This Pope Means Business

5/24/2016
ThisPopemeansbusinessFortune
FUSES,
FUSIBLES
All type of electric fuses Todo tipo de fusibles electricos
FEATURES
VATICAN
This pope means business

by Shawn Tully
AUGUST 14, 2014, 7:00 AM EDT
Pope Francis kisses a child as he arrives to a meeting with altar workers in St Peter's square at the Vatican on August 5, 2014.
Photograph by Stefano Rellandini Reuters
The wildly popular Francis is more than a pontiff of the people. Hes an elite
manager whos reforming the Vaticans troubled finances.
http://fortune.com/2014/08/14/thispopemeansbusiness/
1/15
5/24/2016
The new pope wanted to talk about money. That was the message that went out to a group of seven prominent financiers
major Catholics allfrom around the world in the summer of 2013. Barely five months after the shocking resignation of
Pope Benedict XVI, Pope Francis had summoned them to assemble at the seat of holy power, the Vatican. They knew their
general assignment: to create a plan to restructure the Vaticans scandalplagued finances. And like Catholics everywhere,
they knew that Francis had already signaled that he was a new kind of pontiff, a peoples pope who championed charity
and tolerance over dogma. Still, they didnt know what to expect when they arrived at the Vatican for a meeting with the
pope on the first Saturday in August. How interested was he in finance, really? And how serious was he about changing
business as usual inside the Vatican?
MAKATI MEETING
ROOMS
ph.ceosuite.com/meeting-conferen
800 per hour for Meeting Rooms

along Ayala Ave. up to 30pax
A major hint came from a change in tradition upon their arrival: The visitors didnt report to the Apostolic Palace, the
Renaissance showplace where for centuries past popes had received visitors in high style. Instead they entered Vatican City
on the other side of the colonnade of St. Peters Square and took a 150yard stroll through the hilly enclave to the new popes
place of businessCasa Santa Marta, a fivestory limestone guesthouse that could be mistaken for a newish hotel. There they
were ushered into a nondescript meeting room on the first floor with no paintings or religious ornaments and took their
seats around a conference table. The membersincluding JeanBaptiste de Franssu, exchief of assetmanagement giant
Invesco in Europe Jochen Messemer, a top executive at ERGO, a large German insurer and George Yeo, former foreign
minister of Singaporechatted nervously as they waited.
After 15 minutes, Pope Francis entered the roomand got right down to business. Attired in a simple white cassock and
plain metal cross, he took his place standing at the head of the table. With little preamble, he began outlining his strategic
vision, in an approach described by one participant as highly managerial. Speaking in fluent Italian and taking frequent
pauses while a translator repeated his words in English, the pope explained to the group that for his spiritual message to be
credible, the Vaticans finances must be credible as well. After centuries of secrecy and intrigue, it was time to open the
books to the faithful. Strict rules and protocols must be adopted to end the cycle of scandals that had plagued the Vatican in
recent years.
2/15
5/24/2016
An aerial view of St. Peters Square in the Vatican, a sovereign nation ruled by the Pope and located on 110 acres in the heart of Rome
PHOTOGRAPH BY MASSIMO SESTINI/POLIZIA DI STATOREUTERS
Francis declared that sound financial management was a pillar of his greatest mission: aiding the poor and underprivileged.
That mission was endangered by volatile, unpredictable budgets that careened from modest surpluses to steep deficits. The
Vaticans inept practices had inhibited giving, he explained, and had to stop. When the administration is fat, its unhealthy,
he said. Francis wanted a leaner, more efficient Vatican administration that would be solidly selfsustaining. That, he said,
would free up more money for his charities. You are the experts, the pope said, and I trust you. Now I want solutions to
these problems, and I want them as soon as possible. With that, Francis left the group to figure out the details.
There was no ambiguity about the job ahead. The Holy Fathers message was crystal clear: Let us make money to go to the
poor, recalls Joseph Zahra, chief of the panel, a pontifical commission known by its acronym, COSEA. Zahra, a former
chairman of the Bank of Valletta, Maltas largest bank, says of Francis: In finances, hes not a micromanager but an
inspirational leader.
As the spiritual shepherd of the worlds 1.2 billion Roman Catholics, Pope Francis, 77, has already done more in 18 months
to energize the church and burnish its image than anyone has since the heyday of John Paul II in the mid1980s. Whats far
less appreciated is his intense engagementand astounding successin overhauling the Vaticans finances and pushing the
adoption of modern practices it had resisted for decades. The changes are massive, says Ren Brlhart, chief of the AIF, the
Vatican equivalent of the Securities and Exchange Commission. Now a clear game plan has been put in place, and were
really part of the international community.
The past 15 years have been a time of turmoil and decline for the church. It has suffered blow after blow to its image, from
the pedophilia scandals that have plagued it for over a decade to the recent Vatileaks affair, in which Pope Benedicts butler
smuggled letters to the press that warned the pontiff of corruption and cronyism in the Vatican. The church has often
promoted issues that tended to divide Catholics more than unite them. And the backlash made Rome look defensive, as
many bishops and cardinals viewed their role as defending Catholic doctrines against a hostile culture of secularism.
Before Franciss arrival, attendance at mass was declining and the recruitment of priests and nuns had plateaued. The
difficulties extended to fundraising. The church was underperforming for years in raising money, and it started with the
pedophilia scandals, says Kerry Robinson, executive director of the National Leadership Roundtable on Church
3/15
5/24/2016
pedophilia scandals, says Kerry Robinson, executiveThisPopemeansbusinessFortune

