Strong capital campaign leads to solid financial year for Diocese of Providence

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PROVIDENCE — Strong participation by parishes in the Grateful for God’s Providence capital campaign and continued stable parish assessments, coupled with modest market gains on investments produced a steady financial year for the Diocese of Providence, according to an annual report of diocesan finances for the fiscal year ending June 30, 2019, produced by the independent auditing firm Mayer, Hoffman, McCann, P.C.
In large measure, due to the capital campaign, diocesan overall net assets are up $28 million over FY2018. Of that $28 million, $14.5 was the net increase in assets directly attributable to the campaign, according to the report.
“We had a solid year,” diocesan Chief Financial Officer Michael F. Sabatino, said in an interview with Rhode Island Catholic.
Msgr. Raymond B. Bastia, diocesan Vicar of Finance, said that although the capital campaign was the biggest driver for the successful bottom line, last year’s modest, but steady market returns on investments helped overall operations, as did ordinary income, including overall parish assessments and budget offerings.
“That was a wonderful thing to have happened because it occurred within the conducting of two years of a capital campaign and of our annual charity appeals,” Msgr. Bastia said.
“It’s a testament to the generosity of our parishioners and members of the diocesan family. They’ve kept their level of giving the same during a time when they have also been asked to contribute even larger amounts in different ways.”
That includes contributing to the annual diocesan Catholic Charity Appeal, which provides the principal means of support for the day-to-day good works done by more than three dozen charitable outreach ministries and programs.
While the FY2019 campaign received donations totaling $7,020,000, compared to $7,454,000 the previous year, the generosity of donors ensured that the decline was not as steep as it could have been. Many parishes were also in the midst of conducting the Grateful for God’s Providence campaign, which, by contrast, is not primarily directed to diocesan operational needs but is endowment focused.
Grateful for God’s Providence donations will provide a foundation, mainly through endowments, for the future to support more broad-based programs, such as Catholic school tuition assistance, seminarian education, priest retirement assistance, social services and needed renovations to the Cathedral of SS. Peter and Paul.
Bishop Thomas J. Tobin expressed his appreciation to all who gave so generously of their time, talent and treasure at the parish and diocesan levels to make FY2019 a very successful year.
“I am grateful for the generosity of our priests and parishioners who have worked so hard and sacrificed to make this historic campaign a success,” Bishop Tobin said.
“Our generous charity helps so many of our fellow Rhode Islanders to come to know the truth of our faith,” he added. “With us they find a welcome and helping hand. By our efforts they find shelter and sustenance. Through our sacrifices they receive comfort and hope for their lives. Young and old, healthy or ill, longtime resident or newcomer to our community, through the work of our faith-filled diocesan family they encounter Christ.”
For year ending June 30, 2019, returns on diocesan investments were measured at 3.6 percent, while investment returns for the first six months of the current fiscal year are up 6.1 percent.
“It’s been a very strong first six months,” Sabatino said.
Another significant fiscal achievement realized in FY2019 was the payoff of the diocesan line of credit, which had stood at $2.9 million. The final payment was made possible through the sale of diocesan property to another religious congregation.
“We’ve had that line of credit for close to 20 years; at one point it had been as high as $18 million,” Sabatino said. “This is a wonderful achievement for the Diocese of Providence.”
The InterParish Loan Fund, which allows parishes to place their excess reserves on deposit with the diocese, which in turn uses the funds to make loans to parishes, schools and agencies to finance large capital projects, also had a good year.
As of June 30, 2019, the fund had on deposit approximately $47 million, with $7.5 million in outstanding loans.
“Parishes continue to deposit their excess reserves with the diocese, knowing they are receiving a good rate of return, and have access to their money in a timely manner,” Sabatino said.
The FY2019 financial report highlights the continued success of the Catholic Foundation of Rhode Island, which was established to build an endowment to provide a means for individuals and organizations to ensure long-term financial stability for charitable, religious and educational institutions within the Diocese of Providence.
As of June 30, 2019, the Foundation reached a record high with investments in excess of $100 million.
“The Catholic Foundation continues to do very well,” Msgr. Bastia said.
“The Foundation board has been enriched and expanded with new membership.”
Diocesan Catholic Cemeteries is another positive area highlighted in the report.
While the Cemeteries’ operations produced a small surplus for the year, the outlook for the future is positive as a grand, new mausoleum at St. Ann Cemetery in Cranston continues to take shape, as well as orders for burial plots for the future.
“Cemetery operations continue to run well,” Sabatino said.
“They continue to do much-needed capital work throughout their nine cemeteries and are also approximately halfway complete with the new mausoleum. To date, we are on budget and on time for completion. We’ve got approximately 11 percent of crypts sold during the pre-construction and construction marketing phase.”
Regular reviewers of the diocesan financial report — which is available for viewing on the diocesan website at www.dioceseprovidence.org, while a “User-Friendly” hard copy of the report is included with this week’s edition — will note greater detail provided in this year’s documents as a result of changes in the accounting standards for nonprofit organizations used by the Financial Accounting Standards Board (FASB).
Footnotes providing greater level of detail are included to ensure compliance with natural classifications of expenses.
“It’s a different way of reporting expenditures to provide more clarity to the reader,” Msgr. Bastia said.
“People will see better clarification of the line items. It’s a requirement for nonprofit organizations.”