The Archdiocese of Baltimore rolled out a financial relief package for parishes, schools and other organizations worth about $7 million to assist with costs during reaction to the coronavirus pandemic.
The two major components are a rebate of pension payments for the first quarter of the year, totaling about $3 million, and waiving payment for the employee health plan for May, about $4 million.
With additional loan assistance from the Knights of Columbus and federal government programs, that relief could be even higher.
John Matera, executive director of management services and chief financial officer, acknowledged that many parishes are feeling the impact of empty churches. The relief package “is a way to get more money into the parishes and schools quickly,” he said.
Entities in the archdiocese, such as parishes and schools, contribute approximately 9.5 percent in retirement benefits annually. A portion of the retirement benefits fund individual employee 403(b) retirement accounts and also the frozen defined benefit lay pension plan. As part of the relief package, the current quarter’s payments were returned to each parish before they were sent into the trusts. In total, this represents about $3 million across the archdiocese.
For St. Ignatius Parish in downtown Baltimore’s Mount Vernon neighborhood, Jesuit Father James Casciotti, pastor, said the rebate check was about $5,000. He said the parish is down about $4,000-$5,000 a week in collections since Masses were suspended in mid-March.
“The $5,000 (rebate) isn’t going to completely solve the problem,” he said, “but to me, it’s a tangible sign of communion and solidarity. The archdiocese has been in daily communication with updates, advice, ideas and support, and actually getting a check back – the money helps, but it’s the idea that we’re in this together.”
He said about 65 percent of the parishioners contribute on a regular basis through Faith Direct, an electronic giving portal. Others have been dropping off or mailing the checks they might normally have placed in the offertory collection. But the cash that people drop in the basket has not been replaced yet.
The significant portion of parishioners using electronic giving will help the parish avoid “absolute financial collapse.” However, he’s concerned about how and in what numbers people will return once churches are allowed to reopen. Some people may get used to attending church virtually and expect to continue that practice.
For now, he said the parish is doing everything it can to keep all the staff members. He said he’s trusting in divine providence but doing some advance planning, too.
He sees this as a chance to be the next “Greatest Generation,” referring to those who lived through the Depression in the 1930s and World War II. “I think of my grandparents and all the stuff they did. This is our Pearl Harbor or Depression. We’re just going to step up and deal with the day to day,” Father Casciotti said.
“It’s just hard to project some of the changes that this time is going to bring and how you do church,” he said. He expects to budget for 15 percent less revenue next year, which would provide a cushion for the future and some flexibility “for whatever else may come down the line.”
In Anne Arundel County, Monsignor Jay O’Connor, pastor of Our Lady of the Fields in Millersville, said the pension rebates and waiver of health care costs will primarily help the parish continue to pay all its employees’ salaries and health benefits as they work from home and continue to provide ministry to the parish.
“Aid from the archdiocese will certainly help the parishes in the short term continue to carry on necessary ministries.”
His parish has about 30 percent of its people using electronic giving, but it helps that people are mailing in their envelopes.
He said the parish has gotten a lot of positive feedback about the ways it continues to reach out – such as phone calls to parishioners, broadcasting daily and Sunday Masses, and livestreaming the Stations of the Cross.
He said people understand that the parish has expenses to maintain the facilities and support the parish staff. “Most staff are working; in justice they need to be compensated for that,” he said.
The parish has leveraged its relationship with Ignatius Press, the provider of materials for the parish religious education program. The company allows families that are verified as parishioners to use online and digital resources at home.
Our Lady of the Fields won’t be able to bring back religious education before the end of the year – typically late April or early May. “Parents appreciate having options,” Monsignor O’Connor said.
He hopes to be able to extend similar resources to parish families whose children attend Catholic schools. They have religious material as part of the school curriculum, but he would like to provide something from the parish as well.
Monsignor O’Connor also serves as Eastern Vicar, Archbishop William E. Lori’s delegate to the parishes in the region, a large and varied area that covers Anne Arundel, Harford and Baltimore counties (but not the city).
Parishes are being creative in reaching out to parishioners, but they are feeling financial strain.
