ANNUAL FINANCIAL REPORT OF THE ARCHDIOCESE OF CHICAGO ISSUED
Overall financial health still good Parish outlook improving; Pastoral Center still facing large deficit
CHICAGO (December 15, 2005) The financial report for its fiscal year ending June 30, 2005, indicates that the Catholic Archdiocese of Chicago has once again increased its net assets. While the parishes and the ministries operating out of the Pastoral Center have shown some financial improvement, they continue to experience operating deficits.
The overall deficit reduction in operating revenue indicates that the comprehensive measures undertaken several years ago to reduce and even eliminate operating deficits in the future are succeeding.
“The Catholic Church of Chicago exists to spread the Gospel of Jesus Christ and minister to the less fortunate by sharing the gifts that Christ gives us for the salvation of the world,” said Francis Cardinal George, O.M.I., Archbishop of Chicago. “Archdiocesan leadership developed and implemented innovative plans to more successfully manage our revenues and expenses, so that we can continue to meet our mission in challenging economic times. Those plans are bearing fruit.”
Parishes Set Record for Donations
The 366 parishes, 218 elementary and 6 secondary schools that are supported by parishes and/or the Archdiocese cut their operating deficit to $25.2 million in fiscal year 2005, half the level of the prior year. The parishes increased their net assets over 2004 by 2.6 percent to just under $978 million. The improvement was primarily the result of a dramatic increase in contributions to parishes.
“Ordinary donations to parish operating funds, such as those received on Sundays, Holy Days, Christmas and Easter, reached a record $217.3 million up 2.6 percent from fiscal year 2004,” noted Thomas Brennan, director of finance for the Archdiocese. “When we look at a per person increase, the growth is even stronger at 5.5 percent. Unfortunately,” Brennan added, “that was offset by a 2.9 percent reduction in the average Sunday attendance for all parishes.”
Although the overall parish trend is improving, a number of parishes face significant financial challenges related to trying to maintain relatively large building complexes while still having smaller than average congregations and coping with difficult socioeconomic situations. Nevertheless, parishes completed $61.7 million in capital projects last year, and the net value of parish land, buildings and equipment rose 3.4 percent to $868 million.
Commitment to Education Remains Strong
School revenue increased 5.2 percent to $262.6 million while school expenses decreased 1 percent to $312.2 million. The $50-million difference was made up by subsidies provided to schools by parishes and by grants given to the schools from the Pastoral Center. Some Catholic schools continued to receive important assistance directly from the Big Shoulders Fund, which provides support to Catholic schools in the neediest areas of inner city Chicago.
Pastoral Center Shows Deficit
The Archdiocese’s Pastoral Center provides a broad range of services and support to the parishes and schools and the Catholic population of Cook and Lake counties they serve. For the year ending June 30, 2005, the Pastoral Center experienced a drop of $112.1 million in its net assets, largely due to a growth in liabilities and a continued, but much reduced, operating deficit. The primary reason for the large overall deficit was an additional provision in the Archdiocesan financial report that reflects the sharply higher expenses related to the pension program. In addition, a high level of grant support to the parishes and expenses related to the Archdiocesan insurance program contributed to the deficit.
“We use the discount rate to calculate the present value of future pension payments, and that discount rate has led us to increase our liability for accrued pension cost by $90.5 million in the past fiscal year,” Brennan explained. “We are examining the structure of our pension plan, its funding and the benefits offered to see how we can better manage this liability.”
The Archdiocese continues to resolve claims that have been filed for past instances of sexual misconduct. During the past fiscal year, the Archdiocese spent $4.4 million to settle various claims.
“No contributions made to parishes, schools or the Pastoral Center are used to fund misconduct settlements,” Brennan insisted. “This money is recouped from the sale of undeveloped land and insurance.”
A few years ago, the Archdiocese implemented measures to reduce spending at the Pastoral Center, and these measures are working. In fiscal year 2005, Pastoral Center spending was down 1.4 percent from the prior year.
“By reducing spending in many areas, the inflationary increases to salaries and benefit expenses were offset,” noted Brennan.
An important source of revenue for the Pastoral Center is the Annual Catholic Appeal. Because of a pilot project initiated in some parishes, donations to the Appeal increased by almost 15 percent to $6.6 million. The Pastoral Center also experienced a 13 percent increase in general contributions to just over $1.4 million.
“We thank the priests, religious, staff, volunteers and all parishioners and donors for their continuing commitment and generosity to the Church of Chicago,” Brennan stated.
The complete Annual Report of the Archdiocese of Chicago is an insert in the December 19 edition of The Catholic New World and can also be accessed through the official web site of the Archdiocese of Chicago at www.archchicago.org.
The Archdiocese of Chicago serves approximately 2.4million baptized Catholics who live in Cook and Lake counties in northeastern Illinois. The Archdiocese is headed by Francis Cardinal George, O.M.I., Archbishop of Chicago. It employs 14,976 people in its parishes, schools, charities, seminaries, cemeteries and administrative offices.