IFRC May/June Consultation Materials

June 1, 2009

IFRC

There are 6 regional consultations for the Improved Financial Relationship Committee (IFRC) in late May and early June 2009.

At the meetings, there is a 35 minute video overview of the IFRC (text below), a handout of FAQs (linked below) and then 75 minutes of Q&A.

Nearly 400 Catholics (priests, parish staff, parish council members) have registered to attend these sessions.

Please CLICK HERE FOR THE IFRC HANDOUNT OF FAQs .

Please see below for the text of the video. If you would like a copy of the video to watch with your parish councils, please contact George Martell at The Catholic Foundation.

IFRC CONSULTATION VIDEO – TRANSCRIPT

Greeting by Cardinal Seán

Hello everyone. Thank you for your interest in the work of the Improved Financial Relationship Committee and for your service to the Church.

The IFRC is one of the important initiatives underway to strengthen the parishes and central ministries of our Archdiocese and to put them both on more solid financial footing. We hope that it will result in a model of financial relationship that is more helpful to our parishes and central ministries, more transparent, more equitable and simpler. Furthermore, we wish to foster a greater sense among Catholics throughout the Archdiocese that we all share in the same mission. We have a responsibility to provide for each other and to share our resources for the greater good.

The proposed new model of financial relationship calls for a greater investment of Archdiocesan resources into helping parishes increase their offertory and grand annual collections. After parish income rises as a result of this investment, the proposed model asks parishes to share a percentage of their increased income to support the Archdiocese’s central ministries. In this way, both parish ministries and central ministries can expand their programs that pass on our faith and serve those in need.

I encourage you to learn about the good progress of the IFRC, to share your feedback with the Committee, and get involved in this initiative so that together we can strengthen our Church’s financial and spiritual foundation.  

What is the Archdiocese of Boston?

Thank you Cardinal Sean. Hello. My name is Scot Landry. I’m the Secretary for Institutional Advancement for the Archdiocese of Boston.

Before we discuss the specifics of the IFRC, let’s provide some background and consider the question of what is the Archdiocese of Boston, how are we structured, and what is the shared mission of all Catholics and parishes within our Archdiocese?

First, let’s take a look at Church across the world and throughout time, courtesy of our friends at CatholicsComeHome.org.

[Video of Catholics Come Home]

Our Church’s mission and impact across the world is so powerful. And so is ours here locally in the Archdiocese of Boston.

A diocese is a portion of the people of God that corresponds to a specific territory. An Archdiocese typically is a diocese that is larger or historically significant.

All dioceses are entrusted to the care of a diocesan Bishop and in the case of an Archdiocese, an Archbishop. Some Archbishops of major Archdioceses, like Boston, are often named Cardinals. There are typically only about 120 Cardinals in active ministry of the World and we’re proud that Cardinal Seán is among them.

All bishops are successors to the Apostles. They are charged with the pastoral care of all those in their diocese. With priests as their co-workers, Bishops, like the first Apostles, have as their first task “to preach the Good News to all people” and to continue the sacramental ministry of the Church. Parishes are an extension of the Bishop’s pastoral care for a region of a diocese. Pastors here in the Archdiocese of Boston are appointed by Cardinal Sean to care for specific parishioners in one or more of the 144 cities and towns that comprise the Archdiocese.

In the world, there are over 1.1 billion Catholics, spanning nearly 3,000 dioceses. Across the world, there are nearly 5,000 living bishops, 400,000 priests, 1 million consecrated religious, and 220,000 parishes.

Here in the United States, our Catholic Church is structured into 194 dioceses. We are 64 million strong, including 45,000 priests, 90,000 consecrated religious, 15,000 deacons, and 19,000 parishes.

Within Massachusetts, we have 4 dioceses: the Archdiocese of Boston and the dioceses of Fall River, Worcester and Springfield. In total we have nearly 3 million Catholics, including more than 2,000 priests, 4,000 consecrated religious, 450 deacons, and 600 parishes.

