To avoid layoffs, some dioceses and parishes have applied for and received federal payroll aid, but some applied after initial funding had run out, and others simply haven’t applied.
In any case, federal payroll aid is intended to cover a short-term decrease in revenue stemming from the immediate work stoppages of recent months. It is not designed to cover the long-term decrease in giving that could be occasioned by a lengthy faltering of the American economy. And while the stock market tends not to impact parish offertory, unemployment rates are generally thought to have significant effect on the collection plate. This means that alongside a long road to job recovery for the country, most parish jobs will be slow to come back, and some are unlikely to come back at all.
While payroll is an ongoing cash obligation for most parishes, building maintenance is an ever-looming parish liability that, many pastors know, can quickly become expensive.
Parishes tend to spend what they have on their immediate ministry needs. Except in dioceses where building maintenance is regularly audited, or when pastors are especially zealous, routine maintenance on old buildings is often delayed or neglected. Few parishes account for depreciation. When something breaks, the cost is high. And with dramatically decreased collections this year, what little maintenance might have been done is likely to be deferred.
When boilers break or roofs starts leaking, parishes will turn to their dioceses for help.
Indeed, many U.S. dioceses have already begun looking for ways to provide emergency cash grants to parishes with immediate need.
That need includes maintenance emergencies, but in some places, it also includes payroll assistance, and loan repayments for outside construction loans. Those cash grants are a hit to diocesan cash reserves, which, in many places, are themselves already insufficient.
Meanwhile, dioceses are, like parishes, anticipating significant revenue reductions in the current quarter and in the next fiscal year.
Dioceses are funded through parish taxes or assessments, which are sometimes linked to annual appeals, in addition to the earnings from investment portfolios, real estate holdings, and endowments or foundations. Some cash is unrestricted, but some may be spent only on certain things. Some dioceses also charge parishes fees for some shared services, though in other places no such fees are assessed.
Also like parishes, dioceses have begun announcing layoffs and furloughs. But those measures may not be enough. Several dioceses have announced the end of their diocesan newspapers, reduction in priest salaries, or begun passing on a greater share of healthcare costs to employees.
If, as projected, the economic downturn is long-lasting, there will be other measures. Dioceses are likely to halt all renovation projects or new constructions, sell off properties, shutter ministry centers, and neglect long-term obligations, including self-funded priest pension plans, many of which are already underfunded. Some of those measures simply pass the costs of the present into the future; they will need eventually to be paid.
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Many dioceses run small savings-and-loan operations, in which parishes can deposit their savings and earn interest, and cash can be loaned to other parishes for construction or renovation. If parishes pull their cash reserves, dioceses will halt loans. If they halt loans, they’ll have difficulty paying interest on deposits, and parishes will be less likely to put new money on deposit.
The mutual aid of non-profit savings-and-loan will likely dry up, and future parish projects will require bank loans, at far higher interest rates, and under much harsher terms. There will be simply fewer of those projects permitted.
Large Church projects coordinated at the diocesan level are mostly funded through the gifts of major donors. Those donors have lost considerable portions of their wealth amid market volatility. The loss of their benificence will impact school scholarship funds, seminary formation, and ministry to the poor, along with campaigns to meet the underfunded pension or construction liabilities of previous decades.
Not all dioceses will be impacted equally, but several have already begun announcing the layoffs and closures that signal their financial positions.
As dioceses find themselves increasingly strapped, many bishops will become, almost certainly, less eager to send money to the bishops’ conference in Washington, DC.
In January, the U.S. bishops approved an increase on the amount of money they must send to the USCCB - but barely. The measure, similar to one passed in 2017, barely got the two-thirds majority it required, something conference officials attributed to the financial challenges and giving downturn of the 2018 sexual abuse scandal.