Applying 'best practices' to Catholic parishes and nonprofits

Too often the Catholic Church learns the value of accountability and transparency the hard way. In Philadelphia, for example, a senior member of the archdiocesan staff walked off with more than $900,000 in church proceeds before the theft was uncovered in the summer of 2011. The newly arrived archbishop, Charles Chaput, O.F.M.Cap., was outraged at the theft, proclaiming, “This only makes the need for tight financial controls and accounting procedures more urgent.” In a letter to parishioners he vowed that “every aspect of our shared life as a church will be subject in the years ahead to the kind of clarity, greater accountability and careful stewardship our people deserve.” And the Vatican, which has historically kept its business under the tightest of wraps, is edging toward greater openness in response to scandals and revelations of wrongdoing that have plagued the church worldwide. Clearly, change is in the air.

Once the province of a handful of church outliers, the notion of operating by the kinds of “best practices” that define top businesses in the United States is gaining traction among a growing universe of dioceses, parishes and Catholic charities. More than 450 parishes in 58 dioceses, as well as 54 Catholic nonprofit organizations nationwide, are implementing a comprehensive tool called Catholic Standards for Excellence, which commits them to best practice policies and procedures in fiscal management, governance, human resources and fundraising.

Furthermore, an increasing number of Catholic colleges and universities are offering courses in church management. Catholic Standards for Excellence, for its part, has provided content for such courses at Fordham University, Villanova University, Loyola University in New Orleans, Boston College’s School of Theology and Ministry, Saint John’s University in Collegeville, Minn., Saint Mary’s University in Minnesota and St. Mary’s Seminary in Baltimore. Catholic Standards for Excellence has also figured prominently in a training program called Toolbox for Pastoral Management, which has given scores of new pastors nationwide the skills and know-how they need to handle the complexities of church management in the 21st century.

Measuring Up to Public Scrutiny

“Transparency is more important than ever given the public scrutiny we face today,” observes Patrick O’Donnell, director of mission advancement for Dear Neighbor Ministries, a Catholic nonprofit sponsored by the Congregation of St. Joseph in Wichita, Kan. “We want to be able to say to any donor, whether it’s someone with $10 or a large foundation or government grant, ‘Hey, we meet all these standards and our board of directors has signed off on them.’”

Dear Neighbor Min-istries, which in the course of a year serves some 10,000 disadvantaged people within the community, is implementing Catholic Standards for Excellence with the help of the National Leadership Roundtable on Church Management, which developed the program and is actively promoting it nationally. By partnering with the Leadership Roundtable, the Wichita nonprofit commits itself to the program’s 55 best practice standards, which range from accurate financial reporting and record-keeping to meaningful performance evaluations for all board and staff (paid as well as volunteers) to openness with the faithful and the community about its mission, finances and activities.

Dear Neighbor Ministries realized it already met many of the best practices, such as conducting annual audits by an outside firm and maintaining written job descriptions, when it considered partnering with the program last year. But, as Mr. O’Donnell points out, the nonprofit was equally aware that Catholic Standards for Excellence could grant its board of directors—which was transitioning to a heavier lay membership—“ownership” for the first time over those strong policies and procedures. In the area of job descriptions for staff members, he elaborates, the program gave the 19-member board the impetus to “go back and re-evaluate them to make sure they are up-to-date and meeting the operational needs of our organization and the workplace needs of our employees and volunteers.”

The Leadership Roundtable was hardly reinventing the wheel when it developed Catholic Standards for Excellence. Indeed, it adopted the core Standards for Excellence Program originated by the Maryland Association of Nonprofit Organizations, and made it consistent with the church context and ecclesiastical structures, and in full compliance with canon law. Peter Denio, project manager for Catholic Standards for Excellence, points out that best practices that already exist in the corporate, nonprofit and philanthropic sectors, and even within other parishes and dioceses, were embodied in the Leadership Roundtable version. “We believe these guidelines can provide users with a huge operational advantage, and for that reason we’re committed to weaving them into the fabric of the church,” he said.

The best practices message has found a responsive audience. “Diocesan offices clearly need to be run in a more businesslike way,” said Penny Warne, the pastoral associate responsible for liturgy and administration at Holy Spirit Parish in the Diocese of San Jose, Calif., which introduced the platform five years ago, “and the Standards for Excellence allows you to see where policies and improvements are needed.” For Holy Spirit Parish, which took root in the orchards south of San Francisco 50 years ago and today serves some 2,000 families, those unmet needs included protecting the privacy of information provided by all of its members. For instance, newly promulgated rules—consistent with Catholic Standards for Excellence—prohibit parish membership lists from becoming fodder for commercial solicitation by either church or non-church members.

Teaching the Business Basics

At the same time, though, the parish benefits from the availability of more information because it is part of an online forum run by Partners in Excellence (the implementation arm of Catholic Standards for Excellence), which enables participants to share and discuss best practices with a national audience of peers and content experts. How, specifically, is this helpful? “We were looking for a strong, master’s degree-type program in church administration,” recalls Warne, “and posted our need with the online forum. We got some excellent responses on existing and potential models,” including one nearby at Santa Clara University’s graduate program in pastoral ministries. Better yet, she adds, the forum allows for follow-up conversations either online or off.

