The Catholic Partnership Summit Part 4: Ethical Financial Management and Stewardship
Over the past few weeks, I have been offering notes from a conference I recently attended in Washington D.C. The conference was hosted by the Catholic Leadership Roundtable. The theme was, “From Crisis to Co-Responsibility: Creating a New Culture of Leadership.” Topic involved discussing issues such as, “Imagine a Catholic Church of the future that we want to create together. How do we do that?” “What does a thriving, co-responsible Church look like?” “What is the leadership culture that we want to create to support that vision?”
Previously I provided background about the Leadership Roundtable and my original involvement with it. We examined the topic of a new leadership culture within the Catholic Church, Last week I wrote about governance of the Church. This week we look at developing a culture of ethical financial leadership and stewardship.
I was part of an interesting, initial conversation that the Roundtable had about the abuse crisis in Boston. One of the points of failure was financial transparency. Millions of dollars were being paid to law firms and to victims. No one picked it up. One reason was a lack of transparency on the part of the Archdiocese of Boston. Another was that the financial statements were not available, or were not available in a format that people could see, easily understand and inquire about.
Incidentally, one of the first tasks that the Roundtable accepted was to go to Boston and revamp the financial reporting systems of the archdiocese. The goal was to institute financial “best practices.” The hope was this would provide better oversight and transparency.
What if the laity, clergy and the bishops accepted the mission of co-responsible stewardship resources and financial leadership? What would that look like? Some suggestions proposed were:
Ethical Financial Leadership:
- Implement sound financial and operational systems and ensure accurate records are kept.
- Conduct periodic reviews to address accuracy and transparency of financial reporting, as well as safeguards to protect the integrity of the reporting systems.
- Ensure parishes have written financial policies that are adequate for their size and
- Create financial stewardship policies that are consistent with the Church’s mission, are compatible with capacity, and respect the interests and intentions of donors.
- Ensure policies are in place to govern the acceptance and disposition of charitable gifts that are received in the course of regular fundraising activities.
- Become familiar with resources for parishes and dioceses such as the Diocesan Financial Management’s “A Guide to Best Practices”, the Association of Fundraising Professionals’ “Code of Ethical Standards”, and Leadership Roundtable’s “Catholic Standards for Excellence”
Transparent Financial Leadership
- Conduct annual diocesan audits by an independent Certified Public Accountant.
- Make available annually information about the Church’s mission and parish’s vision, ministry program activities, sacramental data, Mass attendance, and financial data.
- Issue 990 forms, even when not required, in order to promote transparency.
Convening and Selecting Parish and Diocesan Finance Council Members
- Convene a finance council in every parish and diocese as required by canon law and meet at least four times a year.
- Identify a process for the finance council to select new members and ensure they reflect the diversity of the people in the community that the diocese/parish serves.
- Select individuals for the finance council who possess the specific skills for the role..
- Implement term limits and engage in coordinated succession planning and leadership development.
Orienting and Conducting Business in Parish and Diocesan Finance Councils
- Provide an orientation and ongoing education for finance council members.
- Establish management policies and procedures for the finance council, assure that
adequate human and financial resources are available, and actively monitor the parish’s allocation of resources.
- Periodically review parish compensation structures in conformity with diocesan policies and Catholic Social Teaching regarding workers’ rights to a just wage.
- Create a conflict of interest policy and statement for the finance council.
Faithful Stewardship and Philanthropy
- Require Catholic organizations seeking funding to adhere to standards for excellence in management and leadership.
- Develop an endowment plan as part of sustainable diocesan stewardship.
Appoint a stewardship council and communicate with parishioners on stewardship.
References and Best Practices:
U.S. Conference of Catholic Bishops “Stewardship: A Disciple’s Response, A Pastoral Letter on Stewardship” & LPi’s summary “Stewardship: A Disciples’s Response in a Nutshell” A pastoral letter from the U.S. bishops on stewardship that also includes a summary, resource manual, and stewardship resources.
USCCB Ad Hoc Committee on Diocesan Audits, Report to the Body of Bishops, November 2007. This document reports on how the use of either internal or external reviews and audits of parishes would enhance the transparency and accountability of Church finances and the good stewardship of pastors and administrators.
USCCB Committee on Budget and Finance, “Diocesan Internal Controls: A Framework” This document speaks of management fraud and deceptive financial practices and offers specific guidelines on how dioceses can minimize risk.
USCCB’s Socially Responsible Investment Guidelines. This document provides dioceses and other Catholic institutions with guidance on exercising, faithful, competent and socially responsible stewardship in how they manage and invest their financial resources.
Dicastery for Promoting Integral Human Development’s “Vocation of the Business Leader.” The document speaks of the “vocation” of business women and men and of the challenges and opportunities that the business world offers them.
Association of Fundraising Professionals’ “Code of Ethical Standards.” The code that must be followed by fundraising professionals, including those who serve in the Church.
Charles E. Zech’s “Best Practices in Parish Stewardship.” Based on a survey of stewardship parishes across the country, this book provides a comprehensive analysis of both financial and non-financial stewardship activities and offers insights for one’s own parish.
Diocesan Fiscal Management Conference’s “Diocesan Financial Management: A Guide to Best Practices.” A comprehensive manual for dioceses and religious institutions to ensure they are operating by best practices.
Leadership Roundtable’s “Catholic Standards for Excellence”, Best Church Management Practices for Dioceses. A comprehensive listing of best practices for dioceses in areas such as management, advisory councils, finances, human resources, fundraising, and communications.
Leadership Roundtable’s “Catholic Standards for Excellence”, Best Church Management Practices for Parishes. A comprehensive listing of best practices for parishes in areas such as management, advisory councils, finances, human resources, fundraising, and communications.
Michael J. Castrilli and Charles E. Zech’s ’ “Parish Finances: Best Practices in Church Management.” A guide for parishes to ensure they are operating with effective, accountable, and transparent financial processes.
Wilmington Trust’s Catholic Foundation Trends. A high-level overview of trends among Catholic foundations.