Boston Archdiocese in 'dire' financial shape, says Cardinal O'Malley
Apr 27, 2006
Boston Cardinal Sean P. O'Malley called the archdiocesan financial condition "dire" April 19 as he unveiled audited disclosure reports showing a $46 million deficit for the 18-month period ending June 30, 2005.
BRIGHTON, Mass. (CNS, Apr-20-2006) -- "It is quite obvious that the situation is urgent," putting programs and ministries at risk, Cardinal O'Malley said at a news conference held to release the financial disclosure reports and an archdiocesan fiscal recovery plan.
Also announced were plans to cut the deficit that include eliminating 50 positions, consolidating or merging programs, selling more property and making efforts to increase fundraising.
"I don't think there are any quick fixes but we are poised to stop the bleeding and hopefully our fundraising efforts will continue to generate the kind of capital we need," the cardinal said at the news conference held at St. John's Seminary in Brighton.
He expressed hope that by fulfilling the promise of financial transparency he made last October trust in the archdiocese will be restored.
In an April 19 letter to Catholics in the archdiocese that was posted on its Web site, the cardinal said "anger over the sexual abuse crisis and the closing of parishes" led to a decline in contributions.
"These numbers are one response of a wounded community, an expression of deep hurt and a measure of our need to remain focused on the long process of healing that lies ahead," said the letter.
A fact sheet posted on the Web site said that contributions to the annual Catholic Appeal dropped from $15.6 million in 2001, the year before the child sex abuse scandal broke, to $11.6 million in 2005, but have started to pick up.
Information released at the news conference showed that the archdiocesan expenses related to clergy abuse totaled $150.8 million prior to last June 30. Settlements with victims comprise 84 percent of that amount.
A report also posted on the site cited the sources of the funds to pay for abuse expenses. These included:
-- Donations earmarked for therapy assistance to child sex abuse victims, $2 million.
The cardinal said that no money from the sale of closed churches or from parish collections was used to pay for abuse settlements or for the ongoing support of victims.
The largest deficit the financial report shows is in the clergy pension plan. That deficit is a result of problems in the stock market and decreased interest rates, said archdiocesan chancellor David Smith.
None of the money from collections taken for the pension plan was misallocated, he said.
Currently there is a group of clergy studying how to improve the pension plan and a report on the situation was mailed to all the clergy in the archdiocese, Smith said.
A background report on the Web site said that the unfunded liability for clergy retirement and disability benefits was $135 million as of June 30, 2005. While the unfunded liability is considerable, it does not take into consideration future Christmas and Easter collections, which are the primary funding sources for clergy benefits, said the report.
Money gained from closed parishes has gone toward the lay pension fund, the parish revolving loan fund, new parishes that have been created through reconfiguration and grants to parishes in debt, said Smith.
Cardinal O'Malley said parishes were not closed merely to raise revenue. Aging clergy, the cost of building maintenance and the close proximity of many parishes necessitated many parish closings, he said.
Plans to reverse the archdiocese's financial woes were also unveiled at the news conference.
Jim O'Connor, who heads the archdiocesan organization and management review committee, said the archdiocese's central administration will be restructured and more functions will be handled in the archdiocese's five regions. The archdiocesan Cabinet will be reorganized, programs will be consolidated or merged and 50 positions will be eliminated.
Besides reducing costs, the changes will allow more services to be administered closer to the parish level, O'Connor said.
Cardinal O'Malley stressed that, despite challenges, the archdiocese was committed to planning for a future that is within its economic means.
"I hope our presentations today provide substantive evidence that the archdiocese is fulfilling the promise of transparency in word and deed and in living our faith," he said.
The cardinal added that despite the difficulties there are signs of hope.
He cited increased Mass attendance after years of decline; the participation of 8,000 Catholics in this year's Men's and Women's Conferences; an increased interest in vocations to the priesthood represented by higher attendance at seminary retreats; and more donations to the annual appeal, which after years of shortfalls has reached its goal for the last two year
Boston Archdiocese in 'dire' financial shape, says Cardinal O'Malley