(page 5 of 8)
Taking the Collection
Two diminutive nuns, Dominican sisters dressed all in white, make their way up the wide center aisle at St. Mary of the Angels in Bucktown. Fishing in their own way, they stretch over the edge of each pew, holding forth a long, thin pole with a mesh basket at the end. The scattered parishioners at this 11 o’clock Mass-a diverse mix of perhaps 200-slowly fill up the baskets with envelopes, checks, and (mostly) cash.
The archdiocese says that 90 cents of each dollar in that basket-and in the dishes and baskets being passed around each week, all over the area-will stay to support the various programs at the church where it is collected. The rest goes to the Pastoral Center, the headquarters of the archdiocese.
“It’s a straight 10-percent assessment,” says Tom Brennan, the finance director. “It doesn’t matter if it’s a small parish, a large parish, a city parish, a suburban parish.” The assessment had remained at 6.5 percent for decades until 1991, when archdiocese officials determined that they needed more revenue, due mainly to increasing demands from hard-pressed parishes.
The Archdiocese of Chicago has an annual operating budget of about $1 billion, a figure that combines the budgets of all parishes with other operations overseen by the Pastoral Center. Much of the revenue from this complex group of business units never passes through the center. Tithing from the parishes last year contributed about $22 million to the main office.
At $317 million, a category entitled “charitable activities” is the largest single expense, and it includes the self-funded Catholic Charities budget of $169 million. (Catholic hospitals and universities run independent of the archdiocese.) “School programs” last year cost the church more than $300 million, and general operations of parishes were recorded at $246 million-both financed largely by collections and tuition. Maintenance of cemeteries with their nearly 20,000 burials per year is a significant expense ($45 million), as are central administration costs, which include the 350 or so employees at the Pastoral Center, and which totaled $148 million in 2004. Last year, the archdiocese ran a deficit of just over $8 million (an improvement on 2003’s $88-million shortfall, largely the result of making provision for future pension liability).
Considering that each component of the church depends ultimately on the sanction of the head office in Rome, the overall operation is rather decentralized. “There are 372 CEOs-the priests-and each parish has its own system of internal controls,” says Scott Steffens, a lead partner on the archdiocese account for Deloitte & Touche, the accounting firm that has handled the archdiocese’s annual reports for more than 50 years. “How they collect Sunday cash, and how they run their business-to audit that would be logistically impossible. The archdiocese sets guidelines for them, but essentially they run their own parish.”
The finances of the archdiocese itself are subject to fluctuations in the general economy that sound surprisingly worldly. In 2004, the archdiocese’s investment portfolio totaled just over $1 billion, divided into 13 percent cash (including short-term investments and money market accounts), 60 percent common stocks, and 27 percent fixed income securities. The $128-million net return for last year was markedly better than in 2003, which saw gains of less than half that much.
Because many of the church’s assets cannot be liquidated (see Holy Land, page 89), decreased cash flow and stress on the portfolio are especially burdensome when the economy falters. What’s more, the number of churchgoers, as Steffens puts it, has “a direct correlation” with revenue. Already flat, attendance showed a sharp decline after the most recent abuse scandals. It has bounced back up, but the overall picture is hardly robust. For 2003, according to the archdiocese, attendance at Mass declined by 2.8 percent-an improvement over the previous two years-but individual donors increased their giving by 3.6 percent.
“It hasn’t been as bad as it might have been, because of what I call the 20/80 rule,” says Charles E. Zech, who runs the Center for the Study of Church Management at Villanova University outside Philadelphia. “About 20 percent of the people give 80 percent of the revenue, and so the fairly steady revenues mean that the big donors are maintaining or increasing their contributions even if smaller donors decrease theirs or stop giving altogether.”
Perhaps the biggest problem, Zech says, is the revenue system. “Catholics rely on the collection plate at the Offertory, and the people tend to give what they feel they can afford that week,” he says. “There’s no long-range planning. And what if the people aren’t there that week?” Catholic collection methods, Zech says, are well behind those of Protestants in innovation, transparency, and planning-the Protestants, he says, “get folks to make a commitment to give.”
Worse still, according to Zech’s research, is that “Catholics are low givers to begin with,” with typical households giving about 1.3 percent of their income-half as much as Protestant households.
The economic ebb and flow often forces the archdiocese to make tough decisions, such as closing schools or parishes. In May, following months of examination, the archdiocese announced 40 layoffs at the Pastoral Center-a 6-percent personnel reduction, but part of a plan to eliminate $8 million from the operating deficit.
“We’re just like any business,” says Tom Brennan. “We have employees with benefits, with pension programs, with medical, with salary. We see heating costs going up. We see electrical costs going up.”
The archdiocese is not required to send its financial statements to Rome, although every five years the cardinal travels there to report on the health of his congregation. Each year, the Chicago archdiocese-like a parish under the biggest archdiocese of all-sends a contribution to the Vatican, $400,000 last year (“less than 20 cents per Catholic in Chicago,” Brennan points out). And unlike a business, Brennan continues, “you can’t measure the effectiveness of our operation in terms of whether we have a surplus or deficit. You don’t just introduce a new product or raise your price. Can’t really tell until Judgment Day whether it’s been successful or not.”