Today the Archdiocese of Boston released the Annual Report for the 2010 fiscal year, which ended June 30, 2010. You can read the report here. There is much to report and it will take several posts to cover everything.
First, here are highlights from the archdiocese’s press release:
- Balanced budget was achieved in Central Ministries;
- Parish offertory remained flat despite impacts from the global economic crisis;
- 36% of parishes operated above breakeven, 31% at breakeven and 33% operated at a loss;
- Improved Financial Relationship Model (IFRM) was successfully launched in 33 parishes, who subsequently saw a 17% average increase in offertory collections;
- Investment performance and portfolio improved from the previous fiscal year;
- Catholic schools remained a priority and the Archdiocese completed a financial analysis of each school;
- Boston Catholic Development Services was launched to provide improved collaboration, coordination and effectiveness in our fundraising efforts;
- A comprehensive plan to address the long-term challenges of the lay pension plan was developed and enacted, meeting the Cardinal’s commitment to our lay staff;
- Compensation and Vendor Disclosure, modeled after the Internal Revenue Service Form 990, is now included with the release of the annual report, providing greater visibility into RCAB compensation information;
2011 Catholic Appeal
Ms. Kathleen Driscoll, Secretary for Institutional Advancement for the Archdiocese of Boston, reported that the goal of the 2011 Appeal is $14M which represents an increase of 11% over the final 2010 Catholic Appeal amount of $13.0M. The 2010 Catholic Appeal ($13.0M) represents a decrease of 14% vs. Catholic Appeal 2009 ($15.0M). This 14% decrease in 2010 was due primarily to the slow recovery of the economy, whereas many non-profits experienced anywhere from 11% to 40% decline in donations.
First of all, we commend the archdiocese for releasing this comprehensive information. It is more extensive than what is released by most, if not all, other dioceses. It takes a lot of work to pull all of this together, and we agree with the archdiocese that this sort of transparency and accountability helps build trust. It is also a good thing for people to all know and understand the challenges that lie ahead, and when one closely reviews the reports, those challenges are clear.
For today, we will just start by highlighting a few things that jumped out at us.
- 2010 Catholic Appeal decrease of $2 million from 2009 to 2010. We commend the archdiocese for finally releasing the number and acknowledging the 14% decrease. (Somehow, the Boston Globe must have misread the news in their article, which originally said, ”Contributions to the archdiocese’s big annual fund-raiser increased substantially.” See screen capture to the right for the original version, as it will no doubt be corrected soon).The explanation given by the archdiocese for the drop–the “slow economy” and “declines in donations to many non-profits”–does not entirely hold water. Donations to Boston Catholic parishes held steady. And donations to churches in the U.S. were actually up in 2010 according to multiple sources.We wonder why they did not cite the data referenced in this article in the NY Post dated April 9, 2011 :
“Defying secular trends and scandal, donations to churches are up, after slumping through the economic downturn. In fact, of the staggering $303 billion given by Americans in 2009 — accounting for 2.1 percent of GDP — about 33 percent was for religion, according to Giving USA. Nationwide, giving was up 43 percent last year compared with 35 percent in 2009, according to the State of the Plate Survey. Indeed, the US Conference of Catholic Bishops’ national collections are projected to total some $58 million for 2010, up from $56.6 million in 2009.New York and surrounding states led the nation — giving to churches rose 51 percent last year. The Archdiocese of New York’s Stewardship Appeal alone grew from some $15.58 million in 2008 to $17.76 million last year.”
- Balanced budget was achieved in Central Ministries. Well, that all depends on how you define “balanced budget.” Central ministries revenues = expenses on paper, but that does not account for how the archdiocese will pay back the $42 million in notes due to St. Johns Seminary, re-fund the $92.5 million that the clergy retirement fund needs for accrued clergy post-retirement and pension obligations, or come up with the $74 million that the lay pension plan needs to make up for its under-funded status. That is more than $200 million in debt. If paid back on a schedule over 10 years with zero interest, that would be a $20 million annual expense, which would seem to undermine the ”balanced budget” claim just a little bit. For those people with home mortgages, can you consider yourself as having a “balanced budget” if you keep living in your home paying your food, clothing, and utilities bills, but fail to make a monthly mortgage payment for several years?
- The bit about pay reductions of 5-10% for six-figure salaried executives (page 5 of the annual report itself) just does not check-out with the numbers. It says: “When planning began for fiscal year 2010, we were faced with a cash flow deficit of almost $4 million given our fiscal year 2009 budgeted deficit of $2.3 million, an anticipated Appeal decline of $1.5 million and expected increases in employee benefit costs. To address this deficit, various budget reduction strategies were implemented including:
- staffing decisions resulting in over 20 positions affected by lay-offs, freezing of open positions, transfer of staff to other diocesan entities, positions not filled after attrition and certain open positions kept unfilled;
- no cost of living adjustments to staff;
- pay reductions of between 5% and 10% on staff earning $100,000 or more per year”
In the 2009 report released in June of 2010, they said they had reduced salaries by those percentages in the prior year “until conditions permit restoration to their agreed upon salary.” [we erred in our earlier post]. Even if this reduction was extended through the 2010 year, the numbers still do not align with the words. Mary Grassa O’Neill was at $325,000 total compensation previously, and in this report, she is listed as earning “reportable compensation” of $320,426, plus “other compensation” of $28,946. A decrease from $325K to $320.4K is only a drop of 1.4%. Was she getting a whole lot more “other compensation” before that was not reported? There are many other examples just like this we do not have time for today.
We know there is more that we need to get to. Stay tuned for more next time.