The New Normal:
Restructuring (Arch)diocesan Operations in light of
Changing Demographics
September 9, 2013
[email protected]
Deacon Frank L. Kurre
Managing Partner – Metro New York Cluster
National Managing Partner Emeritus - Not-for-Profit Practice
[email protected]
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The Current State of our Church in the U.S.
• Declines in Northeast and Midwest in number of active
Catholics.
• Shifting demographics to South, Southwest and West.
• Continued rapid growth in number of Hispanic Catholics.
• Fallen away Catholics attracted to evangelical groups and
other Protestant denominations.
• Aging infrastructure of facilities with extensive deferred
maintenance in many dioceses.
• Infrastructure built in the 1940's through 1970's in many
parts of the country is no longer sustainable.
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The Current State of our Church in the U.S.
• Decline in vocations – priests and religious.
• The diaconate continues to expand in many (arch)dioceses
– over 16,000 active deacons in the United States currently.
• Need to build more lay participation in the Church in many
places.
• Lingering effects of this past decade's scandal still felt.
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Effective Redeployment of Resources
• Many (arch)dioceses have been restructuring operations in
order to streamline operations and reduce costs.
• Reducing central costs – Chancery operations – in order to
lead by example.
• Consolidation of parishes/sharing of parish resources.
• Centralization or regionalization of parish business
functions.
• Regionalization of schools/closing of schools with low
enrollment – in many dioceses high schools are thriving
and many elementary schools are experiencing difficulties.
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Catholic Cemeteries
• Catholic Cemeteries – surpluses which have supported
other operations may be a ticking time bomb. Several
(arch)dioceses have seen a significant decline in the
surpluses generated by their cemeteries.
• Shifting demographics – less Catholic cemetery burials and
more cremations in many (arch)dioceses.
• Catholic Cemeteries – present value obligation of future
perpetual care obligations.… Has this actuarial calculation
been calculated? Has the related obligations been
recorded on the financial statements and/or disclosed in the
footnotes to the financial statements?
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Catholic Cemeteries
• Can we market our cemeteries more effectively?
• Can we sell additional services – i.e., blanket/flower
program - to generate additional revenue?
• How much profit can we make from the building of crypts?
• Can we sell future revenue from cemeteries to for-profit
entities (to generate substantial up-front cash and
significantly reduce the perpetual ca while maintaining
control of the "Catholicity" of the cemeteries and
maintaining ownership over the cemetery property?
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Fundraising
• Establishment of separate Catholic foundations to raise
funds.
• Capital Campaigns.
• Bishop's Annual appeals including appeals to vendors.
• Planned Giving – significant opportunities to expand
planned giving to generate substantial revenue– i.e.
Salvation Army example.
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Consolidation of Ministries/Operations
• Consolidation of ministries/operations across dioceses –i.e.
Seminary system consolidated for the Archdiocese of New
York and Dioceses of Brooklyn and Rockville Centre.
• Consolidation of ministries/operations across parishes –
CCD programs, CYO programs, Parish outreach, etc.
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Real Estate Management
• Centralized management over real estate.
• Centralized sale of vacant and under-utilized facilities and
rental of facilities.
• Consolidating rectory living.
• Conversion of convents, rectories and schools into
affordable housing for the elderly.
• Avoid external leases with third parties - try to utilize parish
and other diocesan properties for all space needs.
• Utilize excess parish properties to pay off loans to diocese.
• Refinance external debt using resources throughout the
diocese.
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Corporate Structures
• Decentralization in some situations.
• Centralization in other circumstances.
• Establish corporate entities for parishes, schools and other
entities that are not currently incorporated.
• Ensure all pension and other plans are in legal trusts.
• Consider keeping large investment portfolios in separate
corporate entities or trusts away from operating entities.
• Too many corporations?
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Questions?
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