PROVIDENCE — While the Diocese of Providence experienced a small deficit in its annual Catholic Charity Appeal for the fiscal year ending June 30, 2018, its audited 2017-2018 annual financial report also notes a small increase in net assets driven partially by investment gains. This increase produced a small surplus in the General Fund, which supports operations.
“Overall, FY 2018 was a good year,” said Michael F. Sabatino, diocesan chief financial officer. “We had investment returns of approximately 7.5 percent for the fiscal year overall, which was good.”
Although the returns were a positive sign for 2017-2018, they were down 1.9 percent from the previous year’s returns of 9.4 percent.
Last year’s Catholic Charity Appeal brought in nearly $7.4 million to help support numerous diocesan outreach ministries, about $500,000 less than the year before.
“The Appeal in past years received specific bequests, but in this last year, no bequests were received,” said Msgr. Raymond B. Bastia, diocesan Vicar of Finance, noting the reasons for the decline from the previous year, including a small decline in donors.
Despite the decline in the Appeal, Msgr. Bastia said that parish assessment dollars remained consistent. These monies are used to fund diocesan operations.
Bishop Thomas J. Tobin acknowledged the financial challenges facing the diocese, but also expressed optimism about the good works it does with the resources entrusted to its care.
“This report shows that we have continued to receive loyal financial support from members of our diocesan family,” Bishop Tobin said in a statement.
“This generosity has provided essential support to the local ministries of our parishes and diocese. We have fed the hungry, provided heating assistance, supplied chaplains to hospitals, operated schools, sponsored charities to shelter the homeless and welcomed refugees and immigrants who have settled among us. In short, together we have continued the great work of the Church,” he said.
The Catholic Foundation reported a bright spot in its finances, benefitting from generous support in the last year that helped it to pass a major milestone.
For the first time in its history, the foundation surpassed $100 million in investments by parishes, agencies and individuals for charitable purposes, such as education, priest formation, parish maintenance and good works.
Also, Grateful for God’s Providence, the two-year, $50 million diocesan capital campaign, kept pace with its goal through its first year in FY 2017-2018. In the current fiscal year, pledges and donations have brought the campaign just past its midpoint. The campaign effort continues to work toward achieving its goal with two large blocks of parishes scheduled to conduct their campaigns in 2019.
Among the financial trends for the year, diocesan payables are doing a bit better than they had in the past. More parishes are able to make their payments for medical, pension and insurance bills in a timely fashion.
“A lot fewer are falling behind than we’ve had in the past,” Msgr. Bastia said.
“We work with parishes in a pro-active way and pastors have been diligent in keeping their bills as current as possible,” Sabatino added.
While the first six months of FY 2018-2019 has been “rocky,” with investment returns down a couple of percentage points in the face of fluctuating financial markets, there is some early good news to report.
While the diocesan line of credit remained at $2.9 million in the FY 2017-2018 report, the debt has since been paid in the present fiscal year.
“Through the sale of excess and non-ministerial diocesan properties we have been able to pay off that $2.9 million and currently have no outstanding debt for the line of credit,” Sabatino said.
In 2002, the line of credit topped $15 million when money was borrowed to pay settlements related to the sexual abuse crisis.
To further strengthen its finances in the current fiscal year, the diocese continues to look at creating efficiencies in operations.
“We did implement last spring, before the end of the fiscal year, an efficiency audit, that is continuing, in an effort to reorganize some of our central administration for cost-saving purposes,” Msgr. Bastia said.
Mixed returns on investments over the prior decade and an increase in longevity placed a burden on the lay employee pension plan, leading the diocese to freeze its retirement plan at the end of 2018. Other options are currently being reviewed.
Officials are also working with parishes to create efficiencies as well.
“Through a consultative process we are working on parish reorganization,” Msgr. Bastia said.
“Through these efforts we’re hoping to achieve significant operational savings, potentially 5 to 10 percent of overall expenditures, anticipated for the next fiscal year,” Sabatino said.
The report, a “User Friendly” copy of which is included in this week’s edition — with the full report available on the diocesan website: www.dioceseofprovidence.org — was examined by the independent auditing firm of Mayer Hoffman McCann P.C., as well as by the Diocesan Audit Committee and approved by the Finance Committee. It reflects the financial activities of diocesan Central Administration and Cemetery operations.