New Church Foundation Has a Multiple Mission

By Kelley Bouchard
Portland Press Herald [Maine]
November 14, 2004


Mission statement: "The Catholic Foundation of Maine is committed to providing Catholics with the opportunity to financially support the vitality of parishes and other Catholic organizations, institutions and ministries within the state of Maine now and in the future."

The first church organizations to begin developing endowments through foundation are St. Louis Parish in Fort Kent, the Christian Life Center in Frenchville, St. John Parish in Bangor, St. Joseph Parish in Gardiner, St. Peter and Sacred Heart School in Auburn, St. Charles Borromeo Parish in Brunswick and Notre Dame de Lourdes Parish in Saco.

Notre Dame de Lourdes Parish in Saco would like to add classroom space, a teachers' lounge, perhaps even a gymnasium, to its 53-year-old school building on Beach Street.

The new Catholic Foundation of Maine may help realize those goals, although some church members question the foundation's mission.

The foundation was established by the Roman Catholic Diocese of Portland to encourage and protect contributions to the church amid a national priest abuse scandal that has bankrupted other dioceses. The foundation is like others across the country, started to insulate certain church assets from liability.

Incorporated last year, the Maine foundation is just taking root now, as Bishop Richard Malone oversees the consolidation of the state's 135 parishes and the reorganization of a diocese hit by changing demographics, dwindling clergy and greater competition for financial resources. The foundation is overseen by a 21-member board of directors from all over Maine, including 17 lay people.

The Saco parish is one of seven across the state that are developing endowments for specific projects to be funded through the foundation. Any money raised through the foundation would be off-limits to anyone, including victims of sex abuse, who filed a lawsuit against the diocese or any of its parishes.

And while a 1997 Maine court ruling has proven to be a significant barrier to priest-abuse lawsuits in this state, the ruling is being challenged in a case that threatens to open the Portland diocese to greater financial liability.

The foundation has no endowments at this time, but church officials say the expansion project at Notre Dame de Lourdes School in Saco has a potential donor who has offered to make a significant lead contribution.

The school has an active parent group that raises $60,000 annually for various school projects, including the addition of a preschool this year in an already cramped building. But the parish has larger goals for the thriving school, where the number of students increased from 114 to 140 this year alone.

"Our space is limiting us," said Sister Linda Mae Plourde, Notre Dame's principal. "We need to reach out to people. The foundation gives us a broader spectrum of people and businesses we could address. We lack the manpower to do that on our own."

Plourde said the foundation also makes the prospect of giving more attractive to people who might be concerned that their money could be used for other purposes, such as financial settlements to sexual abuse victims.

"They need to know what our needs are so their money can be channeled where they want it to go," Plourde said.


The foundation acts as a subsidiary of the diocese, said Frederick Naffziger, a business law professor at Indiana University South Bend who is an expert in church finances.

Some U.S. dioceses have incorporated their parishes as subsidiaries of the diocese, insulating each entity from potential liabilities of the others, Naffziger said. Other dioceses have established foundations for directed giving, including St. Michael the Archangel Parish in Portland, Ore.

That diocese filed for bankruptcy last summer as a result of the priest sex abuse controversy. According to parish members, St. Michael's Historic Restoration Foundation, established a year ago, is trying to raise $2.5 million to renovate the downtown church, which was built in 1901 by Italian immigrants.

In Maine, the diocese is financially liable for all its parishes. However, a 1997 ruling by the Maine Supreme Judicial Court found that the diocese cannot be found negligent for its supervision of a priest.

The case involved a priest who allegedly had a sexual affair with a woman who came to him for marriage counseling. Although it didn't involve child sex abuse, critics say the ruling has caused abuse cases to be dismissed, settled or not filed at all.


The ruling is being challenged by Michael Fortin, an Augusta man who won a $500,000 judgment in a child sex abuse case against a former priest in Kennebec Superior Court. Now Fortin is seeking damages from the diocese, claiming that negligent supervision by the bishop was partially responsible for his abuse. The state supreme court is scheduled to hear arguments in the case against the bishop Tuesday.

Naffziger said the new foundation would protect fund-raising efforts from any liability, whether the diocese or one of its parishes owes a contractor or is sued for damages ranging from a car accident to sexual abuse.

"It's a smart legal and financial strategy," Naffziger said. "They want to assure contributors that the money will be reserved for the specific purposes announced by the Catholic foundation. Creditors of the diocese or parish cannot reach those funds. They can protect their assets going forward."

Still, Naffziger said, the diocese and its parishes would continue to be financially liable for past debts and liabilities. He said the diocese could transfer some of its assets to the foundation, but it could not be done to avoid paying any legal settlement.

"There's a thing called fraudulent conveyance," Naffziger said. "They can't transfer money if the purpose is to defraud a creditor."

Frank Semancik, the foundation's executive director, said Bishop Malone has no plan to transfer any diocesan assets to the foundation. He said dioceses across the country have avoided transferring funds to Catholic foundations to guard against even the appearance of wrongdoing.

"That's just looking for problems," Semancik said, "from a perception standpoint and from a legal standpoint."


Semancik said there are about 70 Catholic foundations across the country. Bishop Joseph Gerry began developing the Maine foundation in late 2002 and it was incorporated in May 2003. Bishop Malone took over the foundation effort when he replaced Gerry in April.

A native of Cleveland, Semancik recently retired to Maine with extensive experience in corporate management and church foundations. He was ordained as a church deacon in June and started running the Maine foundation in August.

Shortly before that, Malone appointed an 18-member committee to look for ways to revitalize and restructure an increasingly diverse and cash-strapped diocese.

The value of diocesan investments fell from $70.6 million in 2002 to $68.9 million in 2003, according to diocese's reports. Freewill donations dropped by about $500,000 during the same period. And the diocese spent more than $2.7 million for settlements, victim assistance and legal expenses related to sexual-abuse allegations against 60 Maine priests and other church people from 1950 to 2003.

At the same time, the number of Catholics in Maine has fallen, from 264,000 in 1975 to 218,000 today. And the number of diocesan priests has dropped from 229 in 1950 to 103 today. They are spread thinly across Maine's 135 parishes. Some of them struggle to pay heating bills, let alone save for regular maintenance or major renovations.

The Catholic Foundation of Maine would help these parishes most, Semancik said.

In addition to shielding church finances from lawsuits, the foundation would encourage parishes to plan for capital improvements and programs. It would allow them to rely less heavily on the annual bishop's campaign, which collected a little more than $3 million in 2003 for immediate needs throughout the diocese.

The foundation also would allow its members to pool financial resources and get a higher return on investments from various endowments, Semancik said. While the seven pilot endowment efforts in Saco, Brunswick, Auburn, Gardiner, Bangor, Fort Kent and Frenchville all would target capital improvements, he said the foundation could be used to support church ministries as well.


That's how the foundation should be used, said Paul Kendrick, for advocate of priest-abuse victims and a member of Voice of the Faithful, an international Catholic reform organization.

Kendrick, who lives in Cumberland, believes the diocese worries too much about preserving its real estate and not enough about its ministry to poor, disenfranchised and spiritually hungry members of the Catholic community.

Kendrick said his repeated requests for information about expenses at the bishop's $1 million mansion on the Western Promenade in Portland have gone unanswered. As a result, Kendrick fears that church members will have little access to detailed information about the foundation, even with 17 lay people on its board of directors.

"It's not just their business, it's our business," Kendrick said. "To fund new doors and windows through a foundation seems kind of odd . . . A designated fund whose purpose is to carry on the mission of the gospel is a good thing. An effort to move things around to shield church finances and divert them away from victims of priest abuse would be wrong."


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