Understanding Parish Finances

Parish and Diocesan Finance 101

For an understanding of what the diocese has spent related sexual abuse in the church, in legal fees, to support victims, etc., click here

Parish Finance Council
A small group of people mandated by canon law for every parish, to advise the Pastor/Administrator in the area of finance, facilities, human resources, and business. The people are discerned and invited by the pastor/administrator for their gifts and experience in the areas of business and administration.

Operating Budget
A yearly general operating financial statement prepared by a parish and Parish Finance Council base off previous year income and expense and a forecast for what is coming in and needed in the parish for the next year. It is an educated prediction that list expected income and expense for the fiscal year. Diocesan fiscal year for all parishes is 1 July through 30th June each year.

INCOME
Unrestricted vs Restricted Donations/Income
Restricted Donations are donation given for a specific purpose and must be use for that purpose - this is based on the intention of the giver.  e.g. a person may decide they want to give $10,000 for hymnals or kneelers, or give to the annual St. Anthony School Collection. Some restricted donations are still assessable by the diocese for Parish Share Program and School Subsidy (see below)

Assessable vs Un-assessable Donations/Income
The diocese designates what parish income sources and collections are assessable and un-assessable for the Parish Share Program and School Subsidy

What are Assessments from the Diocese?

1. Parish Share Program (PSP) - Please note, this program, its title, and it percentage of assessment is changing in 2022-23 in our diocese. More information about this is forthcoming.  Currently this is an assessment of parish income use for operating income for the diocese. %17.6 – of parish assessable income – that is $.17 + cents of every assessable dollar donated goes to the diocese. This yearly program starts the beginning of Lent. Yearly assessment amount is based on total assessable income from the previous fiscal year. If a parish meets its assessed goal within a particular year, then %100 of everything collected above the assessed amount stays in the parish for purposes needed and decided by the administrator and Parish Finance Council
2. School Subsidy (SS) - This is an assessment of parish income for parishes without catholic schools, use by the diocese to support Catholic Schools with the diocese. %10 of assessible income - that is $.10 cents of assessable every dollar. Diocesan Schools office and Financial Office determin how this money is dispersed to schools across the diocese.

What donations are restricted or unrestricted, assessable or un-assessable?

• Offertory – unrestricted, assessable.  Funds obtained thru Sunday envelopes, loose cash or check donations, and electronic giving
• Special Collections – restricted, often designated as un-assessable.  Collections for specific purpose including disaster relief, special organizations or ministries
• Exempt Collections – restricted, un-assessable.  Those collection that are exempt from annual Parish Share Program and School Subsidy Assessment. Our parishes has permission for a Debt Relief Collection – that is exempt from diocesan assessment, these also include special collections in every fiscal year like the St. Anthony School Collection
• Past Church Alive Campaign/Keep the Light Shining Campaign – restricted, split between the diocese and parish.  A diocesan wide fundraising Campaign to support both diocesan and parish special project that are summarized in what is called a “case statement.” The diocese itself and each parish had to create a case statement for what the money raise would be used for. All Funds raise are restricted for these specific purposes as spelled out in the case statement. Each parish was given a target goal from the diocese that was predicted to be attainable. For most parishes the split of money raised was %60/40 – that is, %60 for the Diocese case statement and %40 to the parish case statement. The former parish of St Mary of the Mount did a “combined campaign” named the “Keep the Light Shining Campaign” so instead of the %60/40 split, we were to meet the target goal of the diocese, then everything we collected above that amount (%100) was for the Parish case statement.
• Electronic Giving – “Faith Direct” – both unrestricted and restricted, assessable and un-assessable based on collection designated.  This is simply an electronic alterative to giving to offertory, special collections, and campaigns etc.
• Other Donations & Bequests – can be restricted or unrestricted base on the donor’s intention, these are mostly assessible unless the donor gives to a specific exempt collection.  This also includes funds obtained from other sources such as estates and donations designated for a particular/special purpose
• General Fundraising – unrestricted, assessable.  Funds obtained from such fundraising activities as Lottery Calendar Raffles, Night at the Races, Fashion Show, Fish Fry, Perogie sales etc.
• Sale of Buildings and Property – unrestricted, un-assessable.  Any sale or purchase of property or buildings has to be approved by the Diocese. The profits of the sale of a parish property %100 stay in the parish, and this is non-assessible by the diocese for PSP or SS. In order to build or purchase property, the parish must have at lease %62 of the funds collected. 

Summary
%27.6 of most money donated to any parish from most sources (offertory, fundraising, donation and bequest) goes to the diocese for Parish Share Program and School Subsidy, unless it is a restricted donation to a non-assessible collection

EXPENSES
Operating Expenses
All expenses associated with the general operations of the parish organization. It includes, administration, salaries, utilities, property taxes, materials for office, education, and liturgy and much more.

Capital Expenses
Large expenses associated with upkeep and improvements of buildings and grounds. These usually are not part of the Operating Budget but are paid for out of a parish capital savings, if a parish has this. Often a parish will have a separate Capital Budget for anticipated major expense. If a parish is on sound financial footing, there is money designated every year from the operating budget placed in capital savings for these projects. Permission is Required from the Diocese for Major parish projects, expenses and repairs over $40,000.

PARISH CASH AND SAVINGS ACCOUNTS
Diocesan Deposit and Loans (D & L)
This is where all savings are held and from where all parish loans are taken. It is like a diocesan credit union. Parish Savings, capital savings, endowments, etc. are all held by the D & L. A parish is not permitted to acquire a loan from, hold a savings account, or invest its own money with any other institution other than the D & L.

Savings Accounts – held at the Diocesan Deposit and Loan (D & L)

• D & L Savings – unrestricted - for general expenses, projects and ministries
• D & L Capital Savings – restricted for facilities and grounds major needs and
• improvements
• D & L Church Alive Savings – Restricted saving for the purposed spelled out in the parish case statement
• D & L Endowment Savings – Restricted savings for the purpose the endowment was created

Checking Accounts
Checking accounts can be held at a bank of the parishes choosing. Mary, Queen of Peace Parish uses PNC Bank. Most parish hold only a few Checking accounts. Typically these are: Operating, Fundraising, Social Service, and Mass Stipend checking accounts.

Where Do Parish Debts and Loans Come from?
All Parish Debts and Loans are to the Diocesan D & L. Debts can occur for many reasons: sometimes it is a loan taken out for a major project or necessary repair, often large parish debts have come from parishes that have Catholic School that they did not close when expenses keep rising and students and tuition income keep going down, and sometimes parishes are in debt because of deficit spending related to ordinary parish expenses of maintaining buildings as well as paying staffing salaries, benefits, and insurances.