Covid-19 new cases are spiking in about half of the United States. Here in “hot-spot Florida” there is anger and discouragement over the fact we may have “opened” too soon. China is experiencing local flare-ups in several of its markets in large cities. Unemployment in the United States sits at Depression era levels. Another government stimulus for American workers appears to be some ways off, according to this discussion of possibilities from Forbes on June 13. Depending upon which think tank you subscribe to, the consensus seems to be that of those across the country who are currently unemployed, 50% of them will discover that their jobs have been permanently eliminated.
How does this upheaval impact the many Catholic parishes across the United States? The best word at this juncture may be “unevenly,” since there was significant imbalance of resources among parishes and dioceses before the Covid-19 reached the American shore not to mention various spiritualities and priorities. One of our readers offered the thought that we might see the end of the “parish structure” during this time. I am not quite that pessimistic; but my gut tells me there may be an exodus toward smallness. I have seen small churches in economically challenged circumstances function and even thrive, as in the small shark-hunting coastal village of Saliverry, Peru in 2014. In Saliverry we unexpectedly attended a family memorial Mass and the folks came over to thank us for coming! Meanwhile, outside the same church, the CYO or teen group, which identified themselves as young missionaries, was packing food to take to poor parishioners. [Later, when we were surrounded by a “tough” group of older teens near the waterfront, I whispered to Margaret in English, “Maybe it’s more teen missionaries.”]
The most urgent question across the board—aside from sacramental practice-- is survival of diocesan and parish structure in the sense of protecting long-time competent employees and continuing the essentials of the Catholic mission. Naturally, our thoughts turn immediately to cash flow since our Church employees have families to feed and there are thousands upon thousands of citizens who would literally starve without parish food outreach and the works of Catholic Charities. This was true long before the virus. I counsel on Fridays from a church site which is feeding hundreds of families every other week. If we have learned anything from Covid-19, it is that bull markets on Wall Street do not translate into the everyday life of modest and low-income Americans.
As I posted a few days ago, there is not much journalistic reporting on the current fiscal condition of the U.S. Church. With the Orlando, FL, region Covid-19 cases spiking dramatically, most media coverage here is devoted to public safety, and to the “I can’t breathe” memorials and protests. In truth, current Church financial condition are hard to gauge, in part because we have no idea how long the virus will last. Josephine Everly of the [Catholic] Leadership Conference believes that “it will be 18 to 24 months before parishes, schools and other Catholic institutions see a return to normal levels of giving.”
The assumption here is that there will be a return to normal. I told my friends some months ago that some semblance of a return to modest church attendance will not be determined by either the Church or the State: it will happen when mothers feel safe bringing their children into enclosed populated spaces, and it won’t happen one day sooner. In other words, no routine till a safe virus is developed and the country is vaccinated. I caught an article in the colorful Patheos journal that questioned whether most Catholics would come back at all, and another along the same lines in The Catholic Thing.
Another factor of the post-Corona Church is the resolution of outstanding abuse claims and diocesan bankruptcies, which of course dates back prior to Covid-19 in most cases. Since I last posted five days ago, the dioceses of St. Cloud, Minnesota, and Rockville Center, Long Island, have declared bankruptcy. [A curious point: five of the six dioceses in Minnesota have declared bankruptcy; three of eight in New York State.] There are now about 25 [of 185] dioceses in bankruptcy across the country. If I were a member of a diocese in financial limbo, and especially an employee or a parent with children in the parish school, I would want at least some indication from the chancery and the parishes about the outlook for the immediate future. Like most businesses in trouble, churches tend to lead with good news, tenuous as it may be. Several diocesan websites are posting letters to the effect that everything will be done to bring all school children on campus. [If I can brag on my own diocese, our parents will have the choice of classroom or on-line. This is an inspired judgment call; would you lay down bets for a major sports team scheduled to play in August?]
