World leaders and pilgrims descended on St. Peter’s Square this morning to bid an emotional farewell to Pope Francis. Next, the hard work of selecting a new pope begins. And whomever the 135 cardinal electors select will inherit not only a church divided by politics but a financial basket case.
Donor groups tell DealBook that they’ll be watching closely — and praying.
The Roman Catholic Church presides over an enormous portfolio of real estate, art and other investments; the so-called Vatican bank manages roughly $6 billion in assets, but has been rocked by a string of corruption scandals over the years.
Francis worked to restore confidence in the Vatican’s finances, a push that succeeded in drawing in donors. But with a succession fight about to begin, big questions loom over whether those efforts will continue — or whether the new pope will reverse them.
“We are in a period of uncertainty,” Sister Jane Wakahiu, the associate vice president for programs at the Hilton Foundation, told DealBook. “No one can possibly be able to fill perfectly the shoes of Pope Francis.”
Founded by Conrad Hilton, the hotel magnate, the Hilton Foundation is one of the biggest financial backers of Catholic sisters’ work around the world, and has given roughly $28.5 million to Vatican-led initiatives, including Vatican departments, since 2020.
Francis saw donors as vital partners. He looked to them not only to fund the causes dear to him but also to plug the Vatican’s creaky finances. In February, while the pope was recovering from a near-death bout of double pneumonia, he created the Commissio de Donationibus pro Sancta Sede, a committee to fund-raise directly for the curia, or the Vatican’s governing hierarchy, and to shore up its many budget shortfalls. Francis’ initiative was bold: He was essentially betting that donors would be happy to openly fund church bureaucracy as well as the Roman Catholic Church’s far-flung missions around the world.
Such an ask would have been an extremely tough sell when the Francis papacy began.
Back then, the church’s financial reputation was in tatters. Accounting intrigue and scandal at the Vatican Bank loomed over the last conclave. In 2013, just before Francis was elected pope, Italian banking authorities had shut off most of the A.T.M.s in the Vatican and blocked credit card transactions at the Vatican Museum, until the microstate could prove it was meeting international anti- money-laundering standards. Decades of mismanagement and corruption scandals had taken their toll.
The church seemed to need a great business mind as much as it needed a towering theologian.
To donors’ relief, Francis modernized the Vatican’s financial oversight. A year into his papacy, he created an auditor general and beefed up internal anti-corruption controls. He also introduced some financial transparency (though it’s far from business-world standards) and brought in outside auditors, such as KPMG and EY, to help keep a lid on costs and make the Holy See’s curia run more professionally.
He also worked more closely with the church’s major donors, and their influence on the church grew.
At the same time, the Vatican hosted a series of impact-investing summits to bring more Wall Street money to causes close to Francis, many of the same ones that donors often focus on. The pope became a featured speaker at major international events, addressing in 2023 the Clinton Global Initiative.
But the Vatican’s finances weren’t completely fixed. Though losses narrowed under Francis, the Vatican was still running a deficit of 83 million euros (about $89 million) last year, according to Reuters.
That financial mess puts further attention on Francis’ final major plea to donors — the fund-raising commission he created in February. Will it get the blessing of the new pope? Or will a new curia sweep it under the rug?
Donors have other questions, too. Many of the foundations and nonprofits found in Francis a champion of the same causes they fund, thus making the church a good fit for their donations. Will the next pontiff follow his legacy and push for social and climate justice as well as the rights of migrants, women and the poor?
The world of philanthropy is already facing big challenges. In the United States, overall giving has been on the decline, and nonprofits and foundations are reeling from President Trump’s efforts to shut off funding to federal agencies, including the United States Agency for International Development, that address these same issues.
With Francis’ death, some donors feel they’ve lost a key ally. “He was an important global moral voice, and he will be greatly missed,” Alexia Kelley, president of FADICA, one of the world’s largest networks of Catholic philanthropies, told DealBook.
Francis’ legacy is already a hot topic. Early in his papacy, commentators saw a “Francis effect,” or the idea that Francis could use his charisma and the power of the papacy to bring together world leaders to address thorny issues. (That said, the “Francis effect” did not seem to energize Catholics to return to church in greater numbers.)
Donors talk about a different kind of “Francis effect.” He had a kind of magnetism that could persuade powerful people to use their money and influence to advance causes he cared deeply about. Sister Jane, who met Francis eight times during his papacy, said his legacy — if not his superpower — was “to instill hope.”
She acknowledged, though, that in these times, especially with Trump’s gutting of U.S.A.I.D., mustering hope among the donor community would not be easy.
That, too, puts a lot of pressure on Francis’ successor.
