Can a Church Go Broke?

In an experiment that is gaining popularity among a range of Catholic communities, some schools and parishes have established corporations to give themselves complete independence, even from their regional diocese. In 1997, for instance, a group of Dominican nuns founded the Sisters of Mary, Mother of the Eucharist convent in Ann Arbor, Mich., which has expanded to include four local schools and two in Honduras. Sisters of Mary is incorporated and run by a lay board of directors. Its financial affairs are directed by a Virginia-based private investment group that primarily focuses its efforts on sustaining small nonprofit organizations. "You have to protect the future, and that's what the parishes and the schools are trying to do now," says Bernard Dobranski, dean of the Ave Maria School of Law, which is down the road from the convent.

By almost any reckoning, the church's legal future looks bleak. Boston alone is up against as many as 450 separate claims of sexual abuse. Plaintiffs' attorneys in California and New Mexico say they have received dozens of new allegations in recent weeks. In Milwaukee, the reverberations of last week's disclosure have only begun. The longer the church has to fight to protect its assets, the more likely it is that the real cost will be measured in faith.