Following are questions and answers provided by the Diocese of Madison on the diocesan cutbacks and the closing of the Catholic Multicultural Center.
Q: This seemed to come "out of the blue." How did we get here?
A: The history: The Diocese of Madison has existed since 1946. Funding for the diocesan offices and agencies has been paid for by a tax on the parishes better known as the Diocesan Services Appeal or DSA. The DSA was allocated to each parish on a percentage basis based on the parish offertory income, less certain deductions much like how income tax is based not on total income but on "taxable income." For example, if the parish supported a Catholic school, 96 percent of the money the parish used to fund the school was subtracted from their obligation to the diocese.
On average, the diocese collected between eight to 10 percent of offertory income for diocesan use. These funds paid for the "Chancery Offices" as well as ministries run by the diocese itself, rather than a specific parish (for example Catholic Charities and Camp Gray). In 2007 entire parish offertory for all parishes in the 11 counties was $37,655,000. So, after allowances, the diocesan tax or DSA was $3.2 million or about 8.5 percent.
The rest of the diocesan budget came from investment income. Various funds in the diocese are invested in the marketplace by professional managers. The portfolios are focused on relatively safe investments, but with the goal of producing both growth and dividend income. This investment income has historically made up roughly one-half of the diocesan budget.
Since the 1970s the vast majority of dioceses in the United States have begun to institute an annual appeal to support their diocesan ministries. This year, the Diocese of Madison has followed that trend, appealing directly to the faithful of the diocese to support all of the ministries of the diocese.
Under this format, the tax charged to the parishes, which has been greatly decreased, goes to support the mandatory offices of the diocesan corporation. For example, the offices of the Bishop, Vicar General, Finance Director, and Chancellor are paid by the tax. However, those offices that provide education and ministry are paid for by the appeal; an example of these would be the offices of Worship, Evangelization and Catechesis, Justice and Pastoral Ministry. Also, specific ministries such as Catholic Charities, Camp Gray, and the Catholic Multicultural Center are paid by the appeal.
In the years to come, we hope the response to the Annual Catholic Appeal (ACA) will endow the various ministries of the diocese, so that we can be assured of providing the needed services, regardless of the economy.
Our present situation: Sadly, that endowment is not present today. Relying as we have on our investment income, when the market dropped, our income dropped as well. Much like any other family we had to make hard choices which were not pleasant for any of us involved, despite their absolute necessity.
Across the board, all offices in the diocese were cut -- both those which are mandatory and those which serve to minister in various capacities. Jobs were cut, salaries were reduced, and benefits were cut back. Efforts were made to help the diocesan ministries continue, even at a reduced rate, while ensuring that the very heart of our diocesan assets were preserved for service into the future.
Q: Were the cutbacks and closing necessary?
A: Yes, as we looked at all that we had, and our limited resources, we were cognizant, not only of the good that the diocese must do today, but also that good that we are called to do well into the future. Taking this into account, the diocese could not continue to erode the corpus of our investment income.
To be more specific, when people give to the Church, they have the option of funding general programs or selecting a specific program. They also have the option of choosing whether their donation goes to endow a ministry or if the money can be spent for immediate needs.
Because of the recent economic downturn we have spent all of the funds available for immediate distribution and were faced with eroding the funds provided for endowment purposes. In discussions with our Diocesan Finance Council and various consultative bodies, including our priests, we came to the decision that we needed to cut back on both diocesan staff and ministries for the foreseeable future. Deciding which staff positions and ministries were to be cut was extremely difficult. The bishop, after significant input from various consulters, made the final decision.
Q: But why was the Catholic Multicultural Center (CMC) closed?
A: As with all of the decisions to cut staff, the decision to cut the positions which ran the CMC were extremely difficult. The decision was only made after considering the good that was done by the CMC and whether any associated or like agencies might join in the efforts. Consideration was given to the good work done by various Catholic parishes, and other churches, as well as agencies such as St. Vincent de Paul, United Way, Madison Area Literacy Network, and our own Catholic Charities.
It was clear that with all of the good done by these various bodies, the needs addressed by the CMC would not go unaddressed. So, as laid out above, the decision was made that these unfortunate cuts were necessary to insure that the Diocese of Madison could continue to serve people into the future.
Q: What was the cost to the diocese of the Catholic Multicultural Center?
A: The most recent budget was $511,000. This money was used to pay the employees of the center, for building upkeep, and for the cost of the various programs. Without the volunteers and donations of the parishes and various groups, the center would have never been able to function. Hopefully these volunteers and donors will continue to support and fund the various ministries provided by the center.
Q: Was this decision made in a vacuum, looking only at the financial side?
A: No. The financial situation we are in has certainly placed the diocese in a very difficult situation and facing very difficult decisions. However, countless options were taking into account the present and future needs of people, and the essential mission of the entire 11 county diocese, as well as the availability of parallel, although more dispersed, ministries of the CMC.
Q: How long did the diocese know the CMC was in financial trouble?
A: In 2008 the Catholic Multicultural Center received the report of a locally conducted feasibility study. That study reported many findings and made many recommendations. Among the findings were that the CMC was underutilized and not as vibrant as it could be, as well as that it should be a more self-sustaining facility. Recommended changes were to make the CMC a venue for meetings, trainings, education, and programs, but that the CMC not run these programs itself.
Likewise, it was recommended that the CMC no longer house a food pantry and have outside agencies run any other food programs. It was recommended that it rent out space, for reasonable rates and on a sliding scale, the rooms of the CMC, as a means of income; that it run an annual community and congregational appeal.
Even given these findings and recommendation of that feasibility study, the diocese changed little and continued to fund the CMC and allow it to run as it had in the past. The diocese had every intention to continue to fund the services available through the CMC. This decision was based on the hope that the Annual Catholic Appeal, begun this year, would be a great success and that the funds would be available to continue running the CMC. As is currently stands, this is not the case and the diocese can no longer afford to fund the CMC.
Q: Why wasn't there more publicity surrounding the needs of the CMC and other potential cuts, so that people might do something about it?
A: For the past few months, the diocese has been engaged in a very aggressive attempt to both start an annual appeal to maintain all its ministries and outreach efforts and to balance its budget, for the long-term sustainability of the Church's work in the diocese. Recommendations were made by the Diocesan Finance Council as to cuts and the closing of the CMC, with the firm deadline of the end of the fiscal year (June 30).
The relative success of the Annual Catholic Appeal was a variable not yet known. Diocesan leaders couldn't make announcements that the CMC will be closed or that it would need to make layoffs and later find out that the ACA was a tremendous and overwhelming success.
The ACA has been successful in that it needed to be started for the long-term good of all the diocese serves and the overall donations to the diocese and its ministries will have increased. However, the optimistic targets set at the beginning of the appeal, which would have balanced the budget and rendered these suggestions moot, will not be met. The diocese needed to wait until it had realistic returns about the relative success of the ACA before any decisions could be made. These returns were given to the diocese the week of May 25th.
For more questions and answers, visit the diocesan Web site at http://www.madisondiocese.org