MASSACHUSETTS
Boston Globe
By Thomas P. O'Neill III and Steven Krueger | August 10, 2005
''SUNLIGHT IS the best disinfectant" is a credo that has shaped public policy over the past century, primarily in the private sector and most recently with the passage of the Sarbanes-Oxley legislation. Following that trend, last year Congress held hearings to curb abuses in the charitable services sector. Ultimately, sunlight protects constituents of an organization from breaches of trust that will inevitably occur through human administration, from Enron to the Catholic Church. Legislation proposed by state Senator Marian Walsh of West Roxbury seeks to provide that sunlight, and, in the end, protection for donors of religious organizations.
The legislation would require tax-exempt religious organizations to meet the same reporting requirements, filed with the attorney general's office, as all other charitable organizations -- from the American Cancer Society to your local Little League. This change to the existing law does not increase the regulatory authority the attorney general currently has in protecting the legitimate interests of donors to religious organizations, and is, in effect, neutral in its treatment of them. Additionally, it would require that all nonprofit tax-exempt organizations disclose their real estate holdings. The legislation does not, however, regulate in any way the religious freedom of religious organizations.
The need for financial transparency in religious organizations is becoming apparent -- the financial crisis that the Catholic Church faces both in Massachusetts and nationwide is only the most recent example of questions connected to the temporal affairs of a religious institution. Over a decade ago, scandals connected to the misappropriation of funds brought down prominent tele-evangelists. More recently, the financial relationship between Islamic charities and terrorist networks were called into question.
As these examples demonstrate, the potential for financial mismanagement -- or worse - within religions is inherent to all religious institutions since they are -- after all -- human institutions in the exercise of their administrative affairs.
The financial crisis confronting the Catholic Church demonstrates the negative consequences of the current exemption for religious organizations. The clergy sexual abuse crisis shined a light on the ruinous consequences of secrecy. Catholics in the Archdiocese of Boston have curtailed giving to the Church because they feel they can no longer trust the institutional management and hierarchy. Moreover, in the past year, we have witnessed a questionable downsizing of parishes for financial reasons never disclosed and against the intent of generations of donors, as well as legitimate questions concerning the disposition of donations to the clergy retirement fund.