I learned from a former student this week that his parish’s director of adult faith formation was dismissed. My mind jumps to several conclusions: that the parish in question is in financial hot water, that the ministry of adult formation is sitting dormant, and quite likely the parish did not file for federal salary protection, unlike 13,000 parishes across the country. I might be stone cold wrong, but if I belonged to that parish, I would inquire about whether everything is being done to retain good lay ministers and teachers. I have read plenty of on-line church bulletins from around the country that encourage the faithful to use EFT for Offertory giving. But I have yet to see any pastor admit that parish finances may make it necessary to eliminate the following positions [fill in the blanks].
I am going to move to different streams for an educational entry or two and pick up this stream late next week. I hope to have a book review and a few other entries before returning to Covid-19. I am afraid that is not going away any time fast.
I wrote at some length in the first installment about the pressure of keeping Catholic churches and schools operating during and after the Corona virus and its financial pressures. I was prompted to research this when a Catholic school in my own diocese was closed on May 20, a rare occurrence [see previous post below.] I am grateful for several friends who filled me in some details, which not surprisingly center around financial problems and several years of confusion among parishioners and school parents how acute the problems were. I will return to this below.
However, since the last post, another closure was brought to my attention by a regular reader and longtime friend from seminary days; this closing occurred in the Paterson, NJ, Diocese. This particular parish is staffed by the Franciscan Friars of the East Coast Province to which I belonged for twenty years. I have two links to the North Jersey news site, story 1 and story 2. The second link is intriguing because after the closing, the Franciscan pastor came under significant fire, with the parents demanding a full audit of the parish and school financial records for the past several years. This audit is currently in process; I did not get the impression that the audit would save the school, but rather it may serve as a useful lesson to this and other parishes about recognizing danger signals in monetary and enrollment matters. It also struck me that regular such audits would probably be more useful on a periodic basis for parishes planning long range viability, particularly parishes with schools. Typically, an outside audit is undertaken, and its results made public before capital campaigns, for example, where soliciting large gifts is indispensable.
There are several things in common between the Paterson, New Jersey, closing and the Lakeland, Florida school closing I described in the last post. In both cases  parents described themselves in social media and local news outlets as being shocked and uninformed;  student enrollment was modest at best, perhaps around 200 and falling;  well-meaning parishioners did not have a gut sense of how expensive a school is;  the local communities seemed disengaged from the national challenges to Catholic education across the country, too parochial, if you will: and  there was an expectation of emergency financial assistance from their respective dioceses.
I posted a few days ago that Bishop David Zubik of Pittsburg was leading his diocese in a review of diocesan school operations with an eye toward insuring that all Catholic schools were solvent and self-supporting. Apparently, the impact of Covid-19 accelerated the urgency of his task force, and yesterday, between my last post and this one, Bishop Zubik closed two schools and consolidated two others. The diocese’s website also addresses long range planning to avoid crisis closings in the future: “The diocese is also announcing that as of July 1, 2020, South Regional Catholic Elementary School, Inc. will be formally established, with a governing board of clergy and lay leaders representing each of the parishes and parish groupings in the region. The governing board will be responsible for strategic planning and ensuring that diocesan Catholic schools are properly resourced and sustainable for generations to come. The schools will be supported by a regional office headed by a regional administrator responsible for overseeing the school programs.” There is no mention of fiscal support from the Pittsburgh diocese, but rather, something akin to an “early warning system.” It is possible that such a board could recommend capital campaigns for endowments for tuition relief assistance, though by Canon Law a diocese is a corporation sole, i.e., it is owned and managed by one person, the bishop, who can change plans and arrangements put in place by his predecessors.
Are Dioceses insensitive to the needs of local churches, something I hear far too often? Dioceses are expensive to operate. My home diocese was nationally recognized last year for its detailed audit reports and transparency to its members. If you dare, you can review Orlando’s 2019 audit report. It is easily accessible on the diocese’s webpage. I have read it several times, including this morning, and I finally decided to eventually walk it over to a true professional soon to understand the terms and categories. As complicated as an audit is, to make it publicly available is an excellent step in the right direction for all dioceses in the United States, where trust has been eroded by the child abuse scandal and its fiscal costs, as well as the closings of schools and parishes around the country.
