUC bear might not stand up well to an examination by forensic accountants.
Zuska
the argument in support of granting churches tax exemptions is not solely rested in separation of church and state. it is also based upon the fact that charities, at least historically, have given to the community in services which would otherwise need to be shouldered by the government. There is also at least one case in Massachusetts that states that church members do not in effect create a “trust” when they give money to their church. Because church members are aware of the fact that churches cannot be examined by the church, they give their money with the understanding that it will be used as the church deems fit. the only exception is when money is given with a designated purpose …. in writing.
Zuska
Sorry – one more point.Prior to 1954, the reporting requirements for religious organizations was not enforced. they weren’t reporting.