Second-guessing church charity

A federal court is considering a lawsuit about how the Roman Catholic Church uses the charitable donations it receives. While the latest round of arguments in the case were technical—about when an appeal can be filed—the underlying issue is not. It goes to the heart of religious liberty and American church-state law.

The lawsuit grows out of a worldwide collection that Roman Catholic churches have taken on behalf of the Vatican for hundreds of years—Peter’s Pence. This donation goes specifically to the papacy. Local bodies of the Roman Catholic Church cooperate in collecting Peter’s Pence but do not control the Vatican’s use of the donations.

David O’Connell is a parishioner from Rhode Island. He says that he was misled about how Peter’s Pence would be used when he donated in 2018. He alleges that, rather than going directly to the needy, much of what he gave was put into investments for the Vatican. So, in 2020 O’Connell filed a lawsuit arguing that the offering is not part of the “charitable works of Pope Francis” and is not a “witness to charity” in the Catholic Church. And O’Connell seeks to bring the suit, not just for himself, but as a class action—on behalf of all individuals in America who donated to the Peter’s Pence collection and were dissatisfied with how the Vatican spent the money. (The suit is brought against the Conference of Catholic Bishops, though it was the Vatican, not the bishops, that received the money.)

This lawsuit is a sweeping request for federal courts to second-guess church decisions about what counts as charitable uses of funds. Regardless of one’s views about the Vatican, the suit is worth watching for anyone who cares about religious liberty in America.

Churches collect donations for all kinds of purposes. There are numerous ways that they uncontroversially spend the money that has been donated. It might go to help people in need, aiding those who could not afford food or shelter or medical care. Or it may go to education in many different forms—from education about the faith, to vocational instruction for those seeking to improve their lives, to language instruction for immigrants seeking to settle in a new place. It might go to the expenses for the church’s operations—building utilities and maintenance, staff salaries, musical instruments for use in worship services. And so on. Of course, it would be a problem if a church leader started lying about how money was used (for instance, claiming donations would go for education but in fact taking them for personal use). But short of this kind of misrepresentation, churches have the ability to decide how they use their funds.

To be sure, there is room for Christians to debate how donations should be used and when long-term savings or investments are sensible ways for a church to direct its donations. But it’s certainly not outside the realm of possibility that some churches might see wisdom in having investments that grow and provide long-term support and funding for church operations. Even when some uses of funds might be unwise, it should not be the role of the courts to tell churches how to use the money. If a church decides to spend some donations to replace the carpet in the foyer, rather than keeping the old carpet and spending the money on the soup kitchen, that’s a decision for the church. It may or may not be wise. But it’s a decision for the church, not the courts. There’s not enough information to know precisely how the Vatican sees its use of the funds. But the real question here is whether this is a question that courts ought to answer.

Normally, American courts stay out of church decisions about the church’s own internal affairs. The First Amendment requires as much. Can a court tell a church that its offering needs to be returned because of how it has been used? The answer is almost always no—again, because this would require courts to interfere with the church’s ability to run its own affairs.

That is why the First Amendment’s religion clauses have long been understood by the courts to establish a domain of “church autonomy.” If courts were to tell churches how to run their internal affairs, they would violate both of the First Amendment’s religion clauses. They would be interfering with the religious exercise of the religious community, in violation of the Free Exercise Clause. And they would be establishing the standards by which the church must operate as a matter of legal precedent, violating the Establishment Clause.

The case against the Conference of Catholic Bishops is still at an early stage. Right now, the D.C. Circuit Court of Appeals has the opportunity to stop the case before it goes further. Doing so would prevent judicial intrusion on a classic matter of internal church governance. Whether it does so is entangled in some technical questions about when early appeals are available. (I filed a brief supporting the bishops on this issue.)

The technical issues should not obscure the main point: It would be a bad day for religious liberty if courts start second-guessing routine church decisions about how to spend donations. One can hope that the federal courts in D.C. will recognize this point—and sooner rather than later.