274. Subsidiarity-integrated Centralisation and Fiscal Management in the Church

Table of Contents

Introduction

The Fiscal Dimension of Subsidiarity

Centralised Financial Information

Economies of Scale and Collective Procurement

Equitable Distribution of Resources

Financial Accountability and Transparency

Central Coordination and Investments

The Danger of Fiscal Centralisation

Conclusion

Introduction

Last week’s post examined fiscal management in the Church, arguing that sound fiscal management ensures financial resources are available, protected, and strategically directed to promote pastoral fruitfulness. The inevitable question is which financial decisions should remain local, and which can be better coordinated centrally. Hence, today’s post examines subsidiarity-integrated centralisation and fiscal management in the Church.

As a recap, subsidiarity-integrated centralisation is a governance model in which the central authority coordinates matters of doctrine, liturgy, formation, and canonical oversight, while local ecclesial communities address matters that require contextual pastoral discernment. Fiscal management involves planning, directing, and controlling an organisation’s financial resources.

The Fiscal Dimension of Subsidiarity

The principle of subsidiarity has important implications for fiscal management. In general, a higher authority should not make financial decisions when a lower authority has more information and can make that decision. As noted previously, the question is not about financial centralisation or decentralisation. Instead, the focus is on determining which financial functions should be centralised for better coordination or to create a leverageable advantage, and which existing centralised functions should be decentralised to maximise pastoral fruitfulness.

The administrator acquires goods on behalf of the institution in accordance with canonical norms, diocesan policies, civil law, and local customs. However, in line with subsidiarity, the parish priest, rather than the bishop, largely decides how to raise funds for the parish. Similarly, a parish priest is better positioned than the diocesan curia to determine expenditures for pastoral activities.

However, some central coordination begins to take shape here, as the law requires a higher authority to be involved in acts of extraordinary administration. For instance, a parish priest or mission school principal must obtain written faculty from the local ordinary to place acts which exceed the limits and manner of ordinary administration. Not doing so invalidates the acts placed (Can. 1281 §1). The statutes define the acts which exceed the limit and manner of ordinary administration. When the statutes are silent, the diocesan bishop determines, after having heard the finance council (Can. 1281 §2).

The same applies to the alienation of ecclesiastical goods, which requires permission from the competent authority for the valid alienation of goods that constitute the stable patrimony of a public juridical person and whose value exceeds the sum defined by law (Can. 1291). This prevents transactions that can worsen the patrimonial condition of a juridical person. The Holy See’s permission is required for the valid alienation of goods whose value exceeds the maximum amount established by the episcopal conference, goods given to the Church by vow, or goods precious for artistic or historical reasons (Can. 1292 §2; 1277).

Centralised Financial Information

Reliable and timely financial information is important for ecclesial fiscal management. Diocesan financial data remain fragmented when parishes, schools, hospitals, and other institutions do not submit their financial accounts to the curia at least once a year. This situation makes it difficult for the diocesan bishop to have a comprehensive picture of the diocese’s finances and undermines his decision-making regarding the diocese’s overall well-being.

In doing so, the diocese identifies existing financial challenges, underutilised resources, and investment opportunities. It also helps allocate funds to areas where they are most needed, especially to support evangelisation and catechesis and to remunerate priests equitably. It also helps the diocese make realistic decisions about certain pastoral programmes and how much to allocate to them. For instance, as in many dioceses in Europe, some dioceses in Nigeria, for various reasons, no longer feed priests at some diocesan gatherings, thereby saving millions per annum, which is redirected to other pastoral initiatives.

Economies of Scale and Collective Procurement

One way to do this is through collective procurement of certain items because bulk purchasing reduces costs. Diocesan hospitals can aggregate requests for medical supplies and equipment rather than procuring them individually. The savings can be redirected to improve healthcare and reduce costs, in line with its holistic salvific mission.

Diocesan schools can collectively purchase educational materials, cutting down overall costs. Moreover, the diocesan press can print customised exercise books for diocesan schools, creating a large market that reduces costs and gives it a competitive advantage. The diocese can redirect the savings to develop its media sector and expand evangelisation and catechetical activities.

Equitable Distribution of Resources

Improving the equitable distribution of resources is one advantage of subsidiarity-integrated centralisation, especially in allocating resources for pastoral activities and the remuneration of priests. (cf. Can. 1274 §1).

