Principles for Administration of Parish and School Finances #
- The Pastor is responsible for financial decisions and will establish abalanced annual operating budget in consultation with the Parish Finance Council. The Pastor should also develop in consultation with the Parish Finance Council an annual capital expenditure budget including sources of funds. The Actual income and expenditures of the parish should be compared to the budgets monthly and reviewed by the Parish Finance Council at least quarterly.
- Each parish shall issue an informative financial report to its parishioners at least annually.
- All parishes will follow a uniform chart of accounts to facilitate reporting to the parishioners, the Parish Finance Council and the Archdiocese.
- All parishes will follow established internal accounting controls.
- All Parish Finance Councils will follow established Archdiocesan Guidelines and participate in Archdiocesan training sessions for priests, administrators and Parish Finance Council members.
- All parishes will participate in a coordinated payroll system in order to ensure that all employees receive proper benefits and in order to guarantee full compliance with ever more complex laws on taxes and employee benefits. No employee will be paid outside of the coordinated payroll system.
- All parish financial activities will be the subject of regular independent audits or reviews.
- All parish accounts in financial institutions will be included on the annual parish financial report and subject to the audit-review process. The Archdiocese will obtain comprehensive lists of all parish accounts from financial institutions and will compare the listing of the accounts with the listings contained on the annual parish reports.
Parish Finance Council Guidelines #
- The Revised Code of Canon Law mandates a Parish Finance Council in each parish. The role of the Parish Finance Council is to assist and advise the Pastor in overseeing and controlling the financial affairs of the parish. The Parish Finance Council is accountable to the Pastor, who has the responsibility for final decisions. It is understood that if the advice of the Parish Finance Council is unanimous on a given matter, the Pastor will give serious consideration to the recommendation and not lightly reject it.
- Structure of the Parish Finance Council
Members shall be appointed by the Pastor and must be active Catholic members of the parish. Members should be skilled in business and have some expertise in management, financial, accounting, legal, fund raising or related fields. The membership of the Council cannot include anyone who could have a conflict of interest from such affiliation, nor can any parish staff member or any relative of the Pastor be a member. There shall be at least three members.
Members shall serve for three years. The terms of the Parish Finance Council will be staggered to ensure continuity. Upon initial formation of the Parish Finance Council, the Pastor shall designate either a one, two or three year term, in succession, for each member that the Pastor appointed. Thereafter, members who are appointed or re-appointed shall serve for three years. In the event a member resigns or is removed by the Pastor for a just cause, the replacement shall assume the remainder of the term of the replaced member. The Pastor shall appoint the Chairperson. Other officers may be appointed at the discretion of the Pastor.
When a pastorate becomes vacant, the Parish Finance Council ceases to exist.
- Functions of the Parish Finance Council
The Pastor is responsible for financial decisions and will establish balanced operating budgets for the parish and school in consultation with the Parish Finance Council. The Pastor should also develop in consultation with the Parish Finance Council an annual capital expenditures budget including sources of funds. The actual income and expenditures of the parish should be compared monthly and reviewed by the Parish Finance Council at least quarterly.
The members of the Parish Finance Council must be given complete access to all records and documents relating to the financial status and operations of the parish. The Pastor must consult the Parish Financial Council concerning any major commitment of parish funds in excess of $10,000, or a series of small amounts for a single purpose that will exceed $10,000. In conjunction with these functions the Parish Finance Council shall do the following:
- Establish a timeline for budget development and implementation by the parish staff.
- Review proposed operating and capital budgets.
- Review significant budget variances and develop a plan of action, if necessary, to correct the problem(s) or amend the budget.
- Review proposed expenditures which are not included in the approved budget.
- Review and recommend approval or disapproval of proposed budgets from individual parish organizations having substantial sources of income (i.e. Men’s Club, Women’s Club, Bingo, Scrip, Boosters, etc.). Financial statements for these organizations and activities shall be submitted to the Parish Finance Council at least annually.
- Provide parishioners with an approved budget and periodic financial statements, at least annually.
- Review the annual financial statements published to parishioners and submitted to the Chancery Office for accuracy and completeness. The reports must agree with the books of record and must be accurate. If necessary, supplemental information can be included as a footnote to the reports.