director of the National Leadership Roundtable on Church
Management, an organization that advises parishes and dioceses on financial management.
By contrast, Franciss upbeat, quotable approach and emphasis on charity over doctrine have quickly made him perhaps the
most talkedabout and admired person on the planet. (Fortune named him No. 1 on its Worlds Greatest Leaders list earlier
this year.) His famous Who am I to judge? declaration on homosexuality distanced him from Benedicts severe criticism of
gays. Francis could be called the first modern pope. His Twitter account, @Pontifex, boasts 4.3 million followers in nine
languages. And his message is universally appealing: The paramount duty of the church and its faithful is to aid those in
need.
Although its too early to make a definitive judgment, the Francis effect appears to be reversing the churchs fortunes. Mass
attendance is surging in Italy, for instance. The Jesuits, Franciss religious order, are seeing more inquiries about priestly
vocations. And donations are on the rise at dioceses around the world.
Francis, kissing an ailing child during a church visit in Rome

in March, is seen as a peoples pope.
PHOTOGRAPH BY STEFANO RELLANDINIREUTERS
What has been less appreciated by outsiders until now is the popes elite managerial skill set. Like a great CEO, he has the
ability to set a strategic vision, then choose and motivate the right people to make it work. His rapid overhaul of the
Vaticans finances is both one of the most unusual case studies in the annals of business and one of
the more instructive.
Francis was elected with a mandate for reform. After Pope Benedict, on Feb. 28, 2013, became the first pontiff in six
4/15
5/24/2016
Francis was elected with a mandate for reform. After Pope Benedict, on Feb. 28, 2013, became the first pontiff in six
centuries to resign, the 115 cardinals who assembled to pick his successor held eight days of meetings, or general
congregations, to discuss the priorities for the next pontiff. Benedict had been considered a brilliant theologian, but he was
no manager. Cardinal after cardinal expressed outrage over reports of the overpriced, nobid contracts handed to officials
friends in Italy and the criticism of the Vatican banks disclosure policies by the Italian government. The feeling was that the
next pope should be someone with the leadership skills to bring professional management to a clubby bureaucracy that was
expert in blocking change.
As an outsider who had expressed contempt for the Vaticans status as an insular royal court, Jorge Mario Cardinal
Bergoglio, then archbishop of Buenos Aires and a native of Argentina, was the overwhelming choice. Pope Francisthe first
pontiff to take the name of Saint Francis of Assisi, patron saint of the poorcame in with a plan. His central idea was
revolutionary: Money matters are not a core competency of the clergy, as the record shows. So he began replacing the old
guard of cardinals and bishops with lay experts who are now largely setting strategy, heading regulatory oversight, and
running daytoday operations.
Indeed, Francis has brought in some of the biggest brand names in the world of business. KPMG is implementing uniform,
internationally accepted accounting standards to replace the Vaticans previous crazy quilt of bookkeeping. EY (the former
Ernst & Young) is scrutinizing management of the Vaticans stores, utilities, and other municipal services. Deloitte & Touche
now audits the accounts at the Vatican bank. And Spencer Stuart has recruited top management talent from around the
globe. Heading the effort to restructure media operations, assisted by McKinsey & Co., is Lord Christopher Patten, a former
head of the BBC and the last British governor of Hong Kong.
When Pope Francis puts a cardinal in charge of something, the choice is typically an outsider. His most important
appointment so far, either lay or religious, is Cardinal George Pell, an Australian whom he recruited from the archdiocese of
Sydney. Pell now heads the newly formed Secretariat for the Economy, and Pope Francis has granted Pell power over
finances that no official has remotely held before. Hes responsible for setting and enforcing all budgets and managing all
investments. The son of a heavyweight boxer, Pell, 73, is an imposing figure who is short on niceties and brutally frank about
the necessity to radically pare costs.
5/15
5/24/2016
Cardinal George Pell (center), with new Vatican bank president Jean-Baptiste du Franssu (left) and outgoing president Ernst von Freyberg, is the popes chief of
economic affairs.
PHOTOGRAPH BY TONY GENTILEREUTERS
Pope Francis has a complex but pragmatic view of money. Money is useful to carry out many things, for works to support
humanity, he has said. But when your heart is attached to it, it destroys you. His humble lifestyle follows those precepts.
He resides in a onebedroom, secondfloor suite in Casa Santa Marta overlooking the entrance. (Benedict, the former pope,
lives nearby in a converted monastery called Mater Ecclesiae and occasionally sends Francis notes with feedback on his
interviews.) Visitors say the popes lights go on at 4:30 a.m. Hes frequently spotted in the buffet line, tray in hand, at the
