How Covid-19 Is Reshaping the American Church-2

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 [1] parents described themselves in social media and local news outlets as being shocked and uninformed; [2] student enrollment was modest at best, perhaps around 200 and falling; [3] well-meaning parishioners did not have a gut sense of how expensive a school is; [4] the local communities seemed disengaged from the national challenges to Catholic education across the country, too parochial, if you will: and [5] 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.