Pastors are saying that “people are really stepping up. Some people are giving more than normal because they understand the need,” Monsignor O’Connor said.
“Because of the contact and services parishes are continuing to provide, folks are doing their best to make sure they don’t forget the church because the parish has not forgotten them.”
Some parishes in the vicariate have as much as 80 percent of people using electronic giving and are therefore in better shape. A few parishes have considered furloughing staff, but the majority are keeping staffs intact.
“It’s a difficult time,” Monsignor O’Connor said. “Most pastors, most priests in the vicariate are sensitive to and committed to maintaining contact with parishioners in the best way they can.”
At the archdiocesan level, Matera, the CFO, said his team includes regional controllers and parish auditors – seven total accounting professionals – to help the parishes understand their operations and cash flow.
The archdiocese also set up a universal giving page where parishioners can select their parish and make a direct donation, which should especially help about 35 parishes that did not have electronic giving. “Within the first five days, about $20,000 came in,” he said. “Looking at the parishes, it looked like a lot of the smaller parishes in the city were receiving it. A fair amount went to places without electronic giving.”
Baltimore Archbishop William E. Lori said, “We are doing everything we can to try to assist our pastors and school leaders so every job can be preserved and so that we can weather the financial impact of this crisis as best we can, knowing that we still have bills to pay and crucial ministries to carry out, especially those which serve those most in need.”
The assistance with pension and health costs is part of that. A standard benefit of parish and school employees of the archdiocese is a 4 percent contribution toward their 403(b) retirement, added each quarter. As a result, the employee contribution this year will be 3 percent as the first quarter’s 1 percent contribution was provided back to each parish and school to help stabilize their finances and payroll, according to Matera.
The archdiocese was able to waive the May payment for health care by dipping into surpluses in the health plan. Matera said the archdiocese is self-insured for the most part, with about $40 million to $45 million in claims each year.
Although it seems that at times like this, health care costs would go through the roof, he noted that during the time of the bird flu scare in 2005, claims seemed to be lower overall because people were more conscious of their health habits.
The archdiocese will also support parishes by finalizing a line of credit of at least $1 million with the Knights of Columbus to provide low-interest loans to parishes and schools. “We’re giving microloans of about 2.5 times a parish’s monthly payroll,” he said.
Interest will be charged through the Knights at 2.5 percent and can be repaid interest-only for two years. The parish can prepay without penalty and if there is still a balance after two years, it will be turned into a term loan.
He said the intention of the Knights’ loan is very much like the Paycheck Protection Program offered via the Small Business Administration through the CARES Act passed by Congress, which can provide cash for eight weeks’ operating costs – payroll, benefits and utilities – to stabilize the work force.
The SBA clarified its guidelines April 3 to note that religious organizations, including houses of worship, are eligible for assistance through the PPP. Loans will be made through local banks; the archdiocesan finance office is assisting parishes and schools in the application process.
Parishes will also be able to access funds from the Interparish Loan Fund, normally reserved for capital projects, for operating funds during this time.
Keeping as many people as possible employed and stable through April was the archdiocese’s first priority and it hopes to extend that at least through May with the archdiocesan relief package, loans from the Knights and possible help from the federal government.
Depending on the size of its budget, a parish can borrow a maximum of $50,000 through the Knights program.
At St. Ignatius, Father Casciotti doesn’t expect to take advantage of the Knights’ loan program, because his cash flow is OK for now and the parish has some reserves. He noted there is a trust that maintains the parish buildings, but those investments have taken a hit in a down market.
Monsignor O’Connor said the help from the Knights would be especially helpful for parishes with less liquid cash on hand to help “pay their bills and keep operating the best they can.”
He said that includes parishes reaching out via phone trees, electronic options such as myParish App and Flocknote, and “snail mail” via the Postal Service. Some parishes have identified members who are willing to shop for groceries or pick up medicines for those in the congregation who are sheltering at home per Maryland orders.
“There’s a lot of activity still going on – important activity and life-giving ministry,” Monsignor O’Connor said.
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Email Christopher Gunty at editor@CatholicReview.org