How to Save $2 Million Annually Without Really Trying: Part 1

For all of the pressure put on pastors (and thus on parishioners) to support the annual Catholic Appeal, for all of the pension and clergy retirement fund cuts, for all of the layoffs of dedicated church workers and all the ministry cuts that have supposedly been “necessary” to save money under the current Chancellor, what if someone could provide evidence that the Archdiocese was basically wasting $2 million/year or more?  Would anyone responsible for that waste get fired? (Or would they get retained and/or promoted)?  What if there was a way to save $2 million a year while maintaining all of the services currently provided?  What could be done with that $2 million?

We see a way to save at least $2 million annually from the Archdiocese of Boston central administration expenditures–if not more—but the people at the very top of the hierarchical food-chain at the Pastoral Center in a position to act on this –and on the Presbyteral Council and Finance Council–are simply not doing anything about it.  The blog and our readers are frankly getting sick and tired of the ongoing fiscal mismanagement and squandering of assets.

In our last post, “Is Boston Archdiocese Violating the Law?we reported on how the excessive salaries doled out by the Archdiocese of Boston represent a breach of fiduciary responsibility and could also set the archdiocese up for fines or other penalties by the government.  “Objective Observer” objectively observed and asked:

“Is there no one else who could do as good or better job as chancellor, as benefit trust president, or as school superintendent? Their combined compensation and benefits comes to nearly $1 million for just 3 people….So shoo them out the door with all the usual accolades, find three people at about $150,000 each to do their jobs. Now you are at $450,000 for salary and about another $150,000 for benefits (new hires can’t start in the pension plan). Put the other $400,000 you’re not spending on those three positions into the pension trust to raise the total available every year, and sing all the way to the bank.

While you’re at it, place a $150,000 cap on the top ten salaries (think about those lawyers, layers of finance poobahs, etc.).

We did the math, and are pleased to offer you the exclusive Boston Catholic Insider plan for cutting $2 million in two simple steps.  Here is the quick explanation of how to save the money.

Step 1: Reduce Excessive Spending on Top Ten Salaries

First, take the top 10 salaried employees and reduce their compensation to no more than $150K/year. These are people who make anywhere from $166K/year up to $325K/year.  We have listed most of the names and salaries before, but with recent changes, as best as we can determine, the Top 10 names now include the following people:

  • Terry Donilon, Secretary for Communications
  • Kathleen Driscoll, Secretary for Institutional Advancement
  • Mary Flynn Myers, Vice President of Development
  • Mary Grassa O’Neill, Secretary for Education, Superintendent of Schools (who, on top of her $325K salary from the RCAB, coincidentally, also collects a state pension of at least $75K/year from her 30 years working for the public schools in Boston and Milton)
  • Scot Landry, Secretary for Catholic Media
  • Beirne Lovely, General Counsel
  • Jim McDonough, Chancellor
  • Glenn Matera, Director of Finance
  • John Straub, Executive Director of Finance and Operations for Central Ministries
  • Jim Walsh, Assistant Superintendent of Schools for Administration and Finance

Not all of their salaries are yet published in reports, but we figure these 10 people are costing the archdiocese about $2.9-$3M in salaries and benefits (e.g. health, dental, life, disability and pension contributions).  U.S. government statistics say the median household income in Boston is around $55K/year and in Massachusetts as a whole it is $64K/year, so anyone making $150K/year would be earning nearly 3 times more than the median household income in Boston and 2.5 times the median household income in Massachusetts. (As part of this salary adjustment, the archdiocese should also reduce the paygrade/salary of the lead benefits administrator, Carol Gustavson, from $150K/year to around half that amount–which is what a benefits administration position should be paid in a Catholic diocese).

We estimate this cap of $150K/year would save at least $900-$925K in salaries alone (if not $1M+, when you also adjust down salaries of direct reports), and if we allow 25% for benefits, that is another $225-250K, for a total of about $1.15 to $1.25 million in savings. If individual secretariats can raise money to pay salaries above $150K/year with the full knowledge and support of their donors (or if the likes of “Jack and Jim” want to open their own checkbooks to fund higher salaries), that is fine.  But, anyone else not willing to accept this level of compensation would be encouraged to pursue employment elsewhere.  This salary reduction would also avoid the potential IRS penalty of 25% of the excessive compensation, or about $250K in potential penalties.  (Which budget would the Chancellor take the IRS penalty from?)

