Catholic leadership gathers at Financial Summits

October 16, 2009, WORCESTER, MA --In an effort to address the financial challenges of the Diocese of Worcester in the most meaningful way possible, the Finance Office of the Diocese of Worcester held two Financial Summits recently to present a breakdown of the corporation sole’s financial state, excluding the value of real estate. Two sessions were held to make it possible for a wide variety of priests, lay staff and volunteer parish and diocesan leaders to participate. One session was held at the Blessed Sacrament Parish Center, Worcester on October 5 and another at the Our Lady of Mt. Carmel/St. Anne Parish Center, Worcester on October 12.

In his opening remarks on October 12, Bishop McManus noted that he found the presentation of the financial position to be “enlightening and sobering” and hoped that those in attendance would agree. Although the Diocese of Worcester has been transparent for many years in its published diocesan financial reports, which are independently audited, there is a continuing misperception by some that the Diocese has vast sums of money available to fund the work of the Catholic Church in Central Massachusetts. At these meetings, Msgr. Thomas Sullivan, Chancellor and Director of Finance, presented a more detailed analysis to emphasize both the degree and the ramifications of indebtedness which exists in the Diocese involving all its operations. The need for such a meeting, considered the first of its kind, was underscored by the reduction in investments during this current economic crisis and a reduction in parish support in weekly offertory giving, again due in part to the economy and, in part, by reduced regular financial participation of some parishioners over the past decade. As Msgr. Sullivan noted, “From whatever our vantage point, we know that today the great financial burdens are being shouldered by the few.”

At the outset it was made clear that overall diocesan operations have demanded deficit spending for more than a decade. Since 1998, this has required borrowing from the Diocesan Expansion Fund, essentially an internal bank with assets from all Catholic parish and diocesan operations in the Worcester Diocese. “The issues to be discussed have been developing over a period of many years, in some cases decades,” said Msgr. Sullivan. In order to explain the gradual increase of the debt, he first walked through a financial profile of the Diocese covering its major current assets, exclusive of real estate, and its major liabilities.

There are two principal asset groups: the Master Investment Account and the Diocesan Expansion Fund. The Master Investment Account review included a recap of the capital funds raised by Forward in Faith in 1999. A breakdown of diocesan borrowing to cover unpaid receivables and other diocesan programs was also presented. Recent annual reports by the Central Administration of the diocese indicate that by far the largest expense each year is for interest paid to the DEF for borrowing necessary cash to pay outstanding receivables owed by some parishes. These bills are for centrally managed services such as health or liability insurance and priests’ retirement care. In other words, the largest central administration expense has been assisting parishes with their financial obligations for regular operations. He then presented the assets and liabilities of the Diocesan Expansion Fund leading to the conclusion that as of August 31, 2009, 65% of DEF assets are loan obligations.

Specific challenges were then outlined for the Dioceses in the near future, particularly in vocations, Catholic school tuition assistance, and care for retired priests.

Vocations expenses currently run at $754,835 dollars but can only rely on approximately $33,000 in interest income from unrestricted funds, which requires that the balance be funded by the Annual Partners in Charity Appeal. Catholic Schools tuition assistance is running at historically high levels with $1,146,245 in financial aid given to students this current year. Sources for that funding include Partners in Charity, Adopt-A-Student, and interest from the Catholic Schools endowment from Forward in Faith. Yet that total amount only addresses 30% of the demonstrated need of applicants. “In other words,” said Msgr. Sullivan, “the need for financial assistance is more than three times greater than what we can afford.