— Bernhard Warner
IN CASE YOU MISSED IT
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Trump’s job approval rating fell. About 40 percent of Americans approve of how the president is managing the country, a drop of seven percentage points from February, according to Pew Research. As for tariffs, 59 percent disagree with the policy, while 39 percent approve. The New York Times/Siena College poll, published yesterday, found that 55 percent didn’t like how Trump was handling the economy, and 53 percent disapproved of his trade policies. Trump has responded to bond vigilantes, C.E.O.s and the markets. Now he has polling figures.
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A Facebook co-founder on the fantasy of free markets
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Chris Hughes has crisscrossed the worlds of business, government and media. One of the co-founders of Facebook with Mark Zuckerberg, he led the digital efforts of President Barack Obama’s 2008 campaign, briefly owned the New Republic magazine, and co-founded the nonprofit Economic Security Project. Along the way, he has developed a theory about American capitalism.
In his new book, “Marketcrafters,” Hughes argues against the idea that a mythical “free market” works best without government interference, or needs such interference only when the market malfunctions. Instead, he builds a case that the U.S. economy has for more than a century been deeply shaped by policymakers using tools like public investment, stockpiling and reserve management, antitrust policy, and regulation.
DealBook spoke with Hughes about how the theory fits into the current moment as President Trump has made dramatic moves to shape the global market and Meta is facing claims in court that it broke antitrust laws. The interview has been edited and condensed.
In the book, you mention Republicans including Marco Rubio and JD Vance as stewards of your notion of marketcraft. Rubio has argued for shoring up the defense industrial base, and Vance wants a more aggressive antitrust regime. Do you see any evidence they’re putting those ideas to work?
Not now. In the first 100 days, I see, you know, pretty loyalist, sycophantic work or behavior on both of their parts. I don’t know if that will change, but I do know that I’ve listened to Marco Rubio talk for years now, both in person and at public events, and elsewhere. And I genuinely don’t think that he thinks markets regulate themselves. He believes that the state can and should guide them and craft them.
I think that those intuitions are real. In the positions that particularly the secretary of state and the vice president are in now, I see them just doing whatever some mood of the day asks them to do.
You write that you don’t consider Trump’s tariffs to be marketcraft. He’s definitely trying to influence markets. My understanding of your argument is that the tariffs lack the “craft” part.
It has to be pointed toward something. Take taxes. Setting a marginal tax rate doesn’t craft a market. Of course, it affects markets profoundly, but it doesn’t craft a market. Whereas creating a really meaningful tax break for solar energy, that boosts the solar energy market, that crafts that market.
You wrote an op-ed in 2019 calling for the government to break up Facebook. Have you been watching the Meta antitrust trial?
A bit, I have. I haven’t spoken with Mark or any of the other folks at the company since I wrote that piece, but I’ve been reading the articles. Part of the reason I began this research journey into marketcraft is because, as Facebook got bigger and bigger, and I wrestled with my own role and responsibility in it, that set me down a path thinking about the importance of antitrust and antimonopoly, where it came from, how it works, and then all of a sudden I saw, you know, public actors managing and shaping all kinds of markets to make them more competitive and fair.
As someone who once owned a publication, The New Republic, how do you view what Jeff Bezos is doing with The Washington Post? Pulling the paper’s endorsement of Kamala Harris, or pivoting its opinion section to focus on “free markets and personal liberties”?
I think that when you invest in these things, you invest knowing that the best editors want the freedom to deliver on their agendas. When I was in the media world 10 years ago, I was very focused on adapting the methods of delivering and explaining the news and adapting to the digital revolution. So I guess I don’t quite understand why he’s taking the institution in this kind of direction that’s so far afield from its history. It’s hard to see that that is going to be a good thing. I mean, everything you hear is that the staff is just bleeding people. Bezos is a much better businessman than I, but that doesn’t seem great for the brand or for the bottom line.
Do you think the trend of billionaires outside of media buying journalistic publications — like Bezos with The Post, Patrick Soon-Shiong with The L.A. Times, Laurene Powell Jobs with The Atlantic — is a good thing?
I think ideally, the institutions of the media would not have a profit motive. I think that the not-for-profit structure would be better than a for-profit one. But it’s also very hard to raise the meaningful money you need for the amazing reporting, the newsrooms, but also for the printers, for engineers, for all of these things.
And so I guess this is a long-term question of the structure of the media in the United States. But it’s always been in this unique place where its core, it exists in this middle area. And for a long time, we had these norms of respecting the ideological freedom to have editors and writers to explore their ideas. And I think that’s what has made them so great.
If newsrooms are getting locked down, obviously, there are lots of other places for people to go, the Substacks and Discords of the world. I think you’re seeing a flowering of smart analysis in those venues, which is bigger and better than what’s happened on Twitter and social media elsewhere.
Would you ever try buying a publication again?
I’m focused on economics and public policy. It’s the stuff that I love.
Thanks for reading! We’ll see you Monday.
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Bernhard Warner is a senior editor for DealBook, a newsletter from The Times, covering business trends, the economy and the markets.
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