- Ascertain that the parish follows the Archdiocesan uniform chart of accounts to facilitate reporting to parishioners, the Parish Finance Council, and the Archdiocese.
- Ascertain that the parish follows established internal accounting controls as specified by the Archdiocese.
- Follow established Archdiocesan guidelines and participate in Archdiocesan training sessions for priests, administrators and Parish Finance Council Members.
- Ascertain that all employees are included in the Archdiocesan coordinated payroll system in order to ensure that all employees receive proper benefits and in order to guarantee full compliance with ever more complex laws on taxes and employee benefits. The Parish Finance Council should ascertain that no employee is paid outside of the coordinated payroll system.
- Ascertain that Independent Contractors comply with Internal Revenue Service regulations.
- Ascertain that all parish cash with financial institutions is included on the annual parish financial report.
- Study sources of parish revenue, make recommendations for maintaining and enhancing parish revenue, assist in the development of programs and processes to that end, and coordinate fund raising programs.
- Oversee and review fund raising programs and expenditures for the parish, school and affiliated groups/organizations.
- In conjunction with the Parish Council, educate parishioners with regard to stewardship.
- Review all banking and financial institution arrangements, bookkeeping procedures, capital expenditures and contracts of a fiscal nature subject to Archdiocesan regulations. Make recommendations for improvements or changes subject to Archdiocesan Regulations or Policies.
- Advise the Pastor in financial and budgeting aspects of managing and caring for the parish buildings and equipment. Assist the Pastor in evaluating deferred maintenance and the development of a long range capital improvement budget.
- Meetings of the Parish Finance Council
The Parish Finance Council shall meet at least on a quarterly basis, preferably monthly. Special meetings of the Parish Finance Council may be called by the Pastor. There shall be a written record of the actions taken at the Parish Finance Council meetings.
Internal Accounting Controls for Parishes and Schools #
Bank Accounts #
- All bank accounts must bear the parish/school name. No bank accounts shall be in the name of the Pastor or an individual(s).
- All parish/school funds must be deposited only in accounts that bear the Parish name.
- Bank accounts in the name of the parish/school may be opened or established only by decision of the Pastor and approved in writing by the Archbishop or his designated Attorney-in-fact. The Pastor must be a signatory on all parish/school accounts.
- The number of bank accounts should be kept at a minimum. A list of all bank accounts must be given to the Parish Financial Council.
- At his request, the Pastor or his delegate may receive unopened bank statements. This person should then scan the statements and the enclosed canceled checks for unusual items prior to forwarding the statement for reconciliation.
- The reconciliation should be performed each month by someone who does not have access to cash. In those instances where it is impossible to comply with this requirement, an independent review of the reconciliation shall be made by another member of that organization. Reconciliations may be reviewed periodically by the Parish Finance Council.
- All unused checks should be safeguarded in a safe or locked cabinet.
- Parish surplus funds, defined as amounts in excess of two months non-school operating cash expenditures of the parish for the previous fiscal year, must be deposited in the Capital Assets Support Corporation Parish Deposit and Loan Fund in accordance with Policy on Investment of Parish Surplus Funds.
- Elementary school surplus funds, defined as amounts in excess of two months school operating expenses for the previous fiscal year, must be deposited in the Capital Assets Support Corporation Parish Deposit and Loan Fund in accordance with Policy on Investment of Parish Surplus Funds
Cash Disbursements #
- All expenditures shall be consistent with and within the budget limits approved by the Pastor and the Parish Finance Council. If possible, proposed significant expenditures beyond budget limits and non- budgeted items should be approved in advance by the Parish Finance Council and the Pastor, otherwise, especially in emergency situations, they should be advised as soon as possible of such expenditures.
- Pre-numbered checks should be used and numerical control maintained. Voided checks should be accounted in the monthly reconciliation.
- All check disbursements in excess of $500 require two signatures. Bank signature cards signifying the approved signers must be on file in the parish office.
- It is never permissible to pre-sign blank checks.
- Checks shall be prepared from approved invoices or check requests. Check requests should be supported by receipts or other appropriate documents indicating for what the expenditure was made. Some notation in writing should be made on the invoice or check request indicating that goods were received or services performed. Invoices should be reviewed for terms, prices, extensions and compared with the check request by the bookkeeper and/or administrative assistant.
