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Spotlight Report

As pledges lag, church speeds cuts

Archdiocesan spending to get up to 40% trim

By Michael Rezendes and Stephen Kurkjian, Globe Staff, 6/17/2002

Law's letter soliciting donations
Church officials struggling to cope with the clergy sexual abuse scandal are accelerating steep budget cuts already planned for scores of programs, including those that benefit the urban poor, as pledges to the annual Cardinal's Appeal lag well behind what they were last year, according to the Boston Archdiocese.

Many church pastors have previously said that regular Sunday collections have dropped following months of disclosures that Cardinal Bernard F. Law kept priests accused of sexual misconduct in active ministry. But now, officials say, the scandal has hit central fund-raising so hard that overall church spending by the archdiocese will be slashed by as much as 40 percent during the fiscal year that begins July 1.

''We don't have the revenue we had last year at this time. But we are committed to living within the resources we have, so we will have to proceed to make further cuts,'' said Chancellor David W. Smith.

Other church officials said they are profoundly discouraged by the response to the Cardinal's Appeal - launched by Law during the first weekend of May - and the effect it will have on the church's mission. ''So far the returns for this election have been very discouraging,'' said one high-ranking official directly involved in church finances, likening the response to the Cardinal's Appeal to a referendum on Law's tenure. ''Quite frankly, the whole thing is a mess.''

As the archdiocese prepares to implement Draconian budget cuts and wipe out some smaller programs, Smith expressed reservations about plans by Voice of the Faithful, a nascent group of concerned parishioners, to organize an alternative fund-raising drive that would allow past donors angered by Law's leadership to bypass the chancery and give directly to church programs. ''I do not believe you can properly separate the mission of the church from the bishop,'' Smith said. ''To the extent that people go off on their own and establish their own priorities for funding programs, I don't think that's proper.''

While church officials say pledges to the Cardinal's Appeal are off by about a third compared with last year, some pastors said the drop in their parishes is much steeper. The Rev. Robert W. Bullock, pastor at Our Lady of Sorrows Church in Sharon, said parishioners there have pledged only $2,100 toward a goal of $35,000 set by the archdiocese - even though Bullock spoke at all Masses during the first weekend in May and stressed the critical nature of work funded by the appeal, including a ministry for the deaf and other programs. ''If that's any indication of the level of giving across the archdiocese, it's going to be a disaster for the ministries,'' Bullock said, adding that ''the pastors I've talked to are having the same experience I'm having.''

Not all priests said the Cardinal's Appeal was faltering as badly in their parishes. ''I have to say I'm pleasantly surprised by the numbers so far,'' said the Rev. Thomas J. Buckley of the Holy Family Church in Amesbury. Buckley said parishioners have pledged about $15,000 of a $36,000 goal.

Against the increasingly bleak fiscal backdrop, Smith also said the amount of money the church might have to settle the burgeoning claims of sexual misconduct ''is half the size that it was three months ago,'' although he declined to cite specific amounts. Last month, the church backed away from a $15 million to $30 million settlement of lawsuits filed by 86 alleged victims of former priest John J. Geoghan, convicted of sexual abuse earlier this year.

Pledges to the Cardinal's Appeal, the largest source of money for the church's operating budget, have reached $4.8 million since the first weekend in May, when it was announced. That $4.8 million compares with $7.5 million pledged at this time last year, said Ken Hokenson, chief development officer for the archdiocese.

Officials say the drop-off in pledges is due in large part to the fact that nearly a third of the 369 parishes in the archdiocese have postponed participation in the Cardinal's Appeal until later this year because they have recently asked parishioners to contribute to a new capital drive, the Promise for Tomorrow campaign.

But Smith also acknowledged that the scandal has hurt church fund-raising. ''There is obvious good from this issue having been brought into the public light, but a lot of people will be hurt by it because we will be unable to perform the good work we do to the extent we would like,'' he said.

Church officials hope that in some cases, loyal Catholics will cover cuts in spending by the archdiocese.

Because of a dispute with unionized teachers, Smith said he could not comment on projected cuts at archdiocesan high schools. But he said inner-city parish schools that receive subsidies from the archdiocese have been asked to prepare for 15 percent reductions in the coming fiscal year.

Smith, who also said archdiocesan salaries had been frozen, did not provide a list of specific cuts for other programs.

In the fiscal year now ending, three schools were consolidated into existing schools. But Smith said further consolidations will be made only when justified by declining enrollment and that, despite hard fiscal times, the church is planning to build a new large elementary school somewhere in Boston. ''Closing schools and walking away from our commitment to Catholic education is not in our future,'' Smith said.

