The National Catholic Review
Thomas J. Healey
What Catholic leaders have learned from the world of business
Image

The first visit of Pope Benedict XVI to the United States focused the media on many of the ills plaguing the Catholic Church, from the sexual abuse scandals to the shortage of priests to the shuttering of schools and parishes by cash-starved dioceses. What receives virtually no exposure, by contrast, is the revolution quietly taking hold across the country in the way parishes and dioceses manage themselves financially and administratively. For a growing number, this has meant adopting the principles of financial transparency, accountability, economies of scale and personnel development—the same principles that have fueled the world’s most successful corporations.

Bishop Dennis Schnurr, treasurer of the U.S. Conference of Catholic Bishops, set an appropriate tone when he said, “Parishes cannot afford to be mom-and-pop businesses with ‘Trust Me’ as their motto.”

Transparency in Boston

The Archdiocese of Boston—no stranger to scandal—has become something of a poster child for the movement to greater financial stewardship and reporting within the U.S. Catholic Church. Determined to put an end to the secrecy of the past, the archdiocese under Cardinal Sean O’Malley made an unprecedented commitment to openness several years ago through its Financial Transparency Project. Spearheading the initiative was a volunteer team of lay experts that included academics, accounting professionals and business leaders led by Jack McCarthy, who is a principal at Harvard University’s Hauser Center for Nonprofit Organizations and was global practice leader for education at PricewaterhouseCoopers. Blessed with this fresh set of eyes, the Archdiocese of Boston issued online (www.rcab.org) a full disclosure report on its financial condition, including sexual abuse settlement information and an insightful look inside the organization of the archdiocese. Among the tools used by the Transparency Project for its review was a management discussion and analysis, the same vehicle used in 10K reports filed by public companies.

Cardinal O’Malley put the project in proper context by explaining: “[W]e hope to provide the faithful as complete an understanding as possible of our financial status…The commitment to financial transparency is a key element of re-establishing trust with the people of this archdiocese. It will now be part of our standard practice.”

Comprised of C.E.O.’s and senior executives of some of the country’s leading corporations—including Adobe Systems, Goldman Sachs, Korn/Ferry and McKinsey & Company—as well as major nonprofit, philanthropic and educational organizations, the National Leadership Roundtable on Church Management works with bishops, pastors and other church officials, making its members’ skills and experience available to the church.

Uncovering Economies of Scale

In addition to Boston, the Diocese of Tyler in east Texas has actively embraced best-in-class practices. Nearly to the point at which it could no longer afford health insurance benefits for its lay employees, the diocese formed a select committee to explore the creation of a common health plan for all 15 dioceses across the state of Texas. The committee discovered that economies of scale could be used to tremendous advantage by building a single Catholic benefits group. Indeed, savings to all 15 dioceses—if they opted to participate—and to their 11,000 employees would amount to around $6 million from the approximately $43 million spent annually for health insurance.

To make the plan work, the committee encouraged all the dioceses to take part. While 100 percent participation proved impossible because of the differences among dioceses, the committee did manage to attract their attention. Four of the dioceses created a benefits package and put it out for bid; they selected Mutual of Omaha as vendor for the new Catholic Employee Benefits Group, which currently covers 1,100 people, including dependents. Now other dioceses have expressed an interest in joining the program as soon as their current policies expire.

Economies of scale are also central to an innovative new organization that identifies collaborative solutions to challenges facing the Catholic schools of six archdioceses and dioceses in Maryland, Virginia, West Virginia, Delaware and the District of Columbia. In the area of finance, the Mid-Atlantic Catholic Schools Consortium is developing plans for centralized purchasing of such essentials as textbooks, transportation, waste disposal and energy. The goal is to capitalize on the collective buying power of the consortium and its member dioceses. Similarly, the organization plans to launch an interdiocesan leadership institute to provide professional and leadership development to current and future Catholic school leaders, including lay principals, administrators, teachers, pastors and seminarians. Its founders view the institute as a model that could eventually prove useful in other reform-minded diocesan school systems.

Standards of Excellence

The Diocese of Gary, Ind., affords yet another telling sign of systemic change occurring within the Catholic Church. Gary became the nation’s first diocese to adopt formally the new Standards for Excellence for Catholic dioceses, parishes and nonprofits. This far-reaching code calls for strategic planning, annual finance audits and reports, performance evaluations and a commitment to transparency. Bishop Dale Melczek reported that his diocesan priests’ council, after carefully studying the sections relating to finance, management and human resources practices for parishes, recommended implementing the standards throughout the diocese.

Other Catholic dioceses and nonprofit organizations are now starting to implement the standards as well. They are actively embracing the laity, using lay/clergy cooperation as a vital tool in helping the church transform its stewardship practices. In the process, the church is bringing itself into a 21st-century operating mode.

Thomas J. Healey, a retired partner of Goldman, Sachs & Co., is currently a senior fellow at Harvard University’s Kennedy School of Government. He is treasurer of the National Leadership Roundtable on Church Management.

Comments

peggie thorp | 9/12/2008 - 7:51am
The authors of "A Church Transparent" overlook the most important factor in the good news of changing Church practices - the people in the pews. It was organizations like Voice of the Faithful and others who were out front in the language of financial accountability, not CEO's and business groups. VOTF received no "embrace" for the courage of our voices - we remain banned from meeting on Church property in over half a dozen US dioceses. Peggie L. Thorp
Joseph McGirr | 9/8/2008 - 2:58am
Two quotes ring loudest to me: " principles of financial transparency, accountability, economies of scale and personnel development" and "Parishes cannot afford to be mom-and-pop businesses with ‘Trust Me’ as their motto.” BRAVO. Along with continuing to fund its existing budget, my local parish is seeking to raise $6M for a parish center. I expect all that Mr. Healey writes of.
SIMON FALK | 8/29/2008 - 11:37pm
I am writing from Australia but this article is very interesting and it raises two questions for me: 1) How do we run a spirituality of pastoral business parallel and in rleation to the economic dimension in the article? In other words how do we "sell" this as part of our mission to bring forth the kingdom/reign of God? 2) This model appears to suit well for urban situations. How could it be related to some of our very small rural parishes?
Michael Manning | 8/29/2008 - 5:13pm
God save the church if its starts emulating the accounting practices and business principles of the leading investment banks, Wall street firms and Fortune 500 companies. Ethical stewardship and financial and moral accountability were not invented by American entrepreneurs. How is it that given the financial debacles on Wall street decade after decade, we're not slightly more humble about the laudable practices of American business, especially when it starts preaching to the Church.