Archdiocese Reports Operating Losses for Parishes, Central Operations

Crain's Chicago Business
April 8, 2016

http://www.chicagobusiness.com/article/20160407/NEWS07/160409862/archdiocese-reports-operating-losses-for-parishes-central-operations

Holy Name Cathedral in Chicago

The Archdiocese of Chicago has tightened its belt considerably over the past few years, but the Catholic Church's central operations here still report a negative net worth of more than $45 million, according to its fiscal 2015 report.

Its finances reflect the church's myriad challenges, including funding underattended parishes and schools, increased pension obligations for retired priests and the ongoing cost of settling sex abuse lawsuits.

The archdiocese said its main services division reported a $4.6 million ongoing operating loss for its fiscal 2015. The division, called the pastoral center, includes administrative functions for the archdiocese and financial support to needy parishes in the city and suburbs.

The archdiocese's 351 parishes, which span Cook and Lake counties and report their budget separately, recorded a combined $58.8 million loss in 2015, up from a $49.9 million loss in 2014. Parish collections declined slightly in 2015, to $214.4 million, from $215.9 million in 2014.

(See the reports below.)

The pastoral center loss has narrowed significantly over the past several years. In 2012, the ongoing operating loss was $75.6 million.

The archdiocese attributes the improvement to staff cuts in the division and reduced subsidies to struggling schools. That reduction is partly due to the closure of 23 schools since 2012, plus financial support in the form of scholarships from the Big Shoulders Fund, a separate nonprofit that raises money for Catholic education in Chicago.

The archdiocese operates 193 elementary schools and 36 high schools.

When other factors are added—including depreciation of the archdiocese's assets, the interest it pays on borrowings and the insurance and retirement benefits it must pay—the pastoral center recorded a $60.8 million loss from operations in 2015.

Overall, the pastoral center's net assets stood at negative $45.1 million. Net assets declined by nearly $126 million in 2015, largely because of actuarial changes based on increased life expectancy that drive up expected pension payments.

The pastoral center's net worth does not include the archdiocese's vast real estate holdings. The archdiocese as a whole reported assets valued at $3.5 billion, mainly in land, buildings and equipment. The overall Archdiocese's net worth stood at $1.9 billion at the end of fiscal 2015.

The archdiocese's pastoral center also says open sex abuse claims comprise "a significant portion" of its $168.6 million contingent liability. The church here already has paid more than $140 million in settlements over the past 30 years, most of which stem from events prior to 1992.

"The financial cost of misconduct has had a significant impact on our ability to support the mission of our church and is one of the drivers of our negative net worth," the archdiocese wrote in a statement accompanying the report.

It also acknowledged financial pressures wrought by changing demographics and old churches with dwindling parishioner counts.

"Some of some of our parishes and schools have low parishioner and/or student counts, unstable operating results and unsustainable capital repair needs," the statement said.

The archdiocese is in the midst of a major overhaul of its parish structure, an initiative it calls "Renew My Church.” It may result in the closure or combination of dozens of parishes.

“While we do not have specific plans for closures, we do estimate that upcoming planning efforts will likely result in 240 to 270 parish configurations versus 351 parishes today,” archdiocese spokeswoman Susan Burritt told the Sun-Times.