James P. McDonough's Letter FY06

James P. McDonough's Letter from Annual Report Fiscal Year 2006 

To the Catholics of the Archdiocese of Boston,

We are pleased to provide you the Annual Report of the Archdiocese of Boston for fiscal year 2006. The financial state of our local Church is improving every day. In 2006, Cardinal Seán stated that “Together—clergy, religious and laity—we will find the way forward.” Since then he has encouraged chancery staff and the many dedicated lay volunteers and experts who advise us to always think in terms of service. In response to that charge, we have worked over the past twelve months to focus on serving parishes, schools, hospitals and cemeteries.

During this time we have made organizational changes to move the operations of the Archdiocese closer to the parishes, laity and clergy. It is our goal to become a center of service that supports our pastors and parishes, our principals and schools, and those who maintain our cemeteries. To do this, we have streamlined our operations by creating a new Parish and School Services group designed to bring essential services together in one place. Now parishes can turn to this group for help with issues related to insurance, employee benefits, technology, real estate and facility maintenance.

Parishes make up the core of our faith communities. It is in our local parishes that we worship, educate our children in the faith and work for peace and social justice in our broader communities. Through our parishes we are baptized, receive the Eucharist for the first time, enter the vocation of marriage, bring the sacraments to the sick and say our final farewells to loved ones.

In order to be there for us at all the stages of our spiritual lives, our parishes must manage a wide variety of tasks, from developing a financial plan to maintaining facilities to evaluating real estate opportunities. There was a time when a community of priests would manage each parish, sharing the workload and providing support to one another. That time has passed. Today, most often we rely on individual pastors to create a viable parish life with little or no additional clergy support. These men are doing the real work of God and it is our obligation to do all that we can to support them in these changing and challenging times.

The Archdiocese has responsibilities toward a number of Catholic institutions referred to as Related Organizations. These are Catholic institutions to which we provide moral and ethical guidance as well as other services as needed. For instance, the Central High Schools are among such entities that are included in our risk management, health insurance, pension fund, life insurance and disability insurance plans. Many of these institutions have small numbers of employees. Their participation in Archdiocesan plans makes them part of a larger group, which allows them to get better service, guidance, coverage and rates.

As we make financial decisions that affect our work as Church, we do not forget that we are part of a broader community. This is particularly relevant when we sell property. Certainly we have an obligation to obtain a strong financial return for the parish, but we strive to do so while at the same time benefiting our neighbors. Examples of where we have achieved this balance include the sales of St. Joseph Parish in Salem, where the property is being developed into affordable housing and at Immaculate Conception Parish in Cambridge, which has been bought by the charter school that had been leasing part of the Church’s property.

Over the past year we have begun to see some improvement in our financial condition, but we are far from where we need to be as a Church. As you will see from this annual report we have been able to lower our operating loss in central operations by $2 million (or roughly 25%), increase our net assets due largely to the sale of Reconfiguration property, and significantly reduce the deficit in the Revolving Loan Fund.

To the average person it might appear that the Archdiocese has substantial cash. The fact is that while corporation sole continues to show growth in overall revenue, the majority of that cash is for the specific use of particular parishes and schools. In other words, we are restricted in how we use the cash that is shown on the balance sheet.

One area that we are clearly focused on is our pension plans. The condition of the Lay Pension Plan has improved to the point of being nearly fully funded. With regards to the Clergy Retirement/Disability Trust (funded through the Clergy Benefit Trust and investments), we are making significant strides to strengthen these funds in order that our clergy receive the care they deserve after giving their lives to the mission of the Church. In this report, we address the steps currently underway to build up the Clergy Retirement/Disability Trust.

Our thanks to all who assist Cardinal Seán and his leadership team. Many laypersons as well as Clergy serve faithfully on several important committees that offer significant support and expertise to our financial management team, including:

  • Finance Council – a group of lay leaders with business and financial acumen who advise the Cardinal and, as required by canon law, make decisions on major real estate transactions and other financial decisions. The Council has four subcommittees including Audit, Real Estate, Legal and Development.
  • Investment Council – a group of investment professionals who advise the Cardinal in the management of the Common Investment Partnership.
  • College of Consultors – a group consisting of Auxiliary Bishops and Pastors who review and approve major real estate transactions.
  • Archdiocesan Building Commission – a group of Pastors and Clergy who advise the Chancellor regarding plans for new construction throughout the Archdiocese.

Over this past year I have been both impressed by and grateful for the many people who have participated in the efforts to strengthen the Archdiocese. I have been blessed with the support of our pastors, priests and laypersons. They have unselfishly given their advice, time, hard work, and prayers. I am indebted to them. Under the strong leadership of Cardinal Seán, with the help of our clergy, religious and laity, and through a devotion to our faith, the Archdiocese is poised for a long future ministering to God’s people with love, respect and dignity.

James P. McDonough
Chancellor