Our Archdiocese of Boston is the 4th largest diocese in the United States, behind Los Angeles, New York and Chicago. We have over 1.8 million Catholics, including 785 diocesan priests, 2700 consecrated religious, 240 permanent deacons and 292 parishes. We celebrated our 200th anniversary as a diocese last year. We are an ethnically diverse and spiritually enriching faith community which educates approximately 46,000 students in its Catholic schools and 156,000 in religious education classes each year, ministering to the needs of 200,000 individuals through our social service outreach. Mass is celebrated in nearly twenty different languages each week.

The size and shape of our Church’s institutions within our Archdiocese of Boston has changed over time and will always change to address the opportunities and challenges of each generation. However, there are two constants that will always need to ensure the well-being of our Archdiocese: Healthy Parishes (led by the pastor assigned by Cardinal to serve the people in a community, and the priests, staff and volunteers that assist the pastor) and healthy Central ministries (led by the Archbishop and the staff and volunteers that assist him. Furthermore, a strong Archdiocese will also have a healthy and collaborative relationship between its parishes and its central ministries. Strengthening that relationship is one of the primary aims of the IFRC.

Now let’s turn to define what the central ministries are in the Archdiocese of Boston.

What is the role of Central Ministries in the life of a Diocese or Archdiocese?

EVERY diocese or archdiocese has central ministries. Typically, central ministries in dioceses carry out the specific duties of the Archbishop/Bishop with tasks such as the teaching our Catholic Faith, the formation of priests and deacons, the appointment of pastors & the assignment of priests, the creation (or reorganization) of regions, vicariates, parishes, schools and other institutions to meet the pastoral care of the people, and the relations with people of other faiths, with governmental entities and with the general public. In all things, the central ministries carry out the Archbishop’s duty to promote unity.

In addition, central ministries often carry on other functions for the Church in which our leaders determine can be more effectively or efficiently handled centrally instead of at each parish. Ministries and offices such as the Vocations office, the Catholic Schools Office, Social Services (such as Catholic Charities), Clergy Retirement, Communications (via newspaper, television, radio, websites and whatever new tools emerge), Human Resources & Benefits, Accounting, Fundraising, real estate acquisitions, leases and divestitures, and the important work of chaplain programs for colleges, hospitals and prisons.

In the Archdiocese of Boston, we have more than 60 ministries that are handled centrally at the Pastoral Center in Braintree. Like in other large dioceses, some of our very large ministries are handled in other locations, such as Catholic Charities and the Catholic Hospital system, but they always remain tied in some way to the Cardinal’s office and the central administration of our Archdiocese.

Now, to explain how central ministries are currently funded, some of the issues with our current model of financial relationship in the Archdiocese, and the direction of a new model proposed by the IFRC, Iet’s welcome Steve Barrett.

IFRC Overview

Hello, my name is Steve Barrett.

Along with Fr. Bryan Parrish, I am proud to serve as co-chair of the Cardinal’s “Improved Financial Relationship Committee” – shortened to the “IFRC” — which I’ll talk more about in a few moments.

In my professional life, I am a management consultant. Prior to that I was chief financial officer of Whirlpool Corporation, and retired from the Procter & Gamble Company as regional CFO.

In my personal life, I am married with 5 children and a member of St. Patrick Parish in Natick.

Over the next 10 minutes, I will:

  • Describe the current model of financial relationship which exists between the parishes of the Archdiocese and its Central Ministries.
  • Explain what’s wrong with this model and why the Archdiocese deserves better. In other words, I’ll try to answer the “why change?” question.
  • I’ll briefly recap the process to arrive at a new model and the specific work that the IFRC has accomplished thus far.
  • Finally, and most importantly, I’ll get into some of the specifics of the envisioned model and the benefits it will bring to the parishes and Central Ministries.

How are Central Ministries funded?