Santa Marta dining room, where the cuisine isnt fancyit offers a choice of two main courses for lunch and dinner, and
features Italian specialties such as pasta con pomodoro and pollo arrosto. He takes no holidays, explaining that if the poor
cant take vacations, why should he?
The pontiff does not talk about balance sheets and cash flow. He leaves the numbers to the experts. His forte is leadership.
Like any good chief executive, he knows that the culture of an organization is established at the top. And he is always well
prepared. He has five or six sources of information on every subject, says Austen Ivereigh, author of a forthcoming
biography of Francis, The Great Reformer. Its impossible to hoodwink him. By getting the views of many participants
both Vatican officials and lay advisersin all of his reform initiatives, the pope quickly determines if his instructions are
being implemented or blocked by the old guard. If he sees resistance from oldschool directors, hell quickly make changes,
as when he replaced the entire board of the AIF, the financial regulator.
One of his rules is that big donors and companies that do business with the church should get no special treatment. Before
he took charge in Buenos Aires, the archdiocese was a large shareholder in Argentine banks, and the banks regularly granted
their ecclesiastical investor loans on easy terms. As cardinal, Francis denounced the arrangement as a blatant conflict of
interest and sold all the archdioceses bank holdings. He also refused to attend fundraising dinners, usually regarded as one
of a cardinals top jobs. His aversion to catering to the wealthy didnt stop with his ascension to the papacy. Its a Vatican
tradition that the Secretariat of State, which receives donations from the rich on the pontiffs behalf, would reward big
donors by arranging special audiences and masses with the pope. Pope Francis ended the practice.
Pope Francis is a strong believer in workers rights. But that view is highly nuanced. He has famously denounced the
excesses of capitalism and firmly believes that the rich get too much from the market economy while regular workers often
dont receive enough. In contrast to his readiness to ax highranking officials who block his agenda, he doesnt believe in
firing rankandfile employees. But he despises waste and inefficiency, and he thinks the Vatican can run better with fewer
employees.
The catholic church is highly decentralized financially. In terms of money, the Vatican basically stands on its own. Thats a
major reason its finances are far shakier and its wealth is much more modest than its image of sumptuous wealth. The
church is divided into three branches: the Vatican, the religious orders, and the dioceses. Each maintains separate finances.
In fact, the Vatican has no official claim on or access to the wealth of the two branches that it oversees. The members of the
296 religious orders and congregations are priests, nuns, and brothers who specialize in education (the Jesuits), missionary
6/15
5/24/2016
work (the Missionary Sisters of the Sacred Heart of Jesus), and helping the poor (Franciscans). Frequently, regional units
within the orders control their own finances.
The dioceses are where the Catholic Church meets Main Street. The more than 2,800 dioceses, each headed by a bishop or
an archbishop, supervise the networks of parishes from Lagos to Manila to Detroit where Catholics attend mass, get
married, and send their children to the 95,000 elementary schools. Each diocese is a separate corporation with its own
investments and budgets, including the metropolitan archdioceses. The dioceses do send substantial amounts of money to
the Vatican each year, but most of it is earmarked for either missionary work or the popes charitable giving. The funds sent
to support the Vaticans operations are important but account for around 4.5% of total revenues.
Since the church contributes only modestly to funding its operations, the Vatican must generate substantial income on its
own and supplement that income with a steady flow of donations from the faithful. The Vatican serves two functions. First,
it is a fully sovereign, independent nation with its own laws, courts, stores, security force of gendarmes, and an army of 110
ceremonial Swiss guards. Cloistered behind 40foot stone walls in the heart of Rome, the Vatican is the smallest nation on
the planet. It occupies just 110 acresor oneeighth the size of Manhattans Central Parkand is home to just 837 citizens.
The Vatican has no legislature the pope, the worlds last absolute monarch, can unilaterally announce new laws, create or
eliminate departments, and hire and fire as he pleases. Any money the Vatican generates in excess of its expenses can be
used at the discretion of its ruler, the pope.
The Vaticans second and principal function is its role as the hierarchy of the church. The pope heads a large bureaucracy
called the curia, which exercises a wide range of power and provides advice and assistance to the church at large. The curias
most powerful bodies are nine congregations, each headed by a cardinal, that resemble the U.S. governments cabinet
departments. One congregation, for instance, appoints the worlds almost 3,000 bishops. Another does the detective work
needed to name new saints.
THE CHURCHS THREE PILLARS