Best practices was hardly a new concept to the Diocese of Knoxville, Tenn., when it joined Partners in Excellence three years ago. Previously, it had brought together priests each month for a program, known as Shepherding Them Rightly, to learn the basics of accounting, construction, human resource management, resolving interpersonal conflicts and other skills needed to administer a parish effectively. “Priests will tell you themselves they didn’t go to the seminary to become business managers,” acknowledges Marcy Meldahl, director of employment services for the diocese, who created the educational initiative. “And because many of them have less time to apprentice before becoming pastors, Shepherding Them Rightly provided a more systemic way to get them ready.”

Even with its own homegrown program, the Diocese of Knoxville saw the need for an expanded best practices effort to serve as a model for its 47 parishes and four missions. To that end, it was given unequivocal support by Bishop Richard F. Stika to become a member of Partners in Excellence. “Parishioners are held accountable in their daily lives,” allows Meldahl. “If they don’t use their money wisely or manage their budgets smartly they suffer. The same principle applies to the church. If we have a system in place that holds us accountable, that embodies best practices and that lets people see exactly where their money is going, then we benefit in a host of ways, including fundraising.”

The diocese is currently working with the Leadership Roundtable through a pilot project in four parishes to introduce Catholic Standards for Excellence, a step that could eventually make annual audits, employee performance reviews, bookkeeping procedures and many other best practices uniform across the organization.

Energizing a Nonprofit’s Board of Directors

As one of the earliest converts to Catholic Standards for Excellence, Catholic Charities in the Diocese of Houma-Thibodaux, southwest of New Orleans, has experienced benefits of another kind. “The Standards for Excellence have energized our board of directors and led to us forming active committees in areas like short-term planning, governance and personnel,” explains Rob Gorman, director of Catholic Charities for the Louisiana diocese.

That, in turn, has prompted a healthy examination of programs and ministries vital to the mission of his nonprofit. One of those was a “micro-enterprise program” that helped local citizens with limited financial resources get loans from banks to fund small start-up businesses. When participants began defaulting on their loans, it became clear to Catholic Charities that the micro-enterprise model was not working, and the board decided to find out why through a special evaluation committee it created. Using impact measures provided by Catholic Standards for Excellence, the panel concluded that while the lending part of the program was broken, the educational component—which taught business skills and the value of entrepreneurship to individuals—was not, and recommended that it be continued. Without the board’s hard work and honest assessment, Gorman concedes, the entire program, in all likelihood, would have been scuttled.

At many parishes and dioceses around the country, Catholic Standards for Excellence has prompted a healthy assessment of entrenched ways of doing business—and set the stage for change. In Gary, Ind., the first diocese in the United States to introduce Catholic Standards for Excellence, a study by the University of Notre Dame found that many of the 70 parishes were feeling the program’s impact. There was a statistically significant change in attitude toward the program’s guiding principles, which covered such bases as governance and advisory bodies; conflict of interest, both financial and legal; and openness. One pastor commented, “We’ve been able to use the standards to resolve disputes and provide clarifications on important policies. Things that once looked arbitrary are now viewable in a new light.”

While many factors go into averting the kind of in-house financial breach that shook the Archdiocese of Philadelphia, there is no denying that the myriad controls, procedures and oversight provided by Catholic Standards for Excellence can provide a strong protective bulwark, and are a worthy first step toward preventing such crises in the future.

Thomas J. Healey is a retired partner of Goldman Sachs and currently a senior fellow at Harvard’s Kennedy School of Government. He served as assistant secretary of the treasury under President Reagan and is a founding member of the National Leadership Roundtable on Church Management. Michael Brough is director of strategic engagement with the National Leadership Roundtable on Church Management and works with dioceses, parishes and nonprofit organizations implementing Catholic Standards for Excellence .

Comments

Tim O'Leary | 8/10/2013 - 3:38pm

An excellent way to provide potential donors the confidence that the financials will be well handled. I would say that another risk to charitable contributions we have today is the class action types of lawsuits for the child abuse handling mistakes of the past. It is prudent that institutional structures be put in place to protect any new charitable contributions from past mistakes, so that they go to the truly needy today and not into the wallets of the already very rich lawyers.

Michael Barberi | 8/8/2013 - 9:15pm

A most prudent decision to involve the expertise of lay people and to institute the concept of best practices. This finally came about due to an honest evaluation of the many problems facing the Church.

Now, all that is needed is for the Church to address another of its major problems, namely, the profound contradictions between the advice given in pastoral counseling sessions to the laity by priests, and Magisterial teachings as evidenced by the significant percentages of all priests, in particular younger priests, who disagree with many Church teachings as reported by the 1994 and 2002 LA Times Surveys of U.S. Priests.