Archdiocese’s fiscal health outlined in annual report

By Michelle Martin | Staff writer
Sunday, March 13, 2011

The Archdiocese of Chicago finished its 2010 fiscal year in good financial shape, largely due to the generosity of Catholics in the archdiocese and “prudent responsiveness to some of the most economically challenging and fiscally difficult times in recent history,” according to Kevin Marzalik, the director of finance, in his letter accompanying the report.

The annual financial report for the fiscal year that ended June 30, 2010, shows that both the parishes of the archdiocese and the pastoral center ended the year with slightly fewer assets than when they started the year. But the decreases were modest as the country suffered through a lingering recession, high unemployment and volatile markets.

Overall, the pastoral center — which includes all the central administration and ministries of the archdiocese — saw its net assets slip from $495 million to $483.9 million. The total net assets of the archdiocese’s 357 parishes dropped from $1.68 billion to $1.66 billion.

In fact, losses to parishes dropped from about $61 million in fiscal 2009 to $5.5 million in fiscal 2010. Parish operations showed slightly more revenue than expenditures, but parochial schools continued to cost more than they raised in revenue.

At the pastoral center, losses dropped from $79.6 million in fiscal 2009 to $31.1 million in fiscal 2010. Income rose markedly, from $46.9 million to $73.6 million, with the largest increases coming in interest and dividends on investments. In 2009, investments actually lost $5.8 million; in 2010, interest and dividend income was $13.4 million.

The archdiocese also spent slightly less both on pastoral center services and on support to parishes, even though the amount needed to support parishes was larger than the archdiocese would like to see, Marzalik said in his letter for the report.

“The level of financial support to parishes remained at over double the targeted amount as many parish communities, struggling with the harsh realities of the economic environment and aging physical plants, required additional financial assistance,” he said.

The archdiocese also lost money on insurance programs and paid more interest on parish deposits in the archdiocesan bank.

This year’s improved financial picture is a result both of steady giving — remarkable in a time when most charitable organizations are seeing declines — and austerity measures such as a salary and wage freeze to control spending, Marzalik wrote.

The archdiocese did spend $6 million to settle various claims relating to clerical sexual misconduct during the fiscal year, Marzalik wrote.

Funding for misconduct settlements did not come from current contributions to parishes, schools or the Annual Catholic Appeal.

The archdiocese designated the proceeds from sales of undeveloped properties and recoveries on insurance policies to repay bank borrowings incurred for such settlement payments.