Through the pope the Vatican establishes and enforces doctrine for all parts of the Catholic Church. But the other branchesthe dioceses and religious orders
are financially independent. Each contributes money to the Vaticans budget.
For financial purposes, the Vatican operates two quasiindependent entities, one for each of its two functions: operating as a
nation and serving as the sprawling staff that supports the pope. The city state, or governorate, operates the Vaticans
commercial services. It resembles a mediumsize municipal government. The city state has excellent sources of revenue. It
7/15
5/24/2016
commercial services. It resembles a mediumsize municipal
government. The city state has excellent sources of revenue. It
garners about $130 million a year, and rising, from the thriving Vatican museums, home of Michelangelos Sistine Chapel.
And each year tourists purchase around 2.2 million eurodenominated collector coins at its gift shops.
Last year the city state spent around $332 million and collected $377 million, for a profit of $45 million. It posts
substantial surpluses most years. But that money usually isnt available to fund the struggling part of the Vatican. The
governorate frequently uses its excess cash to bolster the underfunded pension plan and needs to accumulate reserves to
expand the museum and refurbish buildings.
The problem resides in the curia, officially known as the Holy See. The Holy See consists of many sections that spend heavily
but offer little or no income. Vatican Radio, which broadcasts the popes readings and masses, as well as the Vaticans news,
has 330 employees and spends $37 million a year yet collects less than $1 million in advertising. Its deficit is so deep that the
city state now covers half the shortfall. Operating the embassies, called apostolic nunciatures, in 113 nations runs over $30
million.
Almost twothirds of the Holy Sees budget goes to paying salaries, benefits, and pensions for its 2,886 employees. (Including
the city state, the Vatican has a workforce of 4,822.) The Vatican pays relatively low wages but offers generous health and
retirement benefits. Cardinals and bishops at the congregations and councils often toil for as little as $46,000 a year, though
their housing is heavily subsidized. The rank and file, including nuns and priests, are also paid below market, but make it up
in benefits. The average salary for lower to midlevel workers is around $28,000 a year. Thats about 25% less than the
$37,800 average for Italian workers with similar private sector jobs. But keep in mind that Vatican employees pay no
income taxes. Today around threequarters of the Vaticans employees are lay workers, vs. less than half 25 years ago.
Vatican lay employees have jobs for life, and virtually no one leaves before retirement age.
For 2013 the Holy See posted revenues of $315 million and expenses of $348 million, for a $33 million deficit. Since 2007
the total shortfalls have totaled $56 million. Those figures actually understate the size of the Holy Sees financial problems.
The current spending number is due to rise sharply for a pressing need: taming big pension liabilities. Its a problem the
Vatican shares with virtually every Western economy. The Vatican inaugurated a generous definedbenefit pension plan in
the early 1960s but didnt have an actual pension fund until three decades later.
THE VATICANS ASSETS
8/15
5/24/2016
Partial view of the Sistine Chapel fresco by Michelangelo.

