PROVIDENCE — The Diocese of Providence closed out FY 2023 on a strong positive note, with its investments producing a return of 11 percent for the year ending June 30, 2023.
According to the annual audit report of its finances, diocesan investments were up nearly $20 million over FY 2022, at $219,278,482 for FY 2023.
Chief Financial Officer, Michael F. Sabatino, CPA, noted, as in prior years, a significant amount of these assets are not diocesan reserves, but through the various financial activities listed, they create the means for parishes, schools and agencies to pool their assets to gain maximum investment returns and reduce management consulting fees.
“We’re very happy that we’ve concluded a successful year. It’s been another good year for the diocese’s overall operations,” said Sabatino, who noted that investments continued to remain in positive territory for the first six months of FY 2024, where they were up six percent.
The audit report, produced by the firm CBIZ & Mayer Hoffman McCann, P.C., shows that total diocesan assets, which include all properties and holdings, are up $14 million, to $306 million, compared to $292 million in FY 2022.
“A review of the report shows positive financial results for the Diocesan Central Administration activities,” Bishop Richard G. Henning said in a letter accompanying the release of the report.
“Overall, I share the observation that our diocesan finances are solid and stable. It was good to see the positive results achieved during the past fiscal year. There will likely be future challenges and changes ahead for the diocese, both ministerial and financial. But we are a hope-filled diocese that confidently relies on both the providence of God and the goodness of its people. For both these blessings, I am profoundly grateful.”
The report shows the 2023 Catholic Charity Appeal raised $7,222,000, exceeding its $7 million goal.
“That was a strong achievement, and very helpful to our ministries, which rely on these donations to support their operations,” Sabatino said.
In FY 2023, a longtime rolling deficit, which resulted from the diocese continuing to fund Appeal-supported ministries, even when the campaign did not raise enough to do so, was eliminated.
The diocese is in the final stages of its Grateful for God’s Providence capital campaign, which raised more than $50 million in pledges to support the diocese and parishes.
“We’ve got additional pledges to collect and planned gifts still to be realized which will eventually come in to complete the campaign,” Vicar for Planning and Financial Services Msgr. Raymond B. Bastia said.
“We wrapped up the cathedral towers renovation and it was a great success,” he said, noting that after one remaining pledge is received, the entire cost of the $9.5 million renovation of the towers will be covered.
Sabatino said the diocesan line of credit was refinanced internally to a lower interest rate and that other debts are being paid.
“We continue to make timely payments on diocesan debts,” he said, including $10.1 million related to first diocesan lay employees’ pension plan buyout, down from $10.8 million the year. The diocesan Interparish Loan Fund, an investment vehicle in which parishes bank their reserves and receive favorable interest rates on loans to fund building projects, had $64,938 in deposits, and $37.5 million in outstanding loans at the close of FY 2023.
“Loans are being paid off and parishes are investing with us to help fund the projects of other parishes at a more advantageous rate of interest,” said Msgr. Bastia.
Msgr. Bastia noted that the Catholic Foundation of RI, which is a separate corporation under the Diocese of Providence that manages donations that are restricted to charitable purposes that are not owned by the diocese, reported assets of $140 million, an increase of $13 million over the previous year.
Sabatino indicated that the increase can be attributed to both new gifts and the market returns of 11 percent. “Donations to the Catholic Foundation are generally restricted to charitable purposes and are not owned by the office of the Diocese of Providence. They are not part of diocesan assets,” he said.
Parish income is up slightly, but stable, Msgr. Bastia said, with parish assessments remaining steady over the last couple of years.
Some of the parishes that meet the eligibility requirements continue to be helped by the federal post pandemic ERC (Employee Retention Credit) program,” Msgr. Bastia said.
Larger diocesan entities, such as its schools and nursing homes, received the most benefit from the program, based on cash credits tied to their payrolls.
“It’s provided millions of dollars in credits,” Sabatino said. “Credits taken earlier are being realized as dollars now.”
Msgr. Bastia indicated that Catholic schools in the diocese have shown a modest increase in enrollment after the pandemic.
Parishes and schools are also reviving more post pandemic as they have been resuming larger fundraisers, leading to a rise in income.
He also noted that Catholic schools in the diocese have shown a modest increase in enrollment after the pandemic.
One area of diocesan operations that is being monitored closely is Diocesan Cemeteries.
Changes in burial practices have led to fewer Catholic burials, which is having a direct financial impact on operations.
Sabatino said that Anthony Carpinello, director of Diocesan Catholic Cemeteries, has discussed with state officials the number of Department of Human Services burials the diocese provides.
Sabatino noted that Catholic Cemeteries, which account for 98% of DHS burials and cremation, have indicated they will need to cap the number of burials they can provide if there is not an increase in DHS’ basic allowance payments for burial crematory expenses.
“Msgr. Bastia and I continue to work closely with cemetery leadership,” Sabatino said. “It’s an area of concern, but the mausoleum continues to be marketed.”
The full audit report may be viewed on the diocesan website at www.dioceseofprovidence.org, while a summary version will be included in the March 21 edition of the Rhode Island Catholic.