Bottom line: annual savings of $1,150,000 to $1,250,000, starting immediately, plus avoidance of a possible $250,000 IRS penalty

How many donors keeping their wallets closed in the 2010 appeal will it take for the archdiocese to do something?  Will the Presbyteral Council and Finance Council finally take up this matter with great urgency and take action?  Will pastors “just say no” and stop sending money to feed Corporation Sole’s voracious spending appetite until this is addressed?  Will the Cardinal finally exercise episcopal leadership and simply order that cabinet-level salaries be slashed?  Or will Chancellor McDonough keep twiddling his Blackberry trackball and the powers-that-be continue “fiddling while Rome burns”?

Stay tuned for our next exciting Part 2 episode in “How to Save $2 Million Without Really Trying.”  You will also learn what YOU can do to ensure your voice is heard about this ongoing squandering of archdiocesan assets and the breach of fiduciary responsibility.

Meanwhile, if you are concerned about wasteful spending and know someone who is still donating to the Annual Appeal, click on “Leave a comment” and then click on the “email” graphic to send a copy of this blog post to them.

14 Responses to How to Save $2 Million Annually Without Really Trying: Part 1

  1. George Williams says:

    “Will the Cardinal finally exercise episcopal leadership and simply order that salaries be slashed? Or will Chancellor McDonough keep twiddling his Blackberry trackball and the powers-that-be continue “fiddling while Rome burns”?” I know this is a rhetorical question and that is the really maddening aspect to all of this. It seems to me that a job at the Chancery, which was always a pretty good job but certainly not a career, has become a winning lottery ticket for a select group of people. There is no way that they are going to give it up willingly and it does not appear that the Archbishop and his Auxiliary Bishops care.

  2. joanne jauron says:

    Has anyone considered forwarding these finding to the media? Perhaps if the dirty laundry is exposed publicly, the powers that be will feel compelled to either respond or do something. Just a thought.
    Thank you for following and these matters!

    • FE says:

      Joanne,

      Michael Paulson of the Globe has been wined and dined by Jim McDonough and crew so that he writes his columns on the Catholic Church toward their liking.

      All the poorly paid and dedicated employees that were whisked away during and after their run to Braintree are now being threatened to take a small portion of their retirement so that they can totally erase their memory of service to their church.

      O’Malley and Erikson can pretend that what they have done was right and they know deep down it was wrong especially for the employees that couldn’t afford not to take their offers. Believe me they will have to answer to higher power. It was carefully planned out so that no one could sue them for age/sex/racial discrimination. These highly paid (and some are non-catholic by the way or don’t give a hoot about their religion) executives are laughing all the way to the bank. The Church never needed these people before and don’t need them now. But they continue to allow this little man Jim McDonough to build his Roman empire and we all know what happened to that….and in the end it will be the little person who pays for it.

  3. Liam says:

    Start with the Phoenix, which does not care about its image the way the Globe does.

  4. MT says:

    This is a great idea. These cushy jobs should indeed have much smaller salaries. Thanks for getting this info out.

  5. […] our last post, How to Save $2 Million Annually Without Really Trying: Part 1, we shared how the Archdiocese of Boston could readily save in the range of  $1,150,000 to […]

  6. […] like Boston. The sooner they tackle the program we outlined to save $2 million annually by chopping back the excessive six-figure salaries and ending the so-called “vigils” at closed churches, the more funds they will […]

  7. […] as long as the archdiocese keeps wasting $1-2 million a year on excessive six-figure salaries and maintenance of the  ”Invisible Vigils,”  does it really matter which Corporation […]

  8. […] is much more to be saved in excessive salaries, as we covered previously in “How to Save $2 Million Annually Without Really Trying: Part 1“  This is just five people or many making excessive compensation relative to other […]

  9. Dan Brown says:

    How have the subsequent annual appeals measured up to the past couple of years prior to the re-organization? I seem to recall the figures of $15m & $15.1m for ’08 and ’09. Where did 2010 end up?

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