Boston Archdiocese Income Declined $20M in Fiscal 2015; Lost $5M

With little fanfare, the Boston Archdiocese published its Fiscal 2015 financial report recently, where they reported a $20 million decline in revenue vs Fiscal 2014, and a $5 million operating loss for the year.  In addition, it should be noted that the Boston Archdiocese is unable to repay about $36 million in debt owed to St. Johns Seminary, and managed to get the seminary board to defer repayment from 2017 to 2027 with no interest charges. The annual Catholic Appeal raised $400K less in fiscal 2015 vs 2014, and spent $400K more than the previous year to do so.One third of parishes are operating in the red. Here are a few of the key points from the report.

Operating Loss (p. 12)
Operating income decreased $20.5 million from an operating income of $15.6 million in fiscal 2014 to an operating loss of $4.9 million in fiscal 2015. Revenues declined by $10.4 million, while expenses increased $10.1 million. This was explained as follows (p.8):

“Fiscal 2015 was a challenging year from a financial standpoint, with a significant decline in operating income for parishes, a deficit in central operations, and a loss in our self-insurance program. External events were a major contributor to these results. Low capital market returns impacted by concerns about a global economic slowdown, a return to a more customary level of parish bequests, and an extremely harsh winter that resulted in a number of catastrophic property insurance losses and increased utility and maintenance costs at parishes negatively impacted financial results.”

In addition, Central Operations lost $7.3 million in fiscal 2015 as compared to a $2.3 million loss in 2014.

Unable to Pay $36M in Debt
On many occasions, BCI has questioned how the Archdiocese will be able to repay the $36 million in debt to St. Johns Seminary for the property sold in 2007 in order to pay off sexual abuse settlement loans.  That debt was due to be paid in 2017. The 2015 Archdiocesan Annual Report and the 2014 Annual Report both describe how the debt payback has magically been deferred for 10 more years.  “On September 22, 2014, the St. John’s Seminary Board of Trustees voted to extend the due date of the $36.4 million note to August 23, 2027 (which was previously due on August 23, 2017).”  Such a vote presents a massive conflict of interest, as the Board of Trustees includes: Cardinal Seán O’Malley, Vicar General Bishop Peter Uglietto, and Chancellor John Straub–all of whom have an interest in not seeing the Boston Archdiocese default on the debt. But since the RCAB took the property from the Seminary and sold it out from under them, it’s an inherent conflict of interest for them to vote to defer repayment of this huge loan and charge no interest on a loan for 20 years–from 2007 until 2027.  Even in 2027, how will it be repaid?

Deception Around Paying for Clergy Sexual Abuse Settlements with Parish Funds
The lie continues here in the 2015 report. On page 20 they write, “Consistent with past practices, parish funds, money raised from the Promise for Tomorrow Campaign, the Annual Catholic Appeal and proceeds from the parish reconfiguration process are not being used to fund settlements.”  Page 21 of the report reveals the deception, which we debunked that deception two years ago in our post, “Archdiocese of Boston uses parish funds to repay sexual abuse settlement costs:

To repay the $4.8 million note, in 2013 the Boston Archdiocese transferred property from the closed Our Lady of Presentation and St. Gabriel’s parishes to the Seminary.  Here are the references in the 2013 Annual Report (p. 21):

Corporation Sole agreed to canonically transfer all of its rights, title and interest in Our Lady of Presentation Church, Rectory and parking lots and the St. Gabriel rectory and school to the Seminary. The properties have a collective appraised value of approximately $6,070,000 and a book value of $566,000.

During the year ended June 30, 2013, Corporation Sole transferred the Our Lady of Presentation property with an appraised value of $2,850000 to the Seminary to discharge a portion of the note. In accordance with the MOU, the Seminary agreed to forgive the remaining note balance of $1,038,000 which is included in gain on settlement of note payable in the statement of activities.

Long-term debt is about $100 million, but something funny appears to be happening with the debt for the Clergy Fund and clergy retirement costs.  They write, “Net unfunded clergy pension and post retirement obligations of $62.9 million and $36.4 million in debt owed to St. John’s Seminary represent the significant long-term liabilities…Accrued pension and other retirement costs decreased by $21.1 million. An increase in the discount rate, the impact of the Regina Cleri asset transfer and updated retirement age assumptions, somewhat offset by the adoption of new mortality tables, led to the decrease in the net unfunded liability.”  With more clergy reaching retirement age, presumably their medical and retirement costs and unfunded liability should be increasing, yet it is somehow miraculously decreasing.

Ongoing Sexual Abuse Costs
For the year, the total cost of sexual abuse settlements  was $1.73 million, plus there were costs incurred related to abuse prevention, outreach and other costs  of $3.07 million, for a total expenditure of $4.8 million during fiscal year 2015. When will this end?

