(RNS) A leading Catholic anti-abortion group whose leader is under scrutiny for failing to disclose financial details reported a $1.4 million deficit in 2010 despite collecting tens of millions of dollars in donations during recent years.
The budget shortfall at Priests For Life and a bishop's recent decision to sharply curtail its national director's activities raise serious questions about the group's long-term viability.
The controversy could also affect the ability of the Catholic Church and the wider anti-abortion movement to press their signature political issue during the coming campaign season.
Founded in 1991, Priests For Life is led by the Rev. Frank Pavone, a New York-born priest known for his political activism and sometimes strident anti-abortion advocacy.
Earlier this month, Bishop Patrick Zurek ordered Pavone to return to Amarillo, Texas, where the priest is officially based, saying Pavone had failed to answer questions about Priests For Life's finances.
The group's financial troubles appear to partly result from the economic downturn that has hurt many nonprofits.
But an audit for 2010 released this week by PFL shows the problems also stem from debatable management decisions, such as spending nearly all of its reserve funds.
In a statement attached to the audit, the group said it had "responsibilities" as a leader in the anti-abortion movement to "maintain the momentum" despite declining donations.
"To do otherwise, would have been to take a step back," PFL's letter says.
The audit shows that Priests for Life's income, which is based largely on donations from individuals, went from $9.3 million in 2007 to $10.8 million in 2008 and $12 million in 2009.
In 2010, income dropped to $10.7 million while expenses stayed the same, resulting in a $1.4 million deficit.
Still, Pavone and PFL's loaned some $879,000 to Gospel of Life Ministries, an offshoot of PFL that Pavone established in 2006 at the headquarters of Priests for Life in Staten Island, N.Y.
Gospel of Life Ministries was intended to unite evangelical and Catholic anti-abortion activists and to be financially self-sustaining. Instead, it relied on funds channeled from PFL to subsidize two cable television programs.
The IRS has revoked Gospel of Life's tax-exempt status because it failed to file any forms for three consecutive years, according to GuideStar, an online database that tracks nonprofits.
PFL says it expects the nearly $879,000 loaned to Gospel of Life to be repaid by 2014.
In a statement released Friday (Sept. 23), Priests for Life said it did not understand why Gospel of Life Ministries had its tax-exempt status revoked and said it was "in the process of correcting this situation."
PFL also defended its financial practices, saying that the 2010 deficit was a one-time event and that its funds "will be replenished through targeted fundraising efforts in the next twelve to eighteen months."
The organization said it seeks to operate every year at a "break-even" pace, spending as much as it takes in.
"We are not called to accumulate millions in savings or investments, but rather to use all our resources to end abortion!" it said. PFL also said it will not reduce its 55-member staff because it would not be the "pro-life" thing to do during a down economy.
How this will all play out in terms of the future of Priests for Life may largely depend on the outcome of the showdown between Pavone and Zurek.
Earlier this month, Zurek told the rest of the bishops in the United States that he was recalling Pavone to Amarillo and restricting his ministry until the priest complied with demands to disclose financial records and ended his "incorrigible defiance of my legitimate authority as his bishop."
Zurek portrayed Pavone, who spends almost all his time traveling for PFL, as driven by personal ambition. Pavone has appealed Zurek's ruling to the Vatican and said he will look for another diocese to call home.
Meanwhile, a number of anti-abortion groups and activists have organized petitions on Pavone's behalf and demonstrated in Amarillo against Zurek.
Pavone has a history of failed ventures -- his efforts to start a religious order, the Missionaries of the Gospel of Life, was shut down by Zurek's predecessor, Bishop John Yanta, and the Vatican in 2007 -- and a record of friction with other bishops.
"For years Father Pavone has run PFL as his own personal fiefdom," Philip Lawler, editor of the conservative website Catholic World News, wrote this week. "He has been answerable only to the PFL board of directors -- on which he and his paid subordinates have formed a solid voting majority. That long run of complete autonomy is now coming to an end."