Why we say the Church is holy

The Church is therefore holy, though having sinners in her midst, because she herself has no other life but the life of grace. If they live her life, her members are sanctified; if they move away from her life, they fall into sins and disorders that prevent the radiation of her sanctity. This is why she suffers and does penance for those offenses, of which she has the power to free her children through the blood of Christ and the gift of the Holy Spirit.

--Venerable Pope Paul VI