U.S. Dioceses Facing Financial Squeeze, Foundation Leader Says
The Tidings [United States]
July 7, 2006
Catholic dioceses in the United States "appear to be running through their reserves at an alarming rate," Francis J. Butler, president of Foundations and Donors Interested in Catholic Activities, told the National Leadership Roundtable on Church Management June 29.
The round table, a gathering of more than 200 top Catholic executives in business, finance, law, philanthropy, academia, nonprofits and church institutions, including a dozen bishops, met in Philadelphia to discuss ways to improve the church's fundraising and financial management and reporting practices.
Butler said he recently interviewed financial officers of several dioceses he considered "fairly typical and well-managed."
"The findings are striking," he said. "In the past eight years one archdiocese experienced a 47 percent decline in unrestricted net assets, whose value is probably the best barometer of financial health. This amounts to a decline of a whopping $16 million a year."
He said the financial officer of "another large, well-run archdiocese" told him that most of its deficit is due to subsidies for parishes with schools. "Impressive efforts to establish scholarship foundations as well as special diocesan campaigns to benefit inner-city schools are not sufficient" to stanch the flow of red ink, he said.
"To keep parish-run schools afloat, the archdiocese is still forced to channel millions of dollars away from other essential ministries," he added. "What's more, operating costs are rising faster than tuition levels and are projected to grow even more dramatically in the years ahead.
He said the financial officer of a third archdiocese he contacted told him that the parish assessment for archdiocesan programs was rising more slowly than expenses.
"Income from special archdiocesan appeals is diverted to help fund clergy pension funds, school scholarships, Catholic charities and the running of the seminary," he said. "And still many needs go unaddressed, including a huge backlist of repairs and maintenance of parish facilities."
The archdioceses he was talking about "would be generally considered healthy and well-managed," he said. "They are not bogged down in courtrooms nor liquidating assets to meet legal settlements.... While their investments generally have seen better days, they have avoided great losses and can claim balanced financial portfolios."
Butler said another archdiocese he checked out has doubled its revenues in the past eight years but has been forced to make budget cuts each of the past four years because of depleted reserves, growing costs for retired priests and necessary subsidies to parishes serving the poor.
"The time has come to engage the wider community of faith in an urgent discussion of the church's financial plight," he said.
"Financial worries and desperate measures are crowding out a more evangelical and growth-oriented outlook," he added.
"It need not be this way," Butler said. "I can say this confidently because there is the example of those dioceses and parishes that have wholeheartedly embraced stewardship practices and policies."
He cited the Diocese of Wichita, Kan., as an example, noting that parish collections there are triple the national average and no child attending Catholic school has to pay tuition. He said the St. Paul-Minneapolis Archdiocese, where 2,000 donors built up a $150 million fund to provide ongoing subsidies to parishes and schools with long-term needs, is another example.
Butler said the wealth of Catholics and their capacity to give have grown enormously in the past generation or two "but with few exceptions the growing superwealth and social position of Catholics have not meant a commensurate gain in funding Catholic institutional life."
He said the church needs to present "a vibrant theology and practice of stewardship," make its goals known in a clear, compelling way that includes open accountability for its use of its resources, and get out the message that each person's gifts and personal involvement in the church's mission are not just welcome but needed.
He said the Boston Archdiocese, which has faced major economic setbacks in the past several years --- in part because of the clergy sexual abuse crisis and action on long-overdue parish closings --- took a big step forward this spring with its detailed, audited financial report. "The local church's more open policy is already making huge strides toward reuniting the community and rebuilding trust," he said.
At a dinner that evening the Boston Archdiocese received the round table's first "Best Practices Award" for its financial reporting.
"The Boston report is a great exemplar of the comprehensive, consolidated, audited and reader-friendly financial reporting the leadership round table is calling for," said Geoffrey T. Boisi, chairman of the round table.
The round table grew out of a 2004 meeting in Philadelphia, at the University of Pennsylvania's Wharton School of Business, of leading Catholic executives in business and other fields who were concerned about improving the church's financial, personnel and management practices. The round table was formally established the following year and held its first national meeting last October.
The June 29 meeting focused especially on diocesan finances, planning and financial reporting. A luncheon session was devoted to exploring the extraordinary challenges the New Orleans Archdiocese has been facing in its efforts to rebuild after Hurricane Katrina.
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