When the cardinals of the Roman Curia returned to their offices last September after the traditional summer recess, they were greeted by an unusual missive from Pope Francis. Dated September 16, the letter openly addressed the precarious financial situation of the Vatican and urged ”strategic decisions” to safeguard the future of the Church’s mission. What it outlined was a long-standing problem: when Jorge Mario Bergoglio was elected in 2013, the Vatican’s finances were already strained. His mandate was to reform the Curia and reintroduce fiscal discipline. A decade later, critics argue that little has changed beyond a few shuffled nameplates.
The Figures Behind the Crisis
The numbers paint a stark picture. Excluding two Vatican-run hospitals, the Holy See’s expenditures in 2023 reached €1.24 billion, outstripping revenues, which stood at just under €1.15 billion. These earnings, derived from real estate holdings, service fees, and donations, are increasingly reliant on tourism. Yet despite years of cost-cutting measures, the Vatican’s annual budget shortfall remains stubbornly high—between €50 million and €60 million, according to Maximino Caballero Ledo, head of the Secretariat for the Economy. The lack of publicly available financial reports since 2022, however, makes independent assessment difficult.
For the second year in a row, the Holy See posted an €83 million deficit—nearly four times higher than a decade ago. Reserves are vanishing, and asset sales are now propping up basic operations. The most alarming figure sits in the pension fund: a €1.4 billion hole, warned as "unmanageable" ten years ago. Since then, little has changed—except Pope Francis was warning his cardinals recently of “difficult decisions” ahead. The reckoning, long deferred, is no longer theoretical.
Two hospitals account for a significant share of the Vatican’s expenditures, according to its 2023 Consolidated Financial Statement. Without them, the Holy See’s core expenses stood at €434 million, with 34% allocated to salaries and 35% to administrative costs. The largest budgetary outlays were the Dicastery for Communication—which oversees Vatican News and L’Osservatore Romano—costing €44.8 million, and the Vatican’s diplomatic network (nunciatures, on which the Vatican spent €37 millions in 2023). The single largest expenditure, however, was €144.1 million, directed towards local churches and evangelisation efforts.
One of the Vatican’s traditional revenue streams is Peter’s Pence, originally intended to fund charitable projects. However, due to ongoing budget shortfalls, this global donation fund—supported by individual Catholics, dioceses, and religious orders—has increasingly been used to cover general expenses. In 2023, contributions to Peter’s Pence totaled €48.4 million, supplemented by €3.6 million in interest income. However, due to the deficit, total withdrawals from the fund reached €103 million. As a result, the Vatican had to draw €51 million from its reserves, which include real estate holdings, corporate investments, and other assets. Despite its original mission, only €13 million was spent on charitable projects in 2023.
A Decline in Funds
The Vatican’s financial woes are compounded by declining contributions. The United States remains the largest donor, contributing 28.1% of Peter’s Pence in 2023. Italy followed with 6.4%, while Brazil, Germany, and South Korea each accounted for roughly 3%. German contributions, historically significant, have plummeted to a record low of 2.7%, reflecting broader discontent within the German Church. Observers attribute the drop not only to post-pandemic economic pressures but also to ongoing financial mismanagement in Rome.
The Vatican’s failed investments have only exacerbated the crisis. The most notorious example was its foray into London real estate, where it purchased a property for €350 million, only to sell it at a €134 million loss. The fiasco led to a landmark trial in which, for the first time, a cardinal was convicted of fraud and embezzlement. Yet, despite his conviction, he has yet to serve his sentence, while the Italian intermediaries involved remain free pending appeal.
Structural Weaknesses
Beyond Peter’s Pence, the Vatican owns considerable real estate in Rome. Some properties are rented at below-market rates to Vatican employees, who, while exempt from Italian taxation, earn salaries below national averages. Cardinals themselves typically reside in Vatican-owned apartments, and Pope Francis has personally intervened to adjust their rental agreements. But such measures are far from sufficient to address the Vatican’s structural deficit.
Despite its own financial struggles, the Vatican wields influence over broader Church finances. The Curia must approve significant expenditures by dioceses and religious orders, and it exercises oversight over major Catholic charities. Caritas Internationalis, which coordinates 165 Catholic aid organisations worldwide, remains under Vatican supervision.
Spending priorities have also shifted under Pope Francis, aligning more closely with his social agenda. In recent years, significant funds have been directed toward climate initiatives and migration-related projects. One particularly controversial example was a €2 million contribution to Mediterranea, a sea rescue NGO led by Italian leftist activist Luca Casarini. The Italian Bishops' Conference was reportedly involved in the funding, and later became subject of a criminal investigation. Authorities accused Mediterranea of aiding illegal immigration and violating maritime law—much to the Vatican’s embarrassment, particularly since Casarini was invited to participate in the Pope’s Synod on Synodality.
A Familiar Predicament
This is not the first time the Vatican has faced financial turmoil. In the 1940s, Pope Pius XII turned to the United States for aid when the Church’s reserves—originally derived from a one-time payout by the Italian state upon the establishment of Vatican City—were depleted. At the time, the Church’s staunch anti-communism made it an attractive recipient of American funds. More recently, private philanthropic foundations have stepped in, though their influence has sparked criticism, with some arguing that the Church’s resulting financial dependency has led to compromises in its teaching, particularly on moral and social issues.
As the Vatican grapples with how to cut excess spending—particularly on media and public relations—while stabilising revenue, a deeper concern looms: the Holy See’s financial sovereignty. With dwindling internal resources, the risk of reliance on external benefactors with their own agendas grows. As speculation mounts over the next papal conclave, one issue is clear: concerning the Church’s future, the matter of its financial independence will be just as critical as any doctrinal or pastoral debate.
Statement
The Vatican’s finances are in crisis. Despite millions in global donations, mismanagement, real estate blunders, and mounting bureaucratic costs have drained its reserves. While funds flow into media, diplomacy, and left-wing activism—such as migrant rescue operations—charitable spending dwindles. With US donations declining and scandals piling up, the Holy See risks financial dependence on external benefactors with their own agendas. The next Pope will inherit more than a spiritual burden—he will have to secure the Vatican’s financial sovereignty or risk its autonomy in a world eager to shape its future.