Vatican City - Cash as much as congregations could be on Pope Benedict's mind as he gets to grips with heading a financially troubled Vatican.
The Roman Catholic church is the world's largest and owns some of the world's great art and architectural treasures, but it is failing to generate much in the way of money.
The Vatican's central administration, the Holy See, recorded a 9.6 million euro ($12.5 million) loss in 2003 as it fell into the red for the third straight year. Its revenues were just 203.7 million euros.
Vatican City, the papal state that owns treasures such as Michelangelo's frescoed Sistine Chapel, also lost money.
The double deficit could have serious consequences. The Holy See runs more than 100 diplomatic missions around the globe and a cut in its budget could affect its ability to reach its flock.
"The hole in the Vatican finances is ... a threat to whether it can operate on the current scale. They may not be able to expand or even may have to shut some missions," said Clifford Longley, a writer on Catholic issues based in Britain.
Returning the Holy See to the black would preserve the Catholic church's infrastructure particularly in Africa and Latin America, where the religion is growing at its fastest. New priests from the developing world have become vital to offset falling number of clergy in Europe and North America.
ART NOT FOR SALE
The Vatican's cash crunch is a surprise to most visitors to the papal state in the heart of Rome. Inside its walls lie not only the Sistine Chapel but the 500-year-old collection of the Vatican Museums, one of the world's finest.
But Benedict can't sell his way out of the Vatican's liquidity crisis and hawk a Raphael or Caravaggio like a cash-strapped CEO. The Vatican has a policy not to sell its art.
Each piece is given only a 1 euro nominal price tag in the Vatican books, underlining that the works are valued purely for their religious and artistic merits.
Entry fees paid by the museum's 3 million visitors a year are the main support for the tiny Vatican state.
For its part, the Holy See earns money from a reported $1.0 billion in low-risk stocks, bonds and real estate. This is topped up with donations direct from the pockets of Catholics worldwide, contributions known as Peter's Pence.
Booming financial markets in the 1990s gave the Holy See eight consecutive years of gains, but the weakness of the dollar against the euro hurt it in 2003. Currency losses in that year amounted to 33 million euros.
Peter's Pence brought in 55.8 million euros in 2003.
The 2004 accounts are due to be released in June.
BIGGER COLLECTION PLATE NEEDED
Lay advisers, such as Francis Butler, the president of U.S. Catholic donor association FADICA, advise the best way forward for the Holy See is to get individual Catholics to dig deeper into their pockets.
But the clergy sex abuse scandals that emerged under John Paul II's papacy have taken their toll on the church's biggest donors, Catholics in north America.
Several U.S. dioceses have so far asked for bankruptcy protection. The estimated $700 million in compensation paid out by U.S. churches does not directly affect the Holy See because its accounts are separate, but it has not escaped the impact.
In the two years since the sex abuse scandals broke, donations to U.S. diocese appeals, that include Peter's Pence contributions, are down 5-10 percent, FADICA data showed.
Geoffrey Boisi, a former JP Morgan bank executive who works with the U.S. Catholic hierarchy, argues Pope Benedict needs to be more transparent about the church's total assets and what it does with them to rebuild U.S. donor faith and donations.
"The rank and file U.S. Catholics have had their eyes opened about the way the church is managed through this scandal. This unhappiness is going to catch up with the Vatican in the midst of their own financial problems," FADICA's Butler said."