News/Events

April 25, 2007 - Archdiocese of Boston Releases Annual Report

Fiscal Year 2006 report cites significant financial progress, identifies challenges that remain in order to continue strengthening financial condition

(Brighton, MA) April 25, 2007...The Archdiocese of Boston today released its annual report for the Fiscal Year ending June 30, 2006 in keeping with Cardinal Seán P. O'Malley's commitment to report annually on the financial condition of the Archdiocese. The full report is available on the Archdiocese's website (www.rcab.org) together with the audited financial statements of the over 40 Archdiocesan related organizations. In addition, a special edition of The Pilot, with the complete annual report, will be available in all parishes this coming weekend.

The Fiscal Year 2006 report provides a comprehensive review of revenue growth, assets and liabilities and program initiatives that have been developed or are currently underway. Included are the audited financial statements of the Roman Catholic Archbishop of Boston, a Corporation Sole (the "Corporation Sole") that encompasses the activities of the parishes and its central operations. Today's disclosures also include an updated accounting of payments related to sexual abuse settlements and related expenses and the sources of these funds.

The report indicates progress on several fronts including lowering the operating loss in central operations by $2 million (roughly 25 percent), increasing net assets (due largely to the sale of Reconfiguration property), and significantly reducing the Revolving Loan Fund deficit. Further, the report shows that the Archdiocese has improved significantly the condition of the Lay Pension Plan.

While progress has been made, the report details several challenges that remain in order to continue the process of improving the Archdiocese's financial condition and its ability to support its mission. These include continuing to reduce Central Fund expenses and establishing a balanced budget, addressing the unfunded liability of the Clergy Benefit Trust, and responding to the inconsistent financial conditions of parishes throughout the Archdiocese, especially inner-city parishes with considerable capital needs. Further, while the Archdiocese's annual Catholic Appeal experienced a 15 percent increase in contributions in 2006 and raised $13.8 million, the Archdiocese recognizes the challenges it faces to generate greater financial support for the Church's works. The report discusses these challenges and highlights ways the Archdiocese is working to enhance its communication and outreach efforts in the hopes of continuing to earn the trust and support of the faithful.

"Much positive change occurred in the Archdiocese within the last year," said Cardinal Seán P. O'Malley. "We have made progress strengthening our financial condition and improving our ability to support the important works of the Church. We have been blessed with new lay and religious leadership and volunteer Catholic professionals who, along with our dedicated clergy, religious and lay staff, have brought a faithful commitment and their considerable talents and energy to support our efforts to grow and invigorate parish life, provide excellent Catholic education and continue our support of social justice and social service programs. While there are many challenges before us, we remain committed to rebuilding this Archdiocese and earning the respect and trust of those whom we serve."

Chancellor Jim McDonough said, "We have worked over the past twelve months to focus on forging a culture of service. That means providing better administrative service to the parishes, schools, hospitals and cemeteries where thousands work to fulfill the Church's mission. 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 bright future ministering to God's people with love, respect and dignity."

2006 Key Financial Points

• Total Net Assets increased from $329.7 million to $389.3 million. There are several contributing factors to this increase: the sale of property resulting in gains in excess of $63 million during the period and capital improvement projects increasing the value of parish real estate by almost $22 million. As a result of these factors, there is a corresponding decrease in the 2005 negative position in Unrestricted Net Assets of approximately $33 million.
• The Revolving Loan Fund deficit improved in 2006 by $12.4 million due to repayment of the Jubilee Debt forgiveness with proceeds from Reconfiguration funds.
• Overall Operating Loss for Central Operations has been reduced by $2 million from ($8.3) million in 2005 to ($6.3) million in 2006, with the goal of continued improvement toward a balanced budget. For 2007, we estimate ending the year at an operating loss of ($2.8) million which represents a balanced budget, excluding debt service.
• The Lay Employee Pension Plan came closer to being fully funded with the transfer of $12.7 million from Reconfiguration funds. The result is net assets available for pension benefits of $257.5 million, with accumulated benefits of $267.3 million leaving a shortfall of just under $10 million.

2006 Key Highlights/Initiatives

• Appointments of Very Reverend Richard M. Erikson, Ph.D., V.G. as Vicar General and Moderator of the Curia, James P. McDonough as Chancellor and Scot Landry as Cabinet Secretary for Institutional Advancement.
• Launched of the First Phase of the 2010 Initiative in Brockton, an effort to improve, strengthen and revitalize the Archdiocese of Boston's Catholic schools.
• Announcement regarding the start of the due diligence process towards a possible change in sponsorship of Caritas Christi to Ascension Health, the largest Catholic and largest nonprofit healthcare system in the United States.
• Restructured the Cardinal's Cabinet.
• Implemented a focus on service to parishes, schools, hospitals and cemeteries.
• Archbishop elevated to Cardinal.
• 15% increase in charitable donations to the annual Catholic Appeal (55% over the past four years).

Future Initiatives

• The Archdiocese is developing a long-range plan to strengthen and fully fund the Clergy Benefit Trust ensuring that our clergy's retirement, medical and financial needs are meet now and in the future.
• Continue to work towards a balanced budget, including debt service, by 2008.
• Continue to bring services closer to parishes.

The Archdiocese of Boston

The Archdiocese of Boston was founded on April 8, 1808 and was elevated to Archdiocese in 1875. Currently serving the needs of approximately 2 million Catholics, the Archdiocese of Boston is an ethnically diverse and spiritually enriching faith community consisting of 295 parishes, across 144 communities, educating nearly 50,000 students in its Catholic schools and 156, 000 in religious education classes each year, ministering to the needs of more than one million patients annually in its hospitals and 200,000 individuals through its social service outreach. Mass is celebrated in some twenty different languages each week. For more information, please visit www.rcab.org.

Copyright © 2007 Archdiocese of Boston; all rights reserved