1/3 of Parishes are In the Red
The 2016 Central Ministries Budget Plan informs us that 1/3 of all parishes are running an annual deficit. “Currently, about one-third of parishes are not self-sustaining with some requiring financial subsidy, either directly of indirectly, by the Archdiocese.”

Other than the above issues, the fiscal health of the Boston Archdiocese is just great! . The Boston Archdiocese is contemplating the idea of launching a major capital campaign to raise hundreds of millions of dollars (rumors have it targeted at anywhere from $100M to more than $300M), and it would surely take that amount of money to repay debt and unfunded liabilities, let alone provide for other long-term needs. Meanwhile, we hear many stories about struggles with the Disciples in Mission initiative (DIM), but that is a topic for another post…

22 Responses to Boston Archdiocese Income Declined $20M in Fiscal 2015; Lost $5M

  1. Joyful Noise says:

    Thanks for all this work, BCI. QUESTION: Where would the RCAB be without all the sales of parish property? Is that the sale revenue they mention in this report or is that revenue just RCAB and not parish?

    In other words, where will they be once they have sold off all the Holy Trinity’s and Mt, Carmel’s and St James and St Catherine and soon Our Lady of Victories etc?

    • Jack Davenport says:

      And what is your suggestion for asset disposal/repurposing? 280 parishes sound like the right number to you?

      • Joyful Noise says:

        Your response is unresponsive. I really was asking if the revenue from sale of parish property is entered and where? I really was interested in numbers if no sale proceeds were entered.

        I don’t know how to respond to “right number” of parishes. What does that even mean? I am horrified to think that there is even a “right number.” Is that controlled by Canon Law?

    • Good question. In principle, the money from the sale of a parish is supposed to go to the welcoming parish, and not to Central Operations. However, if you look at the example of St Gabriel and Our Lady of the Presentation in Brighton, those properties were given to St Johns Seminary to pay off a loan that provided funds for sexual abuse settlements. So, it is not entirely certain that the policy on paper is what is happening in practice. We will try to find out more if we can. It would be good for any parishioners of recently closed/sold parishes to ask that question of their pastors.

  2. Joyful Noise says:

    It seems that there was an express ruling by the Vatican’s Congregation for Clergy issued in direct response to our RCAB and referenced in this article:

    What seems clear is that Canon Law 121 controls and assets and liabilities go to the receiving parish and not the Archdiocese.

  3. Jack Davenport says:

    122 and 123 are also in the conversation.

    Catholics love “the rules,” however narrowly applied or interpreted. This is the same thinking that creates 12 year+ “occupations” in Cohasset.

    You seem reluctant to entertain a dialogue about the “right number of parishes.” Horrified by the topic it would appear. That’s a new turn on the ostrich in the sand approach to management but in combination with anonymous blog posts it seems to suffice for you. The rest of us can do the heavy lifting.

    • Jack, You are putting words in our mouth and opining with zero basis by suggesting we are “horrified” by a topic and hypothetical question you tossed out. Did it occur to you that we simply did not have the time to respond?


    • Joyful Noise says:

      Sorry, I was at a meeting and could not respond. I had a legitimate question about the financial report. I don’t have a financial background and had a question as to whether or not the sale of parish property was included as revenue to RCAB. Just a question. As far as “right number” of parishes, the choice of words does horrify me. What does “right” even mean? Is there a wrong number? Is that a canonical term or was it just a poorly chosen term?

      I do heavy lifting and most of it pro bono. As a parishioner of RCAB I have standing to ask what are the numbers if no proceeds from sale of parish properties are included.

      • Jack Davenport says:

        So you lack a financial background but that limitation doesn’t preclude you from carpet bombing the Archdiocese on the topic? Can we assume similar constraints on your knowledge of the law? Theology?

        Joyful, the old saying that “if you are not part of the solution you are part of the problem” rings solid with you. I’ll let you figure the rest out yourself. When you’re not donating your valuable time at meetings that is…

      • Joyful Noise says:


        Don’t know you at all and sorry that you feel that way. I honestly just had a simple question about the reading of the Financial Report. I know that BCI has this expertise as he has done an outstanding job on finances in the past. I do defer to those with specialized training. Finance is not my “thing.” Ironically, I expected folks to post that the Financial Report did not include proceeds of the sale of parish property in the event that there was a receiving church named. No one has said that still or even attempted to answer the question.

        I agree it is a hard question and perhaps one that we really don’t want to face. The thought that the solution of RCAB is to sell off parishes to “m” their books is not a long term solution..

        Not sure why you are so caustic and personal about pro bono work. At times it is focused on my church and at times other churches as well; at times it is focused on neighborhood issues. Why the sarcasm? I was really at a meeting.