PHOTOGRAPH BY STEFANO RELLANDINIREUTERS
The Vatican is often assumed to possess great wealth, but if it were a company, its revenue wouldnt come close to making
Fortune 500. Its total operating budget is about $700 million. in 2013 it posted a small overall surplus of $11.5 million. The
Vaticans most valuable assetssome of the worlds great art treasuresare virtually priceless and not for sale. A breakdown
of major holdings:
Investments: Portfolio of stocks, bonds, and gold worth $920 million.
Real estate: Holdings have an estimated value of $1.35 billion, including some 2,000 apartments, mostly in Rome.
Vatican Bank: Book value of $972 million.
Art collection: Worth untold billions. The Vaticans museum brings in $130 million a year in revenue. Treasures include the
Sistine Chapel frescoes by Michelangelo (above) Saint Jerome in the Wilderness, a painting by Leonardo da Vinci
Deposition From the Cross, a painting by Caravaggio a letter from Marie Antoinette en route to the guillotine and the
papal bull excommunicating Martin Luther.
The popes strategy for addressing both spending and pension issues is to gradually shrink the Vatican workforce through
attrition and raise more money to maintain the benefits. In February of 2014 he imposed a hiring freeze and also stopped
formerly generous overtime payments. The plan is to move existing employees from overstaffed congregations to growth
areas, such as financial management, without replacing those who depart.
The Vaticans pension plan guarantees retirees 80% of their final salaries after 40 years of service, and as noted, few
employees leave before retirement. Thats a big premium over the replacement rate in Italy of around 72%. But Pope
Francis is explicit about providing better pensions than those in Italy. The challenge is filling the huge shortfall in the
pension fund. The Vatican is guaranteeing some 1,750 retireesplus current workers who have paid into the fixedbenefit
plan for yearsbig pensions for decades to come. Right now those future payments far exceed the amount the current fund
can possibly generate in income.
According to a Vatican insider, the pension fund is short by a few hundred million dollars. The Vatican has been making
minimal contributions to the fund for years, and employees kick in just 6% of their salaries. Cardinal Pell says that
retirement benefits are safe for now but that the Vatican needs to heavily restock its pension reserves in the years to come.
The Vatican could be obligated to contribute another $30 million or $40 million a year for a decade or more to build a fund
large enough to pay future pensions from its investment returns.
The other major problem facing the Holy See is that its revenues from investmentsalmost half of its totalare
unpredictable, and returns are far lower than they should be. The Holy See does own one reliable source of profits, the
Vatican bank, or IOR. The IOR (for, in Italian, Institute for Religious Works) regularly provides around $70 million toward
operating revenues. Perhaps the most surprising feature of the Vaticans finances is the extremely modest size of its portfolio
of stocks, bonds, and real estate. The seed money for the Vaticans investments came from a $92 million settlement the
Italian government provided in 1929, in compensation for its confiscation of the Papal States, covering much of central Italy,
60 years earlier.
9/15
5/24/2016
Today the Vatican holds some $920 million in stocks, bonds, and gold. Its gold reserves, on deposit at the U.S. Federal
Reserve, now amount to just $50 million. The Vatican usually earns between $15 million and $25 million on its holdings,
much of it stashed in moneymarket accounts and shortterm government bonds. It also generates low returns on its
extensive holdings of real estate, valued on the books at around $1.35 billion. Its principal holding consists of some 2,000
apartments, which are mostly in excellent locations in Rome, including the historic districts surrounding the Vatican and the
bohemianchic neighborhood of Trastevere.
Most of the units, however, are rented to bishops, priests, and lay employees who pay minimal rent. For example, a
prominent cardinal and other clergy pay token rent on a building with some 20 apartments on the tony Via Carducci. It
would generate over $1 million a year on the open market. Over the past several years the real estate portfolio has returned
an average of about $33 million a year.
Catholic foundations around the world actually pay a larger share of the Vaticans operating budget than do its investments
in real estate and securities. This giving is a crucial, unreported bulwark of the Vaticans finances. Last year, by Fortunes
estimate, foundations donated more than $85 million toward the Holy See. The bounty comes from dozens upon dozens of
charities, most of which pledge relatively small amounts. For example, the Legatus organization, a group of prominent
Catholic business executives, pledges 10% of its annual dues to the pope, amounting to $500,000 a year.
To turn the vatican into a consistent profitmaker, the new regime is counting on two institutions with the potential for big
growth in earnings: the museums and the Vatican bank. Those are the two main income sources for the future, says Zahra,
the Maltese adviser to the Vatican.
The museums are the only branch of the Vatican run like a true business. This year the museum is on track to host 5.5
million visitors, or three times the figure 30 years ago. It now ranks as the worlds fifthmostvisited museum, behind only
the likes of the Louvre and the British Museum. Traffic this year has risen by 1 million visitors from 2013, largely because of
the Francis effect. The Vatican museum famously boasts one of the worlds greatest collections, from its frescoes by Raphael
to da Vincis painting Saint Jerome in the Wilderness to the ultimate trophy attraction, the Sistine Chapel. Cardinal Pell
and the reformers want the Vatican to exploit its hidden treasures for additional profit. The goal is to use promotional