Just as all dioceses have central ministries, all dioceses have created ways to fund the work of these critical ministries. In most dioceses, this funding normally occurs thru 2 avenues:

  • An “appeal” directly from the bishop to all Catholics for the funding of the ministries. Here in Boston, this is called the “Catholic Appeal.”
  • The second avenue of funding is an allocation of central expenses to all parishes. Some dioceses call this a “cathedraticum”, others a “tax” (not my favorite word!), others an “allocation” and still others “fees”. Whatever you want to call them, most dioceses consolidate all of these charges into one broad allocation, which is paid out of the parish budget. But that’s not the case here in Boston, where we have many smaller fees. These include Catholic School support, hospital chaplaincy, fees for audit, real estate and others.

What are the problems with the current model of financial relationship in the Archdiocese of Boston?

Focusing more specifically on our Catholic community in the Archdiocese of Boston, the model of financial relationship that we currently have can best be described as “broken” (and that’s being charitable!). Amongst the pastors, and probably everyone who comes in touch with it, there is widespread dissatisfaction with our current model. In recent surveys, 2/3rds of pastors felt that this model could be improved – and only 25% preferred the current model.

  • The model is complex, opaque and inefficient. Lots of little fees that result in lots of monitoring and collection/disbursement inefficiencies. On the parish end it feels like ‘nickel & diming’, and its wasteful. The model is hard to rationalize and even harder to communicate.
  • The model, and how it’s applied in practice, results in very uneven funding and support of the Central Ministries. For perspective, if the average ‘rate of CM support’ across all parishes is 17% of parish revenue, some parishes contribute over 30% …. Some less than 5%. This is a huge range of variation – and most of it is not explainable by ‘large versus small’ parishes or community income levels. There are many examples of small parishes giving larger percentages of their income, as well as significant differences between parishes within the same city or town.
  • This inequity creates division. “Winners” are those that don’t contribute much to the support of Central Ministries, or that “game the system” by changing the way parish income is raised or classified. That’s not right or fair.
  • At the central ministry level, the financial planning and budgeting process has been described as “not inclusive, too short-term focused, not well-structured and not well-documented.” (This, too, is a fairly charitable description!) There’s too little understanding outside of Braintree as to what goes on at the Central Ministries. On top, the pastors and parishes – which both fund Central Ministries and should be the primary beneficiaries of its efforts and services – are not involved in the budget and don’t feel they have a voice at the table.
  • The net of all of the above is a culture of little mutual accountability – of parishes and Central Ministries, of parishes to each other. Not surprisingly, leaders of other dioceses look at our model and say things like:
  • Your model is the worst in the country.
  • Boston has such an educated catholic community, how could your model be this bad?
  • There’s no way your model can work over the long term.

Well, I don’t know about you, but as a Boston Catholic I don’t appreciate characterizations like that. This is Boston. The home of the Red Sox, the Patriots, the Celtics, the Bruins – this is a city of champions – and of course we’re also smarter than average. The Archdiocese of Boston deserves a better model of financial relationship – and that’s exactly what the Cardinal set out to remedy last year.

The Improved Financial Relationship Committee (IFRC)

So I’d like to take a few minutes now to explain how the “Improved Financial Relationship Committee”, or IFRC, came to be – the process that has guided our work – and what specifically the committee has accomplished thus far.

  • After reviewing pastor concerns, Cardinal Seán formed the IFRC last year. The idea was to form a committee of pastors, lay leaders & Pastoral Center staff – a representative group from across the Archdiocese. This committee would articulate a charter/a mission/a vision of what “success” would look like, would have in-depth and meaningful consultation with all key stakeholders, and would conduct external benchmarking, seeing how other dioceses across the country approach this entire area.
  • With all this internal and external perspective, the committee was tasked with developing a new and better model, to again seek input to specific elements, and to finalize and present a recommendation to Cardinal Seán. This recommendation would include a robust and comprehensive communication and implementation plan.

This was the Cardinal’s intent. Last November the IFRC was officially formed, 13 of us in total, and had our first meeting. Since then we have met 14 times and accomplished the following:

  • Agreed on mission, vision, goals & strategies for the committee and overall process. In undertaking any initiative of this size/scope, getting clarity and alignment on each of these elements upfront is critical. We did that, and it is all available for you to see elsewhere.