If you have never seen a diocesan spreadsheet, the size of the numbers is misleading. The trick is understanding that so much of the money is spoken for. Under previous bishops this diocese extended money in various ways for building projects, caught up in the wave before the Great Recession. For example, Orlando has about $70 million in bond obligations extending into 2034, as well as extensive loans outstanding to various parishes and institutions. The diocese is self-insured and carries a portion of that cost with its employees. The audit shows that about half of the $50 million in bequests [from wills and independent gifts] on the books is restricted to specific institutions, and in theory at least, cannot be transferred to general operations. The report shows proceeds from investments, so to some degree any diocese is subject to the market, depending upon exposure. The important thing to take away from any diocesan report is that most expenses are not the sort that become “instantly liquid” in a crisis for local bailouts. Hence there is very little that can be done when the churches and schools are closed and collections and tuitions dip, as many continue to be with Covid-19 threat.
The day to day office operations of the diocesan mission are funded in part by the annual diocesan appeal, called by different names. Our Bishop’s Appeal here was conducted just before the lockdown; it remains to be seen how the virus impacted the campaign. This annual campaign is conducted in a more straightforward fashion than years ago when it was called the “Catholic Charities Appeal” and donors assumed their gifts went to direct services. The annual appeal pays for administrative support for the most part. I joke with my wife every year that the media advertising for the campaign features a child in a Catholic school uniform every ten seconds when in fact the campaign does not fund tuition assistance. The staff of Catholic Charities of Orlando would be funded, for example, but the medical providers in its clinics—including myself in two locations—are working pro bono.
In the final analysis, most paid employees in the diocese do not draw their regular paychecks from the chancery, but rather, from the parishes and schools where they work. The future for many of them is not consoling. Covid-19 cases are spiking at a record level here in Florida and elsewhere. Word comes this week from the Federal Reserve Board that high unemployment across the country will be with us for a long time, well into next year, and that large infusions of cash from Congress and the Federal Bank will be necessary to keep us from spiraling deeper into recession. Can we protect the jobs in the Church? See the next post in this series in a few days.
I am used to seeing parish schools close. Back in the 1970’s, as a college chaplain, I worked in the confines of the Albany, N.Y. diocese which, like many cities in the Rust Belt, was beginning to shed parochial schools. For the post-World War II American Church, closing a Catholic school still carried a good deal of shock value, and this was true in Albany. After several waves of closing angst, the bishop at that time supposedly said to his advisors, “I’m not going to die with every death.” I suspect that is the private mantra of many northern bishops about school and parish closings even to this day.
The closing of a school, when I hear about it in Catholic social media, always saddens me. However, the closing of a Catholic school in the “growing Sunbelt” gets my attention. The closing of a Catholic school in my own diocese is a shocker. It did happen about two weeks ago, in Lakeland, Florida. I remember doing catechetical workshops for the diocese in that facility around 1990, and I have been friends with the present pastor for over thirty years. As he is the church officer who had to make the public announcement to the parish-school community and to the media, he has become [unfairly] the target of some social media trashing, although on the whole the transitioning of students to three other local Catholic schools seems to be progressing as well as can be expected.
The immediate cause of the closing as reported by the Diocese of Orlando Office of Schools is a $500,000 projected shortfall for the coming school year, the result of a decline of 40 student enrollments, coupled with Covid-19 factors and an outstanding mortgage of at least $3 million. That constellation of factors sounds compelling enough to warrant the closing, social media critics notwithstanding. There are bigger takeaways from my local experience, though, that bear significantly upon all Catholics, and particularly those who work for the Church today or did so in the past.
I knew that two schools had closed earlier this spring in the Fall River, Massachusetts, diocese, so this week I checked to see what the national picture might look like. No major publication has catalogued the question nationally, i.e., tallied schools that were pushed over the brink by the financial complications of the Covid-19 pandemic, so the research here is piecemeal and incomplete. But in a truncated search I found the following number of school closings in specific dioceses: Newark, NJ , Diocese of Camden, NJ , Harrisburg, PA , Boston, MA , Wilmington, DE , Hartford, CN ( , Patterson, NJ  and Oklahoma City, specifically Lawton, OK . The Pittsburgh and Buffalo Dioceses, among others, are undertaking massive reorganization plans in which all schools will be required to demonstrate fiscal solvency. [A reader notified me of a closing in the Rockville Center, NY, Diocese; it had been slated to close before the virus and this was its last year, but thank you for the information.]
