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The great reformation: Pope Francis' push to clean up church finances

Alexis Christoforous

Excitement is building for Pope Francis’ inaugural visit to America. As interest in his trip grows ahead of his arrival, we decided to take a closer look at the sweeping financial reforms he has attempted to put in place.

He may be the "Pope of the Poor," but Pope Francis is also an elite manager who is working to reform the Vatican’s troubled finances.

Fortune Magazine’s Editor-at-Large, Shawn Tully, says Pope Francis is much more hands-on than any previous pope in his managerial style, “He’s a very pragmatic manager. The Vatican has had big deficits for a long time and a lot of the money that was supposed to be earmarked for charity has gone for operating expenses. He wants to make sure that never happens again.”

Tully says to serve his higher calling as a pope of the people, Francis knows he must keep one eye on the bottom line.

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After spending two weeks in Rome last year, researching and writing about how the Pope is trying to create a leaner, more efficient Vatican, Tully found that the 266th Pope has cut overtime and shrunk the size of the Vatican bureaucracy. He also created the Vatican equivalent of the Securities and Exchange Commission. “He wants to make sure that all the controls are in place,” Tully says, “to make sure that there’s no money laundering and to root out the corruption that’s tarnished the reputation of the Vatican.”

As CEO of the Vatican, Pope Francis is responsible for the world’s smallest country. This independent city-state employs about a thousand people, operates its own mint and post office, and is just 110 acres (about one-eighth the size of New York’s Central Park where Pope Francis will greet throngs of Americans next week).

Pope Francis will visit Cuba on September 19 to 22 as part of a tour that will also take him to the United States (AFP Photo/Filippo Monteforte)

While popular perception is that the Vatican possesses great wealth, Tully says if it were a company, its revenue wouldn’t even come close to making the Fortune 500 list. He points out that the Vatican’s most valuable assets—its artwork – are virtually priceless and not for sale.

The Holy See holds about $920 million in stocks, bonds and gold and over a billion dollars in real estate holdings, but Tully says that’s not where most of its operating budget comes from. He found that “wealthy Americans are funding a tremendous amount (about a third) of the Vatican’s operating budget.”

But big-time donors shouldn’t expect any special treatment. Unlike previous popes, Francis “will not meet or have audiences with rich people,” Tully explains. “But fortunately, because of the improved image Pope Francis has brought to the church, private foundations have been able to raise more money.”