What I will tell you here is that we focused all of our work towards answering the following 5 key questions:

1. How can the new model help the parishes? Including: what can the central ministries do to strengthen parish finances as the new model is being launched and during the currently challenging economic times?

2. What exactly is the pastoral & administrative work of the Central Ministries that needs to be funded? In other words, what efforts/activities should be led from and/or consolidated in Braintree?

3. What process is best and fairest for financial goal setting? This process is key to the success of any new model. It must be inclusive, transparent and respectful.

4. What formula should be used to calculate parish goals and assessments? And

5. How should we transition from the current model to the new model?

So, with those 5 key questions, the IFRC moved ahead to:

  • Implement and review responses from 2 surveys: an Archdiocesan pastor surveys (with 120 respondents and pages of verbatim) and a ‘best practices’ survey to other dioceses. In total, 36 responses.
  • Provided written committee updates to pastors in late November and February.
  • Conducted the first round of regional consultations with pastors and clergy in February/March. These were information sessions. But, most importantly, they were venues for a frank and constructive dialogue around the current model (and all its weaknesses) and an ‘in-pencil’ new model. Feedback from the pastors regarding direction of our preliminary proposals was generally positive, and we received – and incorporated – their specific input into our currently envisioned new model.
  • Revised and fine-tuned the model I’ll share with you in a few minutes. And, lastly,
  • We’ve prepared for this second round of consultations.

That’s the thumbnail of the IFRC, and what we’ve been doing for almost 6 months. I’ll conclude this segment with a description of what we are now calling our ‘envisioned model.’

The proposed new model of financial relationship

[slide of side-by-side new versus current model] 

I’ll start this description with a graphic which compares the proposed new model. On the left half of this slide you’ll see what we currently have: a Catholic Appeal target, plus several ‘taxes’, part of a special communications collection, and a series of fees – real estate, property management& engineering and – everyone’s favorite – internal audits. A pretty scary picture overall. The right side of the slide, by contrast, is the picture of simplicity – composed of a Catholic Appeal assessment and a parish tithe. The tithe replaces all current taxes and fees. Importantly, note that the two formulas deliver the same dollar level of support of Central Ministries.

I would make the following comments regarding the envisioned model:

  • You will note that both formulas include funding which goes directly to schools. In the current system this is a ‘school tax’ equal to 6% of offertory, and it is paid only by parishes without their own parochial school. (Those parishes with schools receive these funds plus – in most cases — additional subsidies from other parish sources.) In the new system, with one ‘flat rate/fair share’ total level of CM support, all parishes support the schools – and parishes with schools get their equivalent ‘school tax’ amount rebated directly back.
  • As noted above, the new system is a ‘flat rate/fair share’ concept. All parishes are expected to contribute this same percent of their revenue – with ‘revenue’ defined as including all offertory, grand annual collection and net rental income. Revenue/income from bequests, asset sales and capital campaigns are excluded. This definition reflects the consensus input of all pastors attending the regional consultations in February/March.
  • In total, this rate is expected to be between 17 & 18% of revenue – with 5-6 percentage points of that earmarked directly for schools. Of the 17-18% total, the Catholic Appeal component will represent 7-8% and the tithe will be 10%.

Separate from these formula mechanics, I would add the following important elements of the envisioned model:

  • A central element of the new/revised Central Ministries financial planning and budgeting process is the creation of a “pastors advisory council”. This group, to be comprised of pastors representing all regions of the Archdiocese, will provide review, monitoring and input to the Central Ministries budget. This council will, in effect, be the voice of the 292 parishes in the programs/services and initiatives comprising the Central Ministries budget. Importantly, this council will also be the arbiter of a ‘goal adjustment or abatement’ process – whereby individual parishes may petition to have their goals adjusted.
  • To address the key question of how the new model can help the parishes, significant central ministry resources will be deployed during the first 2 years to assist parishes in launching increased offertory campaigns and other fund raising initiatives.
  • During the transition year, it is expected that some parishes will have difficulty with satisfying their assessment. Assuming the effort is there, and that a ‘best practices’ program has been implemented, shortfalls will be forgiven. Note that all of our modeling data suggest that an effective ‘increased offertory campaign’ can close virtually every existing gap.
  • For parishes that continue to exceed their Catholic Appeal goal, a minimum of 50% of the overage will be shared back to the parish. These monies can be redeployed to parish ministries or charitable causes, earmarked back to specific ministries sourced from the Pastoral Center, or used in a stewardship sense, to help support a poor parish. After the transition period, it is expected that parishes will be able to receive back or re-designate up to 80-90% of the excess over their Catholic Appeal goal.

