Fiscal managers worried about Wall Street woes, but not panicked

MIAMI – People who look after the church’s money say they are worried but not panicked about the nation’s current financial woes.

Meeting in Miami Sept. 28-Oct. 1, members of the Diocesan Fiscal Management Conference told the Florida Catholic, the archdiocesan newspaper, the effects of the current banking and credit crisis have yet to manifest themselves in diminished donations to parishes.

They also said that although the church invests conservatively and with a long-term mindset, diocesan investment portfolios – along with everybody else’s – have taken a hit during recent market downturns, especially the Dow’s 700-point drop Sept. 29 after the House of Representatives failed in its first attempt to pass a rescue plan for the banking industry.

“It’s something we’re obviously concerned about. It does impact not only our current operations, but also long-term investments” such as employee retirement plans and endowments, said Bob Cox, outgoing president of the Diocesan Fiscal Management Conference. “There’s no facet that’s unaffected by what we’re seeing today.”

Cox, who has been on the job for 14 years at the Diocese of Evansville, Ind., spoke the afternoon before the Senate passed its version of the rescue bill Oct. 1. (The House was to vote on the measure Oct. 3.)

He said in his own diocese “we’re seeing consistent donations at the parish level,” and the offertory totals have seen a steady increase over the years. “People are still dedicated to their parishes.”

On the other hand, “too many of us do not have adequate memory of a severe market depression,” Cox said. “Long term, I think anyone would be concerned if things don’t turn around.”

The 39-year-old Diocesan Fiscal Managers Conference represents the professional accountants and business managers who run the day-to-day operations of U.S. dioceses. Most of them, along with councils of financial experts and investment professionals, also oversee the long-term investment portfolios of dioceses.

“No matter what quality we thought we had, in today’s markets all bets are off,” said Denis Hamel, chief financial officer for the Diocese of Palm Beach.

He said his diocese’s portfolio suffered some losses in recent weeks, but they are “relatively minor amounts” and “unrealized,” that is, only paper losses since the assets have not been sold.

“Anything hurts because it is church money. It’s come through our generous parishioners and we don’t want to lose a dime,” Hamel said.

He added that while the Palm Beach Diocese has not faced problems, “it’s extraordinarily difficult to obtain credit.” As more banks go under, merge or change hands, “that (credit crunch) will be felt by dioceses throughout the country,” he said.

Hamel noted, however, that there is an element of “media frenzy” that could make the economic times harder for everybody, including the church.

“It invites fear on the part of people,” he said. “People will begin to believe that they need to tighten their belts. I would hope that the church wouldn’t be impacted, but I’m not so naive as to think we won’t see the effects of that.”

“There’s going to be less spending than you’ve seen before,” said Art Fleischer, director of human resources for the Diocese of Venice.

He was speaking to diocesan fiscal managers about how they can work more closely with human resources personnel in their dioceses, but alluded at the end of his comments to the economic downturn.

He noted that even now in most parishes the weekly offering does not cover operating expenses. Health care costs are rising much faster – about 9 percent a year – than salaries ever will. Increased operating costs also are making tuition at Catholic schools less affordable and teachers’ salaries less competitive.

“The people in our pews are going to continue to give. But they’re not going to give as much as they did before,” Fleischer said.

“My biggest worry is to be able to continue to provide the resources to carry out the Gospel message,” said Cox, “because in the end, that’s the truly important aspect of our work.”

“Hopefully, if the government acts responsibly, we can work our way out of this thing,” Hamel said. “I don’t think that we’re looking at catastrophic proportions.”

Catholic Review

The Catholic Review is the official publication of the Archdiocese of Baltimore.