Anglican Watch is issuing a formal warning to donors, employees, and other stakeholders of the Cathedral Church of St. John the Divine in New York about the increasing likelihood of major financial and operational issues at the Cathedral. We call on Bishop Matthew Heyd of the Episcopal Diocese of New York and the Cathedral’s trustees to act immediately to address the underlying issues.

Our specific concerns include:

• Persistent structural deficits.
• More than a dozen staff complaints of mistreatment.
• Lack of financial transparency.
• Ineffective internal controls.
• Facially improbable budget forecasts.
• Allegations of potentially criminal behavior involving Cathedral finances.
• Inadequate supervision by Bishop Matthew Heyd and the Cathedral’s trustees.
• Ongoing documented concerns about Cathedral Dean Winnie Varghese and her lack of managerial skills.

To be clear: While the Cathedral’s financial problems predate Dean Winnie Varghese, internal forecasts reveal a growing structural deficit and runaway spending in several categories. Combine those factors with the increasing risk of an economic downturn when the AI bubble eventually bursts, and it becomes fair to say that our concern is growing exponentially.

A deficit without a demonstrated solution

As we previously reported, financial information reviewed by Anglican Watch projected FY26 spending of $17.7 million against revenue of $10.2 million — a gap of roughly $7.5 million before endowment support. A planned $5 million draw still leaves about $2.5 million uncovered. FY27 planning looks worse: $7.8 million in revenue against $17.1 million in spending, a $9.3 million gap before investment support.

Moreover, recent updates we have received show that the Cathedral lacks operational plans in place to address these shortfalls and is making little, if any, progress toward its stated financial goals.

Personnel problems caused by lack of managerial skills and narcissistic conduct

Anglican Watch’s ongoing investigation reveals that Varghese has a long history of superficial charm, combined with abusive conduct towards church staff. This pattern of behavior has led to the departure of the very individuals best positioned to resolve the Cathedral’s financial and operational issues.

To be clear: These issues extend to Varghese’s tenure with St. Luke’s Episcopal Church in Atlanta, where she served as rector from 2021 to 2025. Numerous sources there recount precisely the same sorts of allegations we are receiving from the Cathedral: Bullying, the departure of long-term employees, plummeting morale, and an utter lack of management competence.

Thus, these issues should have been identified during the hiring process that brought Varghese to the Cathedral. Moreover, it is unacceptable that Heyd and the trustees are ignoring these issues as they play out at the Cathedral. Indeed, leaving aside the irony of a toxic work environment at a church, the last thing the Cathedral or the Diocese needs is this sort of behavior from someone in a leadership position.

Questionable financial reporting practices

These HR and management issues intertwine with myriad problems with the Cathedral’s financial reporting.

In this regard, we have identified multiple instances in which Varghese appears to have directed finance staff to prepare budgets and financial reports inconsistent with generally accepted accounting principles (GAAP).

Additionally, in some instances, knowing miscategorization of income and expenses, and use of Cathedral funds for personal expenses, has led our sources to express concern that the behavior in question may rise to the level of fraud.

On that score, we’re realistic: Relevant law enforcement officials are unlikely to press charges against Cathedral officials, absent outright embezzlement. Instead, the real risk is an implosion of donor trust, resulting in a sharp erosion of giving to the Cathedral and lasting reputational damage to the extended Episcopal Church.

Relatedly, the Cathedral’s refusal to provide us with any financial information, including budgets and interim financials, or to answer any of our questions, should be the governance equivalent of a five-alarm fire. Indeed, few signs of mismanagement are clearer than a nonprofit, church or otherwise, that refuses to make its financial information public. Such behavior invariably erodes public trust — an outcome Varghese either knows or should know. Simply put, one cannot be a credible leader if one does not recognize the importance of candor and transparency, particularly when it comes to a budget with massive structural deficits.

Speaking of which, we still want to know why, after a major renovation of her apartment on the Close, Varghese needs an additional $70,000 in kitchen upgrades. While there may well be a legitimate reason — like the presence of asbestos — without an explanation, it looks like Varghese is living life large on the church’s dime.

Bishop Heyd and the other trustees fail to fulfill their fiduciary obligations

These concerns are exacerbated by the laissez-faire attitude of Bishop Matthew Heyd and the other trustees, all of whom appear to be lulled into a false sense of security by Varghese’s claimed commitment to a balanced budget.

To be clear: By law, fiduciaries must ask questions, exercise due diligence, and act in the best interest of the organization. Shrugging and saying, “Well, she’s going to balance the budget,” doesn’t cut it, especially when, as here, the structural deficit is growing.

We also need to recognize that the credit union and the Cathedral, which share several so-called leaders, do not necessarily have consistent interests. For example, the Cathedral urgently needs to increase revenue while cutting costs; the credit union needs additional revenue and additional cash infusions, which now come from the Cathedral. Thus, it is difficult to be a fiduciary to both organizations, notwithstanding the perception that the credit union is a ministry of the Cathedral.

The trustees and the bishop need to act

Wow, where to begin? Like many issues with the Diocese of New York, the Cathedral is a hot mess.

That said, we can identify several starting points:

• The Cathedral must publish financial reports and budgets, including interim financials, immediately. And no, we’re not talking about one of these nonsensical pie chart documents with line items concealed via categories like “ministry.” Instead, we’re talking about financials where anyone can understand granular expenses.
• The trustees need to demand details behind budget assertions, including implementation plans. Start with some of the massive increases reflected in Varghese’s budgets and ask what steps are being taken to get there and what measurable progress, in dollars, has been made towards those goals.
• Trustees need to understand revenue and expense timing issues. Churches, in particular, have strong periods of ebb and flow in their financials, so understanding these issues provides important context.
• The Cathedral urgently needs to undertake a professional HR audit, and not via some friend of a friend, but rather from an organization with expertise in this area. Indeed, even the best operational and financial plans rarely work when employees are unhappy, and we know of no one who wants to work at the Cathedral these days. And we’ll spell it out: The audit should include interviews with former employees.
• Budget forecasts and contingency planning that consider the increasingly likely possibility of a downturn in financial markets.
• Developing a written turnaround plan. Yes, we get that the structural deficits have been the historical norm for the Cathedral. But instead of shrugging and concluding that deficits are normative, this underscores the need to address these issues while the Cathedral still has the resources necessary to do so.
• Publicly document the steps needed to turn things around, identify the people responsible, and set a timeline for these changes.
• Varghese needs to understand that her threats of draconian layoffs start with her. As in, the buck stops with her, and if things don’t improve and she doesn’t deliver the results she’s promised, she’ll be the first to go. Sorry folks; it’s called leadership.
• Relatedly, there needs to be a serious assessment of whether Varghese is the right person for the job. While we have no axe to grind with her personally, everything we have seen suggests that the Diocese hired her for inclusion, not competence. And to be clear: We support affirmative action. But leadership skills still need to be there, not just someone who seems personable, has made themselves visible, and who arguably represents several minority groups.

Relatedly, we remind all involved that, as bishop, Heyd has a double responsibility to address these issues. Yes, we get that it may not be easy for him to admit that he made a mistake in hiring Varghese. But doing so is far easier than addressing an implosion at the Cathedral.

Until these and other reforms happen, donors should ask for current financial information and clear written terms before making substantial commitments. And everyone involved needs to recognize that, even with significant cash on hand, the Cathedral faces a growing risk of a major financial and operational meltdown.