[show slide: “What are the new model’s benefits”] 

To conclude my remarks, I would like to summarize what we in the IFRC believe are the benefits of the envisioned model:

  • For the parishes: a simpler system and process. Potentially more financial resources for the work of the parish, through increased fund raising generally and a larger share of an exceeded Catholic Appeal goal. Resources from the Central Ministries to increase offertories, and no nickel and diming through unexpected fees. This enables a better budgeting process locally.
  • On the right side of the slide, you’ll see the benefits to the Central Ministries. Again, simplicity saves time and money – which means more resources against the core work of saving souls. Stronger messaging for the appeal, more funds for the entire Archdiocese. Plus, a better budgeting process and more predictable revenue flow.
  • The most important benefit and outcome, on both sides of this ledger, is that the IFRC believes that this envisioned model better reflects where we ought to be as a church. A financial model grounded on the principles of fairness, mutual accountability and simplicity – one that is consistent with the pastoral mission of the Archdiocese and that is reinforcing of this simple/powerful concept: that the Catholic Church of Boston is “one.” 

Frequently Asked Questions & Scenarios

One of the most frequent questions we have received in our consultations is what will we do to help parishes that are currently far below their fair-share level of funding of the central ministries.

We will be asking those parishes to do their best to increase their level of income so that their parish and the central ministries will be on a more solid financial foundation. Specifically, we will ask them to refresh their parish database, to ask all parishioners to prayerfully consider increases in their weekly support of the parish offertory collection, to strengthen their approach to the parish grand annual collection (if a parish has one), to strive to increase participation in the annual Catholic Appeal, and to implement a planned giving effort in the parish. At every step of the way, Central Ministries staff will be working with parishes to train on stewardship/fundraising best practices, working with third-party firms to obtain the most favorable terms, and to help adjust the recommended approaches for a particular parish situation. Normal expected increases from an offertory enhancement campaign would make up the shortfall in nearly all of the parishes currently below their expected fair share contribution. Those that still fall short, if they undertake the steps we request of them, will have any gaps forgiven in year one to ensure a smooth transition.

What if a parish is above their fair-share currently? What will be asked of them? Even though there is less urgency for them to undertake the new offertory enhancement program and grand annual approach, we encourage them to do that to maximize the financial support that can be directed to their pastoral mission.

What is the proposed timing of this transition? If these consultations go well in May and early June, our committee hopes to finalize a recommendation to present to Cardinal Sean, the Cardinal’s Cabinet, the Presbyteral Council and the Archdiocesan Pastoral and Finance Councils by July 1st. If approved, we would begin training for the new fundraising campaigns in September of this year in preparation of a launch of the new model in July of 2010.

How you can help

Please provide our committee with your feedback on the general direction of our model. Are we on the right track? Please list your feedback on the forms provided.

We also would encourage you to take the information you have now learned and share it with others in your parish community. Our overall goal is to hear all good ideas on how to solidify the financial footing of the parishes and the central ministries of the Archdiocese and strengthen the relationship between the two.

Now to close our video, we’ll hear 4 brief reflections from Pastors serving on the IFRC and then final remarks from Cardinal Seán. Thank you for your attention and help.