First, because some parishes and schools have larger populations or are in more affluent locations, their income is much higher than that of those with smaller populations or in poorer areas. This reality enables them to do much more than other parishes. Yet souls remain to be saved across the diocese, regardless of location or economic condition.

Here, wealthier parishes or schools can provide financial support to poorer or smaller ones. Some have suggested twinning parishes; others suggest contributing to a pool. Canon 1274 §3 recommends establishing a common fund to help the bishop fulfill his obligations to non-clergy who serve the Church and to meet the various needs of the diocese, and serves as a framework through which richer parishes can assist poorer ones. Hence, some form of central coordination is necessary to do this effectively at the diocesan level. 

Second, clergy remuneration is inequitable because dioceses in Nigeria still operate a system similar to the benefice model, in which a priest’s remuneration depends almost exclusively on where he works, creating a winner-takes-all scenario. Everyone ordinarily wants to be assigned to a financially stable place because one’s income and overall well-being are directly connected to one’s place of pastoral assignment.

Canon 1274 §§1-2 recommends that dioceses establish a special institute to collect goods or offerings for the remuneration and social security of clerics, unless they provide for this in another way. Thus, some central coordination of priest remuneration can reduce internal rivalry and sycophancy among priests, promoting pastoral fruitfulness.

Financial Accountability and Transparency

Those entrusted with administering goods must give an account of how they exercised that responsibility in accordance with the law and for the purposes for which the goods were entrusted to the Church (Can. 1284).

Here, one distinguishes between accountability and control. The purpose is accountability rather than control. A parish, for instance, can be accountable for its financial administration without requiring the diocese to approve every expenditure. A diocesan hospital can be part of a centralised procurement arrangement while retaining decision-making authority over clinical and operational needs.

Consequently, the ordinary is to exercise vigilance over the administration of all ecclesiastical goods which belong to public juridical persons subject to him (Can. 1276 §1). The Dicastery for Legislative Texts insists that this vigilance is not meant to limit the autonomy of the institutions but to guarantee it, and to address possible conflicts of interest between the institutions and the administrators. The bishop can delegate others to do this.

Central Coordination and Investments

Because investment decisions require professional knowledge and expertise, subsidiarity-integrated centralisation is well suited to help institutions leverage centralised structures and financial management expertise to make sound choices aligned with the Church’s purpose. Central coordination also reduces service costs and provides oversight to ensure that the investment is opportune through vigilance and clear policies established by the ordinary. Hence, canon 1284 §2, 6° affirms that administrators of ecclesiastical goods, with the consent of the ordinary, can invest for the purpose of the juridical person the money which is left over after payment of expenses.  

This same central oversight is mentioned regarding money and movable goods endowed to an institution. Canon 1305 maintains that they are to be invested cautiously and usefully for the benefit of the foundation, according to the prudent judgement of the ordinary, after he has heard those concerned and his own finance council.

The Danger of Fiscal Centralisation

Moreover, bureaucratic delays and interventions can increase costs and increase reluctance to respond to pastoral priorities for fear of intervention from the centre. This undermines pastoral fruitfulness by creating a culture that prioritises meeting financial reporting requirements over advancing the Church’s mission.  

Hence, to avoid leverageable liability, as noted previously, any form of central coordination must integrate and practice subsidiarity, since structures exist for mission and not vice versa. In line with the Church’s teaching and praxis, authority must be exercised at the lowest competent level because the Church emphasises that “no matter that can properly be dealt with at a lower level should be taken to a higher one” (Dicastery for Promoting Christian Unity, The Bishop of Rome: Primacy and Synodality in the Ecumenical Dialogues and in the Responses to the Encyclical Ut Unum Sint, 2024, n.176).

Conclusion

Subsidiarity-integrated centralisation of fiscal management focuses on determining which financial functions should be centralised for better coordination or to create a leverageable advantage, and which existing centralised functions should be decentralised to maximise pastoral fruitfulness. This leverageable advantage can be a pathway towards self-sufficiency, helping the Church maintain its prophetic voice in society.

Next week examines subsidiarity-integrated centralisation and Catholic education.                

May God continue to help us🙏🏾

K’ọdị🙋🏾‍♂️