But James E. Post, a Boston University School of Management professor and a cofounder of Voice of the Faithful, said he believes church fund-raising will continue to founder as long as it is tied to Law and his leadership. ''The cardinal has honed the message that if you turn over your five bucks or your 500,000 bucks you're doing it for Bernard Cardinal Law, and for a long time that played very well,'' Post said. ''But in the current circumstances, that's a deadly fund-raising message.''

Those circumstances include Law's continuing tenure, despite calls for his removal by influential Catholics, and a steady stream of new allegations about the role he played in a scandal that has engulfed the church worldwide since erupting in Boston in January.

Church documents released under court orders in scores of clergy sexual abuse lawsuits in Suffolk and Middlesex counties show that the cardinal was involved in awarding new assignments to priests accused of sexually molesting minors.

Still, Post said that even among irate Catholics, and those suspicious of the chancery's assurances that money from the Cardinal's Appeal will not be used to settle sexual abuse claims, support for church programs runs deep. To solve what Post described as a ''dilemma of conscience'' for those parishioners, Voice of the Faithful is preparing to announce a partnership with a nonprofit group that could enable donors to make tax-deductible contributions directly to programs run by the archdiocese, bypassing the chancery.

But Smith said the proposal is likely to run into resistance. ''Obviously we welcome any money,'' he said. ''But the proper format for the asset allocation is a task reserved for the bishop, so I would discourage people from doing that. If it is done in an uncoordinated way, it could be difficult to get money where it is most needed.''

Smith also said the financial difficulties of the archdiocese predate the sexual abuse scandal, noting that the church has faced annual deficits - this year's is expected to exceed $4 million - which it has covered by borrowing on a line of credit from Fleet Bank.

The church typically borrows during the middle of its fiscal year, Smith said, because money from the Cardinal's Appeal usually arrives in two bursts: in late May and early June after the appeal is made, and in late November and December, when many donors are looking for tax deductions.

To close the annual deficits and prepare for an anticipated drop in donations due to the economic downturn, Law last November ordered a 30 percent cut in operating expenses to be implemented over the next two fiscal years, beginning in July. But Smith said church revenues have dwindled so sharply following the abuse scandal that he is attempting to implement the entire 30 percent cut - and more - in one fiscal year. ''We may get the entire 30 percent in this coming fiscal year,'' he said, adding that a 40 percent target in overall spending reductions might be met. ''A balance needs to be struck between responsible stewardship and walking away from the church's responsibilities.''

Smith also said the archdiocese will not attempt to solve its immediate financial problems by borrowing from the Promise for Tomorrow capital campaign, which has generated more than $170 million in pledges and donations, of which about $40 million has been delivered and distributed to the building projects. In the past, Smith said, the archdiocese has sold assets to erase deficits and may do so again. One possibility would be to sell a 1999 gift of more than 20 acres of undeveloped land in Hingham. The choice real estate could be sold for an estimated $2.6 million if it is subdivided for single-family homes, according to realtor Richard F. Cahill of Jack Conway and Co.

Meanwhile, Smith and others working with the archdiocese said shrinking church revenues could also affect the ability of the archdiocese to settle sexual abuse claims and lawsuits. ''We don't think there is any legal basis for any of these claims, but we want to make a pastoral approach to the victims,'' Smith said.

Smith, who complained that at least a third of any legal settlement would go to attorneys for alleged victims, also said the church will continue to push for a so-called ''global settlement'' of sexual abuse claims that would include counseling and additional financial awards.

To settle all claims, Smith said, the church has nearly $50 million remaining in third-party insurance coverage to cover the archdiocese and individual priests for incidents of sexual misbehavior, the vast majority of which occurred before the archdiocese began self-insuring in 1989.

For some of those earlier years, he said, coverage has been exhausted. Private insurers, which provided coverage in those years, have often balked at covering acts of sexual abuse, he said, but had nonetheless paid past claims of close to $20 million, while the archdiocese paid $10 million through self-insurance.

Smith expressed hope that a resolution of all the pending claims could soon be reached with the archdiocese's remaining insurance coverage, under a settlement that would be administered by a third party to compensate victims.

Smith predicted that once there is a structured settlement agreement ''and a feeling that the church is not being ripped off by a bunch of plaintiff lawyers,'' then members of the laity ''will gladly reach out and give money for the support of the victims.''

Walter V. Robinson and Matt Carroll of the Globe Staff contributed to this story.

This story ran on page A1 of the Boston Globe on 6/17/2002.
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