Diocese ends year with operating deficit

The Diocese of Worcester has faced and is addressing some challenges, Bishop McManus said in his letter accompanying the Annual Report for the fiscal year ending Aug. 31, 2019. However, he encouraged people to look beyond the financials to “the numbers that reflect the lives we touch.”
The diocese reported a total operating deficit, excluding investment gains and property donation, of $1,648,857. After including unrealized gains, realized gains, and a property donation to Catholic Charities, the total operating deficit stood at $1,482,516, according to the financial activities report.
“While I recognize that a cold, hard look at our financials tells a story of deficit spending which we are working to turn around, the human face that goes with the story is one of hope and encouragement,” Bishop McManus says. To that end, nearly two dozen areas of ministry are quantified to support the report’s theme “making the presence of God’s love a reality.”
For example, 9,452 people found help at Catholic Charities’ food pantries; $759,257 in tuition assistance was awarded to Catholic school students; and support was given to 1,857 catechists who taught about the faith to 13,940 children and teens.
The complete text of the Bishop’s management letter accompanies the Annual Report on Financial Activities prepared by the diocesan Office of Fiscal Affairs, along with an impact report from many of the diocesan agencies and Partners in Charity recipient agencies. The report is inserted in this week’s Catholic Free Press and has been sent to parishes for distribution at Masses this weekend. It is also posted online at worcesterdiocese.org/fiscal-affairs.
Bishop McManus recognizes that the diocese faces some specific challenges.
“Central Catholic Schools ended the year with significant deficits and, as a result, we are in our final year of operating St. Bernard Central Catholic High School as a diocesan school.” The report shows that the Central Catholic Schools total deficit was $1,142,161, compared to last year’s deficit of $651,668, before Partners in Charity supplemental funding of $450,673 was applied.
The bishop continued, ”While priests’ retirement care costs are lower than in recent years, the Priests’ Retirement Care Task Force is working to identify alternative funding sources and enhanced cost controls, both of which will bear fruit in the coming years.” As reported, retirement care ran at a deficit of $290,715, down from $414,364 the previous year.
The bishop’s letter also acknowledged that alternatives have been identified to address the operation of St. John Cemetery System and “the challenges it continues to face with its 14 cemeteries in a climate where more families are seeking cremation of their deceased loved ones.”
The letter also recognizes the variety of sources of income that support diocesan operations, including Partners in Charity, Celebrate Priesthood, cathedraticum from parishes and investment income. He also acknowledged that the Legacy of Hope capital campaign, which was announced in 2018, has experienced strong response totaling $15.6 million in donations and pledges as of January 1, 2020. Bishop McManus writes, “This financial struggle in parishes, often related to deferred maintenance costs, is why strengthening our parishes through a successful Legacy of Hope capital campaign is so crucial and the fundraising costs (on page 3 of the report) reflect our commitment to its success.”
Included with the Annual Report is a review of the 2019 Partners in Charity Appeal which raised 95 percent of its $5 million goal in cash and pledges from 14,647 donors as of Aug. 31, 2019. The review also provides a breakdown of the 5,886 donor households who enrolled in the appeal’s eight leadership giving societies. The review also shows a breakdown of how Partners donations were used during fiscal 2019 by the 27 agencies and ministries which were supported by the annual appeal.
The Office of Fiscal Affairs also noted that this is the first report to follow recently established guidelines for not-for-profit financial reporting. As a result, the audited report is still being finalized to reflect the new guidelines. Examples which can be found in the Supplemental Details report include: isolating fundraising revenues and costs, and the presentation of gross revenues and expenses for agencies and ministries which had been reported at net in prior years.
As soon as audited financials are completed, they will posted online together with the annual report at worcesterdiocese.org/fiscal-affairs.
The financial report does not include the financial results of individual parishes, which are posted online at worcesterdiocese.org/fiscal-affairs, or of parochial (parish) and independent or private Catholic schools.

– Any questions about the reports can be directed to Paul Schasel, director of fiscal affairs, at 508-929-4333 or by email to pschasel@worcesterdiocese.org.