Abuse claims, parish woes put ‘financial pressure’ on archdiocese
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Chicago’s Catholic church is bracing for more multimillion-dollar payouts over priest sex-abuse cases and continues to see large financial losses at many schools and parishes, according to financial statements released Wednesday.
Amid those financial woes, there are plans to close or consolidate dozens of parishes, as the fate of schools remains unclear.
“The Archdiocese of Chicago faces continued financial pressure in two key areas,” Archbishop Blase J. Cupich’s finance team said in a written statement accompanying the church’s 2015 financial reports. “Despite recent progress, some of our parishes and schools have low parishioner and/or student counts, unstable operating results and unsustainable capital repair needs.”
Also, the statement said, “The financial cost of misconduct has had a significant impact on our ability to support the mission of our church and is one of the drivers of our negative net worth” at the pastoral center, the archdiocese’s administrative office.
The archdiocese reported assets valued at $3.5 billion — most of that land, equipment and parish buildings, some of which are in need of major construction work. It remains the third-largest archdiocese in the United States, with more than 2.2 million parishioners, 351 parishes, 193 elementary schools and six high schools. Other Catholic high schools are operated by various religious orders.
Expenses at archdiocese schools exceeded tuition and fees by $40.2 million in 2015 and $38.1 million in 2014. Parish revenues, along with grants from the pastoral center, covered those losses.
Most recently, the archdiocese announced plans to close St. Adalbert Parish in Pilsen. Given its financial condition, more parish cuts are in the works, worsened not only by population shifts within its borders of Cook and Lake counties but also by a dwindling number of priests.
“While we do not have specific plans for closures, we do estimate that upcoming planning efforts will likely result in 240 to 270 parish configurations versus 351 parishes today,” archdiocese spokeswoman Susan Burritt said. “There are different models for parish configurations, however, and some parishes may become part of multi-site parish models. . . . We do not have any estimates for schools.”
Beside aging buildings and dwindling student and parishioner counts at some parishes, the archdiocese continues to feel the crunch of the priest sex-abuse scandal. Over the past three decades, the Chicago church has paid more than $140 million in settlements to sex-abuse victims, including more than $35 million since summer 2012, according to its financial statements.
In the past three years, the church also has increased its reserve fund for potential abuse-related and other liability payouts by 84 percent — from $91.6 million to $168.6 million. The amounts for which future abuse cases might be settled “is subject to precedents established by pending court cases . . . and additional cases that may be asserted in the future,” archdiocese auditors noted.
While most abuse payouts stem from cases before 1992, the church has been hit with new claims against the Rev. Daniel McCormack, who pleaded guilty in 2007 to sexually abusing five children at St. Agatha parish.
In what could be another hit to the church’s checkbook, a Cook County judge ruled in February that a man who says McCormack abused him will be able to ask a jury to potentially award him punitive damages, in addition to compensatory damages for pain and suffering. That could open the door for other victims to do the same.
The archdiocese reported paying out $5 million in abuse-related settlements in its 2013 budget year, $16.7 million in 2014 and $3.7 million in 2015. Since the end of the most recent budget year — on June 30, 2015 — it has paid an additional $10.8 million in settlements, its auditors reported.
Funding for sex-abuse settlements has come from the sale and leasing of assets, not parish collections, the archdiocese says.
Under the law, religious institutions are obligated to release virtually no financial information. But the archdiocese releases portions of its books in the past to build credibility with parishioners. More recently, it has posted its financial statements online.
Among the details in its 2015 reports:
• Parish collections dropped slightly, to $214.4 million in 2015 from $215.9 million in 2014. The financial statements do not break out parish-by-parish receipts.
• The archdiocese had $189.5 million in cash and cash equivalents.
• The pastoral center operated at a loss of $4.6 million — an improvement from the 2012 loss of $75.6 million.
• The archdiocese borrowed $160 million between 2012 and 2013 to meet cash-flow needs. In all, its borrowings totaled $176.2 million.
• Its investment portfolio totaled nearly $1.7 billion — about $41 million more than at the end of 2014.