The Lawton, OK closing is a primer on how things can go bad. The school did have an endowment, the returns from which were providing tuition assistance to students whose family economies were seriously depleted by the virus. But the stock market tumble with the arrival of Covid evidently wiped out much of the endowment. While I did not see evidence that parishes are closing in great numbers, I did find evidence of significant parish staff layoffs even in the few affluent dioceses such as Los Angeles, and even here the vice was growing tighter. The LA Archdiocese advised parishes that loans at interest from the diocese were available to parishes to keep parish personnel but added that this aid could not be extended indefinitely. About 13,000 of this country’s 17,000 parishes applied for the federal Covid 19 employee salary assistance, but this, too, is a stop gap measure of limited direction. Anecdotally from social media I know of many furloughs and outright releases of Catholic lay employees, and closer to home, the director of the Catholic Charities clinic where I work was released.
Covid-19 did not of its own accord cause the wheels of the U.S. Catholic economy to fall off in many places; what it did was give us a clue of how shaky many of our enterprises and business methods truly are. The closing of a school—or a parish, for that matter—usually raises the same battery of questions from members that demonstrate significant gaps in understanding, and as a former pastor I heard these questions over forty years ago. These gaps of understanding can be clustered into two groups:  Why doesn’t the diocese save us, and  why didn’t we hear about our crisis earlier?
The first question assumes that the typical diocese is wealthy, i.e., flush in liquid reserves to dole out to parishes in regular support or emergency situations. This model of episcopal assistance was common in large urban dioceses, notably New York. Cardinal Spellman [r. 1939-1967]. The Wheeling, WV diocese receives income, for example, from an oil field deeded to the diocese many years ago, a secret revealed to the laity only last year when its bishop fell into disgrace for abusing individuals and diocesan resources. By the time I arrived in Florida in 1978, the practice for new construction of parishes and churches involved assigning a priest to a newly outlined parish territory, along with a tract of land and the mortgage for the land. Some few dioceses have stout reserves to draw from, but the odds are you do not live in one of them, few as they are. If I had to guess, you have a better chance of living in a diocese that is close to or already in formal bankruptcy. At least 20 of this country’s 185 dioceses have declared bankruptcy, before the virus.
Dioceses may show reserves on their books in some shape or form, but there are many asterisks to note, perhaps the most prominent being the unknown future costs of clergy abuse settlements. That the intensity and the unpredictability of the Corona virus caught so many institutions off guard suggests that there may be an absence of “emergency—break the grass” planning where determining how much reserve is sufficient. [Florida, where our signature theme parks are currently reopening, is currently averaging 1300 new Covid victims per day. Per Newsweek, 50% of states are seeing increases in daily case reports.] The Archdiocese of New York is losing $1 million per week due to closed churches and emergency Catholic Charities services. One more point I learned from the closings in my home diocese of Buffalo is the cost of a church or school no longer in use. A structure no longer used for ministry must still be insured, secured, and meet local safety ordinances until the diocese can be sold or demolished. The real estate value would still show up as an asset.
This last point is a good counter to those who argue that the Church should sell the “priceless” property of Vatican City and the great churches of Rome to save the world. They are assets, to be sure, but priceless and worthless mean about the same—they are not liquid assets for food banks or even paying the electric bill. In every major church I visited in Rome I received an appeal for financial assistance for urgent structural repair and upkeep. On a lighter note, selling expensive bishops’ mansions where they still exist may be marginally helpful, though the sale would be one-time infusion of cash. My wife and I have eaten with our bishops twice in their home, modest residences without a hint of bling. Selling our bishop's home would not move the needle very much.
Part 2 will follow in a day or two.