Vatican looking into $17 million transfer from U.S.-based charity to impact investing fund

Rome Newsroom, Jun 1, 2023 / 08:30 am (CNA).

The Vatican is looking into the transfer of $17 million from the U.S. arm of a Church mission to an investment fund, according to the Associated Press.

AP reported May 31 that Pope Francis has asked aides to “get to the bottom of how” the money was transferred.

The transfers date mostly to 2021, when the board of directors of the Pontifical Mission Societies U.S.A. (TPMS-US) approved moving at least $17 million to a nonprofit organization and its private equity fund owned by the organization’s then-national director, Father Andrew Small, OMI.

TPMS-US is the U.S.-based branch of the Pontifical Mission Societies, a worldwide network of four societies that provide financial support to the Catholic Church in mission territories, especially in Africa. Most of its funds come from an annual donation taken up in Catholic churches in October.

As a pontifical organization, it is an official instrument of the Holy See and the pope.

While national director of TPMS-US in 2014, Small founded the New York-based nonprofit Missio Corp. and its private equity fund, MISIF LLC, under the umbrella of TPMS-US. They were separately incorporated in 2018.

After 10 years at the helm of TPMS-US, Small has been the temporary secretary of the Vatican’s Pontifical Commission for the Protection of Minors since 2021. He also continues to be president and CEO of Missio Corp., which runs Missio Invest, an impact investing fund providing financing to agribusinesses, health and education enterprises, and Church-run financial institutions in Africa.

The mission group’s new national director, Monsignor Kieran E. Harrington, and new board of directors have now written off $10.2 million of the total transferred as a loss since “there is no timeline and no guarantee of investment return,” according to its latest audited financial statement, AP reported.

“Management of the organization is diligently working to redeem the investment, however there is no timeline and no guarantee of investment return,” the financial statement says.

Small, in comments to AP, called the write-off of the investment “shortsighted” and said there is no reason to think there will not be a return on investment after the minimum 10-year commitment.

Vatican spokesman Matteo Bruni told AP: “The Holy See is aware of the situation and is currently looking into the details of the events.”

AP spoke to experts who said the transfers were not necessarily illegal, but Small’s leadership of both TPMS-US and Missio Corp. at the time, and the fact that the former distributes donations of the faithful while the latter gives out loans, raises some questions.

AP reported that according to financial statements, TPMS-US asked Missio Corp. for the $10.2 million investment in MISIF back but it was denied by Missio Corp.

Small told AP in email responses to questions that the money transfers from TPMS-US to Missio Corp and MISIF were approved by the board and in the best interest of the Church. Small also shared letters from bishops and religious sisters in Africa who benefited from Missio Corp.’s low-interest loans.

According to AP, TPMS-US changed the membership of its board of directors, which is mostly cardinals and bishops, after Harrington took over in spring 2021.

Harrington also hired a law firm to investigate Missio Corp.

The board of TPMS-US is currently evaluating its governance structures and will recommend new statutes and vote upon the civil corporation bylaws.

AP reported that some of the money transferred to Missio Corp. and MISIF LLC was earmarked for the renovation of a former monastery in Rome purchased to become a dormitory for women religious studying at pontifical universities.

The monastery, notable for having hidden Jews during World War II, was purchased by the Vatican in 2021 but continues to sit empty.

Small told AP the board of TPMS-US, “for a variety of reasons,” had decided to send the $4.7 million to his Missio Corp. to fund training of sisters in Africa instead of to Rome for the refurbishment of the dormitory.