        Don’t assume “similar constraints” on law, both secular and canon. Theology? Parochial schools etc so admittedly not my expertise.

        People try to be part of the solution. We all bring different skills to the table. Could be asking important questions is part of the solution.

      • Jack, Kindly stop insulting our readers and the bloggers. Your value add in this discussion has been zero. All you have done is ask a question and then insult people for not answering it, as if by virtue of you asking it, others should drop whatever they are doing to respond. Please take your comments elsewhere.


      • Jack Davenport says:

        What part of open dialogue do you object to? You hide behind an anonymous blog and tap into a few malcontents who feed you incomplete information that you disseminate with a tone that is routinely insulting and pejorative. Like all such bullies, you get weepy and flustered when you get called out. “Take your comments elsewhere?” Why? So you can be the one doing the carpet bombing? Occasionally people push back, friend. Sad that your insecurities have blotted out whatever intellect you might have once had.

      • You are completely WRONG. This blog post is about publicly disclosed information. Most people just don’t know where to find it or may not know how to sift through and understand it. Try writing to your elected officials with your questions and see what kind of response you get.


      • Jack Davenport says:

        Watch those insulting replies, BCI. I deal with elected officials all the time and find them quite responsive. Maybe it’s how you make the request? And surprisingly most aren’t hiding behind an anonymous blog. Funny how that works…

      • Ferde Rombola says:

        Jack Davenport, as a casual observer I can say confidently your remarks to both BCI and Joyful Noise have been consistently accusing and insulting. It appears to me like you are a mouthpiece for the RCAB. Care to verify that or deny it?

        Here’s something you are welcome to defend. Back when the settlement negotiations were gong on, I was working in a Boston law office. We had a client who was groped ONCE by a homosexual priest. He was a happily married man with children who had no history of psychological or any other complaint resulting from the grope. The incident was over 20 years old. He got $80,000.00 from the Cardinal. Right then it was clear to me the Cardinal didn’t care a whit about the cash he was throwing around. He just wanted to be done with the affair and it cost the archdiocese much more than it should have.

        BTW, there is a law on the Massachusetts books that says a charitable organization, when sued, shall be liable for no more than $25,000.00, The Archdiocese was shielded by that law. Why did the Cardinal give 80 grand to a guy who was not damaged by his 20 year old experience?

      • Jack Davenport says:

        A new player on the scene! The distinguished legal scholar Ferde Rombola! He answers his own question but fails to understand the nature of a legal settlement. But his biggest miss is the assertion that the alleged priest who allegedly “groped” his client was a homosexual. The Globe and others have assured us that the abuse scandal has nothing to do with homosexuality. Get with the program, comrade, or are you too busy getting ready for Shillary or something?

      • Ferde Rombola says:

        The Boston Globe assured you, did it? Do you mean the pro-homosexual agenda and the pro-abortion Boston Globe? If that’s where your getting your information, you’ve been brainwashed. I have a better resource for you.

        The John Jay College of Criminal Justice did an actual professional investigation of the matter which is about as far away as one can go from the odious subjectivity of the Boston Globe. The College concluded 81% of the alleged abuses were between adult males and teen age boys. In case you can’t figure it put for yourself, that describes homosexuality. If you’re still in the market for assurances, I assure yo the priest in my story was, indeed, a homosexual.

        Now, what don’t I know about “the nature of a legal settlement?” And what do you know about it. What are your qualifications? Don’t duck the questions, pal, or change the subject.

      • Ferde, thanks for calling out the John Jay study to correct “Jack Davenport”. His arguments, if they can even be called arguments, are baseless and his comments insulting. We have suggested he take his viewpoints elsewhere and hope he gets the message and does so.

  4. Little Red Hen says:

    BCI, can you tell us how much of the Central Ministries budget goes to the Catholic Schools Office? (In other words, is the archdiocese paying Kathy Mears as much as they paid Mary Grassa O’Neill?)

  5. I Can't think of a Good says:

    I am curious about two things:

    1. I notice 29 employees making 100k plus, what percentage is that of the overall lay staff.

    2. I notice Ms. Driscoll is making 300k, I thought I read that her prdecessor made 215k in 2011, by my figuring if the increase per year to that position where a 3% cost of living she would be making around 250k, where did the extra 50k come from…especially given that those employees making under 150k got a raise of only 1.5% which is well below cost of living.

    Thanks in advance and feel free to correct my math if you determine any errors or misreading of the documents

  6. Liam Leahey says:

    If you’re looking for a place to cut, let’s start with the Catholic Schools Office. Three schools are set to close this year, With such inept financial oversight bordering on gross negligence / incompetence, why is the RCAB continuing to pay such high salaries. Simply move the financial oversight back under the finance department and use the savings to actually help the schools LL

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