|After Priest Scandal, Catholic Diocese's Financial Rebound Is Heavenly
November 13, 2008
When the Roman Catholic Diocese of Orange paid $100 million to victims of priest sexual abuse in 2005, it was the largest such settlement in history.
Only half of the settlement was covered by insurance; the other half had to come from the Diocese itself.
Backed into similar financial corners, other dioceses declared bankruptcy or sold church property to fulfill their obligations. Here in Orange County, there was talk about selling the Diocese's offices. "Those settlements left the Administrative Offices with a $50 million debt, depleted reserves and a deficit in undesignated net assets of $23 million," a Diocese statement said.
About a dozen people lost their jobs. Belts were cinched tighter. The Diocese took out a loan - and less than one year later, paid off the entire $50 million. How? By liquidating part of its $200 million investment portfolio and dipping into profits from its cemetery and other businesses.
A turn-around year, Bishop Tod Brown said at the time. And that turn-around continued.
The Diocese's audited financial statements for the fiscal year ending June 30, 2007 show that:
Its assets climbed nearly 17 percent between 2006 and 2007 - to $291 million from $248.6 million.
It nearly doubled its cash on hand, to $23.3 million from $12.3 million.
Long-term investments grew about 14 percent, to $209.9 million from $184.4 million.
The checking accounts for its parishes and schools grew more than 10 percent, to $136.5 million from $123.6 million.
What is it they say about confession being good for the soul? Perhaps it's good for the bank account as well.
(When The Watchdog showed off the Diocese's audit to a colleague who shares our passion for poking through financial documents, his eyes widened. "Who did you have to kill to get that?" he gasped. When we told him the diocese's audits and budgets were posted online, he was shocked. Churches are not required to disclose their finances. We commend the Diocese for this startling bit of financial transparency.)
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