Msgr. Garrity

Hello, my name is Msgr. Paul Garrity. I’m pastor at St Mary’s Parish in Lynn. I’ve been there for the past seventeen years. For the past several months I’ve been involved in a committee at the Archdiocesan level to look at the relationship between the parish and the Archdiocese. We call all the things that the diocese does the Central Ministries. There are many things that we in the parishes depend on that no one of us could obviously take care of ourselves. The seminary is a great example of that. What we’ve been working on is a new relationship that hopefully helps us to build a better sense of community throughout the Archdiocese. One of the observations for me as a pastor is that while I’ve been at St. Mary’s for 17 years, I’m probably not going to be there for the rest of my priestly career. So, when I go to a different parish, it’ll be easier for me to be operating under the same kind of standards and guidelines from parish to parish. So I think for me as a pastor, I’m looking forward to a new way of dealing with the diocese that hopefully builds on a better sense of church and greater sense of community; so I hope that this can be helpful for you and hopefully the roll out of this new relationship will enhance ministry across the Archdiocese and particularly help us at the local parish to have the resources that we need to accomplish all the work of building up the body of Christ the Church.

Fr. Parrish

Hello, my name is Fr. Bryan Parrish. I’m presently the pastor at Holy Family church in Duxbury and for the past four months or so I’ve been serving on this committee for improved financial relationship for the Archdiocese. And certainly those of us that are pastors recognize that the current model of funding for parishes and for the Central Ministries of the Archdiocese is in some ways a hodgepodge, an Irish breakfast if you will, of fees and taxes and voluntary offerings and so on. And I would agree with the dissatisfaction that many have expressed with the current model. So I’m really looking forward as a member of this committee to move forward to this new, and really improved, relationship between the Archdiocese, Central Ministries, and parishes. The underlying principles of this committee’s work have been accountability, mutual accountability, fairness, transparency, and really emphasizing that this is a relationship that we are looking to engender between parishes and Central Ministries. Certainly these underlying principles are really great needs that presently exist within the parishes of the Archdiocese and Central Ministries. So, moving forward I’m very encouraged and very hopeful that these underlying principles really will be in fleshed in the work of the committee and I certainly look forward to getting on board with the various initiatives that are rolled out. Thank you very much.

Msgr. Kelley

Hello, I am Msgr. Frank Kelley, pastor of Sacred Heart Church in Roslindale. And for the past four months been working on this committee with the Archdiocese and the parishes to look at our financial relationship. We’re considering all the factors of funding parishes and the Central Ministries of the Archdiocese. I would make two comments I think. One is that it is obvious that our setup in Boston doesn’t work very well – the way that parishes fund and support the work of the Archdiocese. It is the least favorable and unfair system compared to all of the other dioceses around the country and we see the need to make a change of that. The second thing though I think is even more important is that this whole consideration that we’re doing has helped teach us how to go about using our financial resources as well as our stewardship for the betterment of the Church’s mission. We need to learn new ways to use our financial resources, and more so our human resources, for the mission of Christ. And so I’m hopeful that this committee and some of the lessons we’re learning about our finances are going to help us learn more about the use of our time and talents as well. Thank you very much.

Fr. Ritt

I’m Fr. Paul Ritt, the pastor of St. John the Evangelist Parish in North Chelmsford. I’m a member of the Improved Financial Relationship Committee. We Catholics have obligations to support not only our local parish, but the wider church. Here in the Archdiocese, there are so many central ministries that provide valuable service to our local parishes, and so we have this obligation in stewardship to support financially and in many other ways the mission of our entire local Church. I’m hoping that through the work of this committee and the cooperation of everyone, all the Catholics within the boundaries of our Archdiocese, we can improve not only our local offertory collections but also to support our Central Ministries in a way that is fair and equitable and easy to implement, and I think that if that happens we certainly will all be better off in carrying out the mission of Christ here in the Archdiocese of Boston

Closing by Cardinal Seán

Your feedback and involvement are critical to our Church. Please prayerfully collaborate with those in your parish and everyone involved with the IFRC to help us achieve the best possible model of financial relationship in our Archdiocese – one that helps our parishes and all of our ministries fulfill the mission Christ has entrusted to us.

I ask your prayers for our Archdiocese, for all of our parishes and people, and for the ongoing work of the IFRC and assure you of my prayers for you and all your loved ones.

Thank you for your help and God bless you.

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