Portugal Cove South is a fishing village with approximately 86 residents on the Avalon Peninsula in Newfoundland. The town is home to a century-old Roman Catholic church, the Holy Rosary. In August 2024 the parishioners were informed by Archdiocese of St John’s that their church was sold without their consent for $48,000.  The town fought back and changed the locks.  While the community’s battle is inspiring, yet another church is lost.  It’s a story that has implications for churches, estate planning, and the charitable community across Canada.

Portugal Cove South

Portugal Cove South is small rural community in decline.  It lost its primary industry in the 1990s – cod fishing – and then two-thirds of its population.  Yet, in 2019, this shrinking hamlet invested $134,000 and a lot of sweat equity into renovating their crumbling church.  It is a local source of pride and a gathering place. Despite this initiative the community didn’t own the building it repaired; the Archdiocese did and the Bishop was forced to sell the building.

In July 2024, the Newfoundland and Labrador Supreme Court ruled that the Archdiocese owed $104 million to pay off sexual abuse victims at the Mount Cashel Orphanage in St John’s. The abuse dates from the 1960s and 1970s.  The decision prompted the sale of the imposing cathedral in St. John’s – which will soon be a brewery and spa – and at least 22 parishes.  To date, $45 million has been raised and the Catholic infrastructure in Eastern Newfoundland is devastated.  Wiped out after over 200 years.

“What you’re doing is transferring the blame for children being abused to the people.  You’re punishing the people for something they hadn’t done,” Holy Rosary parish priest Father Peter Golden told the podcast The Decibel.  There are two tragedies at play here – community and sexual abuse victims – and they are hard to fully reconcile.

This isn’t the first time the tragedy of Mount Cashel produced seismic legal shocks.  In 1990, the initial judgement against the Christian Brothers led to charitable property being seized to compensate victims.  That decision prompted efforts to protect charitable property in two provinces, and it redefined charity law in Canada.

Implications for Community

Church closures are not limited to Eastern Newfoundland.  Canadian Catholic and mainline Protestant churches are closing at a record rate, driven by aging parishioners, declining attendance, and mounting costs.  Every two weeks the Canada Gazette publishes a list of church that have undergone voluntary revocations, giving up their charitable status.  The charitable researcher Don McRae documents this pattern in his email newsletter, and he notes that the failure rate has only increased post pandemic.

I previously wrote about this trend for All About Estates.  While I have empathy for the faithful, I am concerned what the trend means not just for organized religion, but also community infrastructure. So many churches function as community centres, homes for Girl Guide troops, nursery schools, homeless programs, and AA meetings.  Churches and other places of worship are community hubs.  They have a staunchly non-commercial mandate, but they are disappearing fast as high real estate prices become an attractive solution to declining attendance and mounting costs.  At one time 65% of charities were religious, and now it is just 37% and continuing to slide.

Civic Engagement and Belonging

The loss of organized religion may also be a factor in the decline of community participation and charitable giving.  Civic engagement and belonging are down; isolation and loneliness are up.  The percentage of Canadians who claim donations on their taxes was 30% in 1990 and 17.2% in 2022.  Volunteer rates are also decreasing, even though the percentage of retirees in Canada is growing.  Historically, religious Canadians gave twice as much to charity as their secular fellow citizens.  Who will take their place?

Churches and other place of worship are place-based, high-involvement volunteer communities that aspire to produce good in the world.  They have traditionally been a place where people learn to volunteer and to give.  Churches – and other religious organizations and faiths – have traditionally been the source of funding and energy for schools, universities, hospitals, cemeteries, and social service organizations.  Although it is hard to admit in this secular age, the community roots of the charitable sector in Canada were churches. Churches and other places of worship inculcated giving and volunteering in society. Do we have a replacement for this civil society training school?

Estate Donations and Churches

Returning to Newfoundland and Holy Rosary, the shifting church landscape creates challenges for donors planning to make an estate donation to their church.  We see 100-year-old entities that are disappearing.  Assets are at risk.  Charitable purposes and activities grind to a halt.  And parishioners, at least at mainline Protestant and Catholic churches, are aging.  Many of them want to donate to their place of worship with a gift by will.  But how do donors ensure money supports their intended purpose and is protected?

Like hospital and schools, many churches now use parallel or associated foundations to fundraise and manage charitable property.  These are protection structures.  Almost every established church – Roman Catholic, United Church, Anglican – has a parallel charitable foundation.  These are prudent entities that help ensure the continuity of faith.

Our experience at Aqueduct Foundation is that religious donors are rattled about the rate of church closures.  They fear that a gift to their church could be lost if there is a future closure.  Lifelong parishioners wish to support their church and their community.  They are seeking trust-like structures that combine asset protection, future discretionary decision making, and personal donor choice.  Donors wants their churches to have a future, but sometimes that means donating in a more roundabout way.