- Check signers should review the supporting data and approvals on the check requests/invoices prior to signing the checks.
Cash Receipts #
- Mail should be opened by someone other that the person responsible for recording cash receipts. Checks received must be listed and endorsed “for deposit only” before being turned over to the person responsible for deposit.
- The person responsible for making the deposit (i.e. the person who prepares the deposit slip) should be someone other than the person responsible for recording cash receipts.
- All receipts should be maintained in a locked file cabinet or safe until deposited. Only the Pastor or his delegated agents should have the combination to this safe or the key to the locked file.
- Cash receipts must be recorded and deposited intact as soon as possible. Copies of deposit slips must be maintained.
- No checks made payable to the parish, its school or any of its organizations may be endorsed and converted into cash, nor deposited in accounts other than parish accounts.
- It is expected that the foregoing procedures will also be applied to tuition collected by parish schools and any monies collected by parish organizations.
Petty Cash Funds #
- Petty cash funds should be maintained on an imprest basis and periodically replenished for exactly the amount of expenditures from the fund. Imprest basis means that at all times the sum of the cash on hand and the disbursement forms/invoices equals the total amount that is supposed to be in the fund. The size of the fund should be determined by its activity, but can not exceed $500 except for bingo.
- The fund should be in the sole custody of a single employee. The custodian should balance the fund at least monthly, and periodically, the Pastor or his delegate should count the fund on a surprise basis.
- Disbursements from the fund should be supported by petty cash disbursement forms which should be either typewritten or prepared in ink. All supporting data should be attached to the voucher. Upon reimbursement of the fund, every disbursement form (and supporting data) covered by the reimbursing check should be reviewed for reasonableness and canceled in such a manner as to preclude reuse.
- The petty cash fund should be recorded as a cash account. Cash should be relieved and expense recorded when the petty cash disbursements forms are submitted and the fund is reimbursed.
- Each parish organization and cost center (e.g. school, rectory, hall) must prepare an annual revenue and expense budget for usage in guiding the parish through the coming fiscal year’s financial transactions. All necessary maintenance items should be included.
- A one-year and five-year capital budget should be prepared for all expected and planned capital improvements, including existing and planned sources of funds to be used to pay for such improvements.
- All budgets must be completed and submitted for review and approval to the Parish Finance Council in time for a spring meeting, except the school budget which must be submitted to the Council after it has been approved by the School Board or (similar body) and prior to being submitted to the Archdiocesan School Department.
- All budgets should be balanced or result in a surplus. In those instances where it is not possible to balance the budget, the sources of funds (e.g. savings, loans) to be used to balance the budget should be identified and approved by the Pastor after consultation with the Parish Finance Council. Any subsidies requested by the school, parish organizations etc. must be approved by the Pastor after consultation and review by the Parish Finance Council.
- Final approval of all budgets is the responsibility of the Pastor after consultation with the Parish Finance Council.
Financial Reports #
- Financial reports should be submitted on at least a quarterly basis (preferably monthly) to the Pastor and the Parish Finance Council in order to keep them fully informed on the current and future financial condition of parish activities.
- The financial reports should be prepared on a cumulative year-to-date basis and compare actual revenue and expense items to budgeted amounts. Significant variations from budget and any unbudgeted items incurred should be explained. The reports should also include the beginning and ending cash balances.
- A copy of the parish annual report must be submitted to the Chancery Office by August 31 for each year. A copy shall be given to the Parish Finance Council.
- A copy of the parish school’s annual financial report must be submitted to the Archdiocesan Department of Education in August of each year. The report must be submitted to the Pastor and to the Parish Finance Council for approval before submission to the Archdiocesan Department of Education.
- All parish organizations shall prepare an annual financial report and submit it to the Pastor and the Parish Finance Council by August 31 of each year.
- Financial statements and supporting records of all parish entities are subject to review and examination by the Parish Finance Council at their discretion.
- All parish and school employees without exception, will be paid through the Archdiocesan coordinated payroll system.
- All appropriate federal forms, including W-4’s and I-9’s, must be filed in each employee’s personnel folder.
Offertory Collection Handling #
- A parish representative other than a member of the Collection Committee will place an ample supply of the tamper-proof pre- numbered recyclable plastic bags in the church prior to the day’s service. He will insure that the bag numbers are in numerical sequence and no numbers are missing.
