The Catholic Church, Resource Allocation and the Priest Shortage*

The economics literature, for all its richness and diversity, is peculiarly lacking in studies on organized religion. One reason may be that religious activity is not thought to follow the usual optimizing rules of economics. However, with religious organizations comprising a large portion of the nonprofit sector, it is important that researchers afford them an appropriate amount of attention. This study analyzes the U.S. Roman Catholic Church. One of the primary issues facing the U.S. Catholic Church in the latter third of this century has been the shortage of one of its major resources, priests. In 1966 the American Catholic Church had about 59,000 priests serving some 46 million Catholics, or an average of about one priest per every 780 parishioners. Since that time, there has been a significant decrease in the number of priests, and a corresponding increase in the number of U.S. Catholics. In 1990 there were approximately 53,000 priests to service 57 million U.S. Catholics, or an average of one priest for every 1,100 parishioners. The twin trends of an increasing number of Catholics and a decreasing number of priests is expected to continue into the next century. This shortfall in the number of priests has caused the U.S. Catholic Church to make some resource adjustments. One has been a search for some acceptable substitutes for U.S. priests. For example, there has been an increase in the use of foreign born extern priests serving U.S. Catholic dioceses. The church has revived the use of the permanent deaconate. Lay Catholics and religious sisters and brothers have assumed some of the functions that had previously been performed exclusively by priests. Some parishes are headed by women religious serving in the role of parish administrator, with priests available only on a rotating basis for a Sunday mass. In some parishes even this is not an option, and recently Catholic bishops approved guidelines for priestless liturgies. Another form of adjustment has been the closing of Catholic parishes. Often these are urban parishes, serving the poorest areas of a city. Priests are obviously among the primary resources utilized by the Catholic Church. Rightly or wrongly, it appears that the church employs its resources without a basic understanding of the resource allocation issues involved. Some grasp of the impacts of the various options to deal with the priest shortage, and yet maintain parish life, is imperative. This study views the Church as a nonprofit organization and empirically examines some of the options for dealing with the priest shortage. Specifically, it considers parish management schemes other than the traditional one of a parish headed by a resident pastor. To this end, a model is empirically estimated which relates measures of non-traditional parish management schemes to a measure of parish output. The analysis takes place at the diocesan level, where most resource allocation decisions are made. Viewed as nonprofit organizations, churches can be regarded as mutual benefit organizations, akin in many respects to a country club or labor union. The vast majority of their revenue comes from member donations. Only a small portion results from the sale of goods and services and virtually none comes from the government. Churches provide club goods, which are primarily available to members only.(1) These club goods can be divided into two categories, sacramental and nonsacramental. Sacramental functions include services and religious education, while nonsacramental activities include cultural opportunities, recreational pursuits, and youth programs. Churches also engage in philanthropic activities, contributing money, time and property to nonmembers. Biddle, studying both Protestant and Catholic churches, concluded that local churches spend 71% of their revenues on club-type activities, with 59% of the total spending going toward sacramental functions (1992, p. 104). He further estimated that clergy spend 68% of their time on sacramental activities (1992, p. …