Diocesan finances stable amid strong investment returns, successful charity appeal

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PROVIDENCE — The annual audit of its finances shows the Diocese of Providence closed out fiscal year 2016/2017 in a stable position thanks to a growing economy that has produced strong returns on its investments coupled with a successful Catholic Charity Appeal last spring.

The upward trend in investment returns has carried into the first half of the current fiscal year as well.

While the diocese experienced a 9.4 percent return on its investments as of June 30, 2017, an additional 7.1 percent gain during the next six months ending Dec. 31, 2017, has produced a combined 18-month return of 16.5 percent.

“We’ve had a very stable year and benefitted like everybody else through exceptionally good investment returns,” said Michael F. Sabatino, chief financial officer for the diocese.

Another indicator of fiscal stability detailed in the audit report — a user-friendly copy of which is included in this week’s edition, with the full report available for viewing on the diocese’s web site at www.dioceseofprovidence.org — is last year’s successful Catholic Charity Appeal.

The Appeal, whose proceeds are used to support the numerous outreach programs provided through the diocesan Office of Catholic Charities and Social Ministry, nearly reached its $8 million goal, receiving $7,883,052 in contributions.

“Of the nearly $8 million raised in the Appeal, $433,000 went back to our parishes who exceeded their Catholic Charity Fund goal,” Sabatino said.

The Catholic Cemeteries Office is highlighted as an area of diocesan operations experiencing growth.

Last year, under the new leadership of Director Anthony Carpinello, CCCE, CCE, Catholic Cemeteries realized a net profit of $421,000.

Sabatino said the department is continuing to work on upgrading diocesan property by repaving cemetery roadways and installing new roofs on chapels.

He noted that Catholic Cemeteries is seeking to build on its solid financial position in the current fiscal year by breaking ground later this spring or summer on a new mausoleum at St. Ann Cemetery in Cranston.

While the diocese experienced strong returns on its investments and ran a successful charity appeal, it also held the line on expenditures, seeing only a modest increase in spending over the previous year.

Operational expenses increased a modest 4.8 percent for both the General Fund and Catholic Charity Funds to $13,856,328, compared to $13,213,466 spent in fiscal year 2015/2016.

“All of these factors were helpful to our diocese as we remain faithful to the mission of evangelization and to our joy-filled commitment to the many corporal and spiritual works of mercy that we provide to the people of our state and beyond,” Bishop Thomas J. Tobin said in a statement announcing the report, which was examined by the independent auditing firm Mayer, Hoffman and McCann, P.C., and reviewed and accepted by the Diocesan Finance Council.

“Even with providing modest increases to lay and priest compensation, we were able to keep expenditures closely aligned to prior year levels,” Bishop Tobin said.

One area of diocesan finances that reversed a positive trend in fiscal 2016-17, however, centered on its line of credit. From a one-time high of $18 million when Bishop Tobin was installed about 13 years ago, the credit line was reduced to about $1.2 million in fiscal year 2015/2016.

But with the closure of the Cluny School in Newport last summer, the diocese, which already owned the property, assumed its outstanding bond debt.

“The school had $1.7 million of debt on it because of prior capital renovation work, so we decided to buy out the debt,” Sabatino said, when asked why the credit line had grown to $2.9 million in the report.

The school, which occupies 4.4 bucolic acres in the former Hammersmith Farm area of Newport, is currently on the market for $2.9 million.

When the property is sold, the $1.7 million which increased last year’s debt will be paid off, and the diocese will continue its practice of allocating the proceeds of non-ministerial property to paying down the line of credit, Sabatino said.

Looking ahead, the diocese is currently in the first year of its two-year capital campaign, “Grateful for God’s Providence,” which seeks to raise at least $50 million to assist various areas of the diocese, including Catholic education, major seminarian training, the Priest Retirement Fund and upgrades to the Cathedral of SS. Peter and Paul as the 150th anniversary of the Diocese of Providence approaches in 2022.

The campaign effort will also benefit individual parishes as well.

Some of the campaign’s upfront expenses and early pledges are factored into the fiscal year 2016/2017 audit report.

“The report shows that we have continued to do well in our fundraising efforts,” Sabatino said.

Bishop Tobin said that as the diocese moves forward, fiscal year 2017/2018 holds much promise for the Diocese of Providence.

“We might be helped by an economy that seems to be growing stronger both nationally and locally,” the bishop said.

“But our highest aim will always be for our Diocese to remain faithful to our mission and to continue to provide vital services and programs to the people of our State and beyond.”