- The parish ushers at each service will place the offertory collections in bags.
- The Collection Count Committee will keep a log of the numerical sequence of the bags. All missing bag numbers and out of sequence situations will be researched by the Collection Count Committee at time of counting the collections.
Collection Counting #
- Collections should be counted and checks endorsed for deposit as soon as possible.
- A Collection Count Committee must be established in sufficient number to count collections as expeditiously as possible. In setting up the Count Committee, the selection of members should be considered
- Cash count procedures should be in writing and furnished to each member of the Collection Count Committee.
- Collections should be recounted by another member and they should agree on the total.
- The amount of offering should be indicated on the outside of the envelope for subsequent posting to parishioner statements. Loose checks should be listed for subsequent postings to parishioner statements.
- The count results should be written in ink onto a standard count form and the deposit slip forwarded directly to the Pastor and the bookkeeper.
- All Archdiocesan and national collections should be remitted to the Chancery Office as soon as possible, but no later than one month after the collection was taken.
- The Parish Finance Council should perform a periodic review to determine that proper control is being exercised over the collection count by:
- Tracing the copy of the deposit slip to the collection count record.
- Ascertaining that two members of the count committee have signed for the count.
- Tracing collection deposits to bank statements and ascertain that deposits were made in a timely manner.
- Determining that procedures for handling mail receipts are being followed.
- Determining that special collections have been remitted properly to the Chancery Office on a timely basis.
Fund Raising Activities #
- The reason for each new fund activity should be submitted for approval to the Pastor and the Parish Finance Council before the activity is started.
- Every parish entity should use adequate control procedures for all fund raising activities. For activities such as bingo and scrip, it is essential that controls over inventories be established.
- Fund raising activities should be included in the budget. If the profits of an activity are to benefit another parish entity (e.g. parish, school, etc.), the other entity should include this amount in its budget.
Stewardship and Development #
The Stewardship Program recommended by the Archdiocese offers three benefits to the parish:
- Increased Understanding of Christian Stewardship
- Increased Volunteers for Parish Ministries
- Increased Weekly Offertory Contributions
Stewardship education helps parishioners to recognize that everything we have — our time on this earth, our talents and abilities, and our material resources are gifts from a loving God. These gifts are not ours to use as we please. As Christians,we are obligated in thanksgiving to God to develop our gifts, and to return a just portion to further the teachings of Christ through the teachings of the Church. The Stewardship concept reverses the reason for support of the Church. In Stewardship, the contribution of time or money becomes a subjective personal commitment, rather than giving time, talent or treasure solely for the objective “needs” of the Church. The challenge of the parish is to forge a meaningful connection between the biblical and theological basis of Stewardship and the practice of Christian Stewardship in the daily lives of people. With a well trained, permanent Stewardship Committee, the Pastor can help parishioners understand the bond between the theology and the practice of Stewardship. This mission is what God calls us to do.
Development Policy #
As disciples of Christ, Catholics recognize God as the origin of life, and source of all we possess. Our resources exist not only to fulfill our own needs, but also to serve others. Therefore, we are obligated asstewards to receive God’s gifts gratefully, cultivate them responsibly, andshare them in justice with others.
Catholics are also collaborators and cooperators in the redemptive work of Jesus Christ. This is the fundamental mission of the Church: to proclaim and teach, to serve and sanctify. Catholics demonstrate their unity and collaboration in the works of the Church through the stewardship of their time, their talents and their financial resources. The fund-raising ministry of all Catholic Schools, Agencies and Parishes is an apostolic activity and based upon scripture and gospel values.
The Development Policy recognizes the expertise and accomplishments of the Catholic schools, Archdiocesan offices, agencies, and parishes in their fund- raising ministry. The Policy exists to serve the interests of these entities, and the individual leaders and donors who participate in various appeals.
The Policy considers the views of the development executives of the Catholic schools and agencies, and the Archbishop’s Stewardship Council of Priests, who represent the parishes of the Archdiocese.
The goal of the Policy is to achieve unity and cooperation, and to foster gospel values and Christian stewardship in the fund-raising activities of all Catholic entities under the jurisdiction of the Archbishop.