campaigns and new exhibitions to push museum revenues far above the current $130 million a year.
The Vatican bank is also a potential growth franchise. The IOR resembles a holy savings and loan. The basic purpose of the
IOR is simple, and essential. The wealthy dioceses, religious orders, and Catholic charities collect huge sums each year
destined for the developing world and deposit the funds in the Vatican bank. That money frequently comes in cash. The
Vatican bank wires the funds to all corners of the developing world to build churches and schools, run hospitals, and pay
priests and nuns. Its also the everyday bank for Vatican employees. It has a single branch with eight teller desks, situated in
a medieval Gothic prison built by Pope Nicholas V. Its ATMs, all in Vatican City, provide instructions in Latin. The banks
basic business is highly profitable. Last year the IOR paid around 1% interest on its $3.1 billion in deposits and invested that
money in government bonds at over 3.3%. That model generated spread income of over $70 million.
Despite its simple mission, the Vatican bank has in the past found itself ensnared in scandal. Perhaps the most decisive
transformation under Pope Francis is the remaking of the IOR from a near wreck to the useful institution it should be.
Today it is central to the Vaticans plans for financial growth.
The Vatican banks recent troubles started in 2009. As an offshore bank outside the European Union, the IOR had no rules
or protocols for combating money laundering. The Vatican was already using the euro but couldnt sell large quantities of its
10/15
5/24/2016
or protocols for combating money laundering. The Vatican was already using the euro but couldnt sell large quantities of its
own euro collectors coins, a potential source of revenue. So that year the Vatican signed a special monetary agreement with
the EU that allowed it to offer those special coins in its gift shops. In return the Vatican agreed to follow the EUs strict
policies on money laundering and financing of terrorism.
But the Vatican bank management was unprepared and unwilling to make the changes necessary to comply. Under Italian
law, the IOR was not required to notify authorities of the identity of clients who transferred money to accounts in Italy. The
system was ripe for abuse, and abused it was. When the authorities asked IOR officials to identify senders of money, the
typical response was, Our laws dont require us to tell you. The old guard in the bank adamantly opposed lifting the veil.
But the Bank of Italy started pressuring correspondent banks in Italy to cease dealing with the IOR. In March 2012, J.P.
Morgan Chase cut off business with the Vatican bank in Italy, and then worldwide. Nine months later the Bank of Italy
declared that the IOR was failing to comply with international antimoneylaundering laws
and forced all banks in Italy to close their IOR accounts.
By early 2013 the IOR was on the verge of collapse.
Francis empowered two key officials to clean up the mess. The first was Brlhart, the head of the AIF. A Swiss lawyer who
had previously headed an antimoneylaundering initiative in Liechtenstein, Brlhart is an uncommonly glamorous figure in
the Vatican hierarchy. Nicknamed the Vaticans James Bond, Brlhart, 42, sports a perfectly groomed blackstubble beard
and beautifully tailored threepiece suits. Brlharts group, the AIF, was charged with both monitoring the IOR for
suspicious transactions and making the Vatican comply with all EU and other multinational regulations.
Brlhart at first faced stiff resistance from the powerful Secretariat of State. The secretariat had the authority to veto any
agreement for exchanging information with a foreign government. Those covenants were crucial to Brlharts efforts. Last
December, Francis canceled that authority, giving Brlhart free rein. Then, in June, the pope fired and replaced the AIFs
entire board.
The second key reformer was Ernst von Freyberg, who was named head of the IOR in its darkest days in early 2013 by Pope
Benedictand started the day the pope officially resigned. Von Freyberg hired Promontory Financial Group, a compliance
and auditing firm based in Washington, D.C., to review every one of the banks then 19,000 accounts. He ended up
shuttering 755 accounts held by outsiders, containing over $250 million. He also published two extremely thorough annual
reports, the first publicly released financial statements in the IORs history. Von Freyberg resigned in July to return to his
11/15
5/24/2016
reports, the first publicly released financial statements in the IORs history. Von Freyberg resigned in July to return to his
family shipping business, but his achievements are respected by bankers worldwide.
Cardinal Pell has original ideas on how the IOR can generate more revenue. And get this: The Vatican is now in the
institutional moneymanagement business. With the popes blessing, Pell is gathering all Vatican investments into a newly
created unit called Vatican Asset Management, or VAM. Its headed by de Franssu, the former mutual fund executive whom
Francis has named to head the IOR.
Pell and de Franssu figure that dioceses and religious orders, especially in poor countries, sorely need professional money
management and will relish entrusting their nest eggs to VAM. The plan is for VAM to distinguish itself as a specialist in so
called ethical investing, which will align with the churchs values and those of its clients. As VAM gathers in billions in assets
to manage, it should throw off millions in annual fees. The future of the IOR is asset management, declares Pell.
Pell meets with Pope Francis once every two weeks at Casa Santa Marta to brief him on the progress being made by their
handpicked team of financial experts. He describes the pope as a good example of the oldstyle Jesuit who knows which
way is up and asks the right questions. To serve his higher calling as a pope of the people, Francis knows, he must continue
to keep one eye on the bottom line.
Additional reporting by Anna Artymiak

This story is from the September 1, 2014 issue of Fortune.
AROUND THE WEB
SponsoredLinksby
The Festival of Pigs

(LifetimeAsia)
Rooftop Pasta Party with

RAGU
(SelfishMom)
6 Comments
The Fairest of Them All
Detection of the world giants
(NewDigital&InteractiveEntertainment
ProductsFotoMaster)
(Chuynlink)
Licensing
Subscribe to The Term Sheet and get updates on Finance and more!
Enter your email address
Subscribe
12/15
5/24/2016
See all newsletters
FINANCE
HOUSING
Why Youll Probably Have to Move

Back in With Mom and Dad
by Chris Matthews
@crobmatthews
MAY 24, 2016, 11:02 AM EDT
Photograph by Ken Ilio Getty Images/Flickr Select
According to new research from Pew

For the first time since 1880, more Americans aged 18 to 34 are living at home with their parents than in any other
arrangement.
13/15
5/24/2016
Thats according to a new report from the Pew Research Center, in which researchers studied census data going back more
than 130 years concerning the living arrangements of young adults.
According to the report, in 2014, 32.1% of young adults lived in their parent(s) home, with 31.6% of those aged 18 to 34
living with a partner or spouse. 14% lived alone, while 22% had some other living arrangement, such as living with extended
family members a sibling, or in group housing.
This turn of events is fueled primarily by the dramatic drop in the share of young Americans who are choosing to settle
down romantically before age 35, the report reads. Dating back to 1880, the most common living arrangement among
young adults has been living with a romantic partner . . . this type of arrangement peaked around 1960, when 62% of the
nations 1834 year olds were living with a spouse or partner in their own household, and only oneinfive were living with
their parents.
Trends in Living Arrangements