“Make every effort to preserve unity. There is one Lord, one faith, one baptism, one God who is over all and works through all.” Ephesians 4:4-6
“As each one has received a gift, use it to serve one another as good stewards of God’s varied grace.” 1 Peter 4:10
The Policy considers the Code of Ethics and recommended practices of the National Catholic Stewardship Council and National Catholic Development Conference, the National Society of Fund Raising Executives, and the American Association of Fund Raising Counsel.
Institutions Covered #
The Archbishop has appointed the Director of Stewardship to administerthe Policy among all parishes and missions, schools, (Archdiocesan elementary and high schools), Archdiocesan agencies, departments, offices and apostolates, the Catholic Youth Organization, Catholic Charities, and St. Patrick’sSeminary.
The policy shall not apply to: Catholic hospitals, Catholic colleges and universities, St. Vincent de Paul Society, and those Catholic schools not operated by the Archdiocese; except where their fund-raising activities are contrary to Catholic faith andmorals.
The policy requests these institutions to apprise the Archbishop of their fund- raising plans in conformance with Canon 1265 of the Code of Canon Law.
Religious mendicants, or private persons whether physical or juridic are forbidden to raise funds for any pious or ecclesiastical institution or purpose without the written permission of their own ordinary and that of the local ordinary.”
Responsibilities of the Stewardship Office #
In accordance with official Archdiocesan policy, the Stewardship Office is responsible for Stewardship education and development activities in the Archdiocese. Activities include the stewardship education, development policy, general fundraising advice, the Archbishop’s Annual Appeal, planned giving (wills, bequests and properties), and general counsel to parishes and Archdiocesan agencies (i.e. Catholic schools, Catholic Charities).
The Policy calls all Catholic schools, Archdiocesan offices, apostolates,agencies and parishes to cooperate and assist the Stewardship Office in carrying out the following responsibilities:
- To encourage all Catholic entities to use ethical, standard fund-raising practices that will bring credit to their ministry and will enhance the good image of all Catholic schools, agencies and parishes in the Archdiocese.
- To ensure preferential concern for the interests of all Catholics and those of other faiths who participate in appeals as volunteers and/or donors.
- To confer with all entities at least once a year and review needs, plans and activities. This review can take place by site visits, meetings at the Stewardship Office, conferences, telephone, group discussions or surveys.
- To review and provide recommendations regarding proposals of $100,000 or more to individuals, foundations, corporations and associations.
- To sponsor an annual seminar regarding development and stewardship activities such as: Planned Giving, Capital Campaigns, Annual Funds, Special Events, Direct Mail, Major Gifts, Foundation and Corporate Giving.
Archdiocesan Annual Appeal #
Every parish and mission is allocated a share of the total Archdiocesan Assessment. These assessments are set by the Archbishop’s Stewardship Council, based upon the individual circumstances of each parish. Pastors are advised of their parish’s assessment for the following calendar year in a letter from the Archbishop in late November.
In order to meet their assessments, parishes are asked to undertake an actual fund- raising campaign. Materials for the campaign (brochures, posters and envelopes) are provided to the parishes by the Stewardship Office. Parishes which utilize these materials and conduct campaigns according to the recommended guidelines have found in many cases that this proven method is very effective in raising not only the entire assessment, but additional funds as well. Many parishes use the AAA as their own fund-raising campaign to meet parish needs. All funds raised by parishes in excess of their assessments are returned to the parish for its special needs. For further information, please consult your parish copies of Stewardship Program: Guidelines and Materials for Increased Offertory Income and New Volunteers through Stewardship Education and Sacrificial Giving and AAA Guidelines for Parish Leaders
Development Activities in our Parishes and Schools #
- Large Donations: At the time a donation of $100,000 or more is received by a parish or an Archdiocesan school, the Archbishop is to be notified in writing, with a copy to the Moderator of the Curia and the Director of Development. Please include donations of lesser amounts if you think the Archbishop should be made aware of them.
Purpose: The Archbishop should be offered the opportunity to thank those who have been most supportive of the works of the Archdiocese.
Each year by June 30th and December 31st, please provide a comprehensivelist, for the previous six months, of major donations that have been received by your parish or school. Additionally, by September 30th please submit your annual parish/parish-school financial report for the previous June 30th year-end. The annual financial reporting form (Schedule 16) will now include a section in which donations of $100,000 or more are to be listed.