Americansaged1834
Livinginparent(s)'home
Marriedorcohabitinginownhousehold
Livingalone,singleparents,andotherheads
Otherlivingarrangements
1880
29.8%
1900
32.1%
1910
30.4%
1920
31.4%
1930
32.3%
1940
35%
1950
24.2%
1960
19.6%
1970
22.1%
56.4%
1980
22.5%
47.5%
1990
24.2%
2000
23.2%
2006
27.3%
36.5%
16.1%
20.1%
2007
27.8%
36.3%
15.8%
20.2%
2008
28.6%
35.3%
15.7%
20.4%
2009
29.1%
34.6%
15.7%
20.7%
2010
29.7%
33.8%
15.2%
21.3%
2011
31.1%
32.6%
15%
21.4%
2012
31.7%
32.1%
15%
21.3%
2013
31.9%
31.8%
14.6%
21.8%
14.4%
21.9%
2014
32.1%
44.5%
22.5%
42.8%
21.9%
44%
22.8%
47%
19%
46.6%
18.4%
45.9%
16.4%
56.6%
16.1%
62.2%
13.3%
8.3%
13.2%
15.8%
45.8%
14.5%
42.6%
15.8%
31.6%
MENU Fortune.com
Subscribe
Source:PewResearchCentertabulationsofthe18802000U.S.decennial
censusesandthe20062014AmericanCommunitySurveys(IPUMS)
14.2%
15.5%
18.4%
Fortune.com
As you can see, the alltime high rate of young adults living with their parents actually peaked way back in 1940, but at that
time there was still a higher rate of young adults living with a partner or spouse. This is one reason why Pew researchers
named changing attitudes towards marriage and monogamy as a prime driver for changes in living arrangements. Pew
points out that the median age of first marriage has been rising steadily for decades, and estimates that oneinfour of
todays young adults will never marry at all.
At the same time, its difficult to separate social factors, like attitudes toward romantic commitment, from economic ones.14/15
5/24/2016
At the same time, its difficult to separate social factors, like attitudes toward romantic commitment, from economic ones.
The report points out that Employed young men are much less likely to live at home than young men without jobs, and
that the share of young men with jobs peaked around 1960 at 84%. Thats the same year that the share of young adults
living on their own peaked, which suggests that plentiful jobs lead to plentiful marriages and newly formed households.
The trend that Pew identifies is one likely reason that the homebuilding market has yet to recover, even a decade after the
peak of the real estate bubble. Despite the fact that home prices have recovered to their pre bubble trend, the number of new
homes being built today remains far below the highs in previous expansions, due to a combination of rising costs for home
builders as well as muted demand from young Americans declining to form households until later in life.
AROUND THE WEB
4 Shameless Lessons I
Learned From Being Broke
(BetterLife)
SponsoredLinksby
8 Surprisingly Cheap
Gadgets Sold For Just $50
or Less
20 Qualities that prove He is

Not a Husband Material
(TheBiggestBirds)
(WorldTop)
See Listings of the Most

Expensive Properties Around
the World
(MansionGlobalbyDowJones)
Comments
Licensing
15/15

This Pope Means Business - Fortune

Diunggah oleh

Informasi Dokumen

Hak Cipta

Format Tersedia

Bagikan dokumen Ini

Bagikan atau Tanam Dokumen

Opsi Berbagi

Apakah menurut Anda dokumen ini bermanfaat?

Apakah konten ini tidak pantas?

Hak Cipta:

Format Tersedia

This Pope Means Business - Fortune

Diunggah oleh

Hak Cipta:

Format Tersedia

5/24/2016

All type of electric fuses Todo tipo de fusibles electricos

AUGUST 14, 2014, 7:00 AM EDT

800 per hour for Meeting Rooms

pedophilia scandals, says Kerry Robinson, executiveThisPopemeansbusinessFortune

Francis, kissing an ailing child during a church visit in Rome

THE CHURCHS THREE PILLARS

THE VATICANS ASSETS

Partial view of the Sistine Chapel fresco by Michelangelo.

By early 2013 the IOR was on the verge of collapse.

Additional reporting by Anna Artymiak

AROUND THE WEB

The Festival of Pigs

Rooftop Pasta Party with

The Fairest of Them All

Detection of the world giants

See all newsletters

Why Youll Probably Have to Move

MAY 24, 2016, 11:02 AM EDT

Photograph by Ken Ilio Getty Images/Flickr Select

According to new research from Pew

Trends in Living Arrangements

AROUND THE WEB

20 Qualities that prove He is

See Listings of the Most

Anda mungkin juga menyukai