- Gifts from Foundations: Information related to donations received from foundations or that result from a written grant proposal are to be reported to the Director of Development and to the Moderator of the Curia.
Purpose: The staff of the Development Office will aggregate total donations by each foundation or grantor to provide an archdiocesan-wide view of such donations.
By September 30th please submit your annual parish/parish-school financial report for the previous June 30th year-end. The annual financial report for parish-schools is to include (in the Schedule 16) a list of donations received from foundations and grantors.
- Donor-advised funds, Restricted gifts, and Multiple-locations gifts: Donor- advised fund is a public charity that donates funds on behalf of one of its donors. Restricted Gifts may include restrictions on the use of vendors or service providers, time limits on the use of the funds, or other terms that restrict or bind. Multiple location gifts are gifts received that are for multiple locations such as both a parish and a school, two parishes, etc.
Before these types of gifts are received they must first be approved by the Development Office, General Counsel, and the Chief Financial Officer.
Purpose: some donations may include restrictions that would adversely impact our non-profit tax status. Further, gift requirement may be so strict as to result in fines, penalties, or in a tarnishing of the reputation of the Archdiocese.
Procedure for Approval of a Capital or Endowment Campaign #
The following procedure will facilitate the approval of a capital or endowment campaign:
The school or parish school, agency, department or parish seeking funds should prepare a statement and plan outlining the capital and endowment needs and costs. The statement and plan should have the approval of the appropriate person responsible for the school, parish school, agency, department or parish seeking funds (e.g. a Pastor would have the authority over both the parish and the parish school.)
The entity should present the case statement and plan to the appropriate Archdiocesan authorities (Office of Education, Building Committee, etc.) for approval in accordance with the procedures of the authority.
Upon approval by the Archdiocesan authority, the entity shouldpresent the statement and plan to the Stewardship Office. The Officewill provide a prompt report of approval or remedial steps necessary for approval.
The Stewardship Office will recommend that a pre-campaign survey of leadership and donor potential be undertaken, before approving the announcement of a campaign.
Upon completion of the preliminary survey, the entity should present the results to the Stewardship Office for review. The Office will provide a prompt report of approval or remedial steps necessary for approval.
Use of Professional Counsel #
The following policy will aid in selecting professional counsel:
All Catholic schools, agencies, offices, apostolates and parishes are free to select outside professional fund-raising counsel of their choice, in accordance with the principles and guidelines as established by the American Bishops.
All entities are encouraged to include their Board of Directors or appropriate councils or committees in the selection process.
All entities are encouraged to consider companies or consultants who subscribe to the Code of Ethical Guidelines of:
(Companies) The American Association of Fund Raising Counsel (AAFRC) or (Consultants) The National Society of Fund Raising Executives (NSFRE) and The National Catholic Stewardship Council and the National Catholic Development Conference.
All entities that prefer a company or a consultant who is not a member of the AAFRC or the NSFRE are asked to provide the Stewardship Office with the credentials and references of the candidate before a contract is signed by a Vicar General. The Stewardship Office will prepare a prompt recommendation relating to the qualifications of the company or the consultant.
The Stewardship Office can best administer this Development Policy with the cooperation of all entities under the jurisdiction of the Archdiocese. This cooperation will ensure that the best interests of all volunteers, leaders and donors will be served, and the good reputation of all entities and the Archdiocese will be protected.
Policies for the Acceptance of Gifts of Real Estate #
Gifts of real estate, including all forms of interests in real property, may be accepted on behalf of the Archdiocese and its parishes in accordance with these policies, with exceptions allowed as stated below.
- Authority to Accept Gifts of Real Estate. The following officers of the Archdiocese are authorized to accept gifts of real estate that are permitted by these policies: The Archbishop or his corporate legal delegate acting in consultation with the Stewardship Office, the Real Estate Office and the Finance Office.
- Conditions for Acceptance: A gift of real estate may be accepted only under the following conditions:
- It is to be used by the Archdiocese in connection with established or specifically approved programs or activities; or
- It is to be held for the production of income; or
- It is to be sold with the proceeds used for the general purposes of the Archdiocese, or as provided by the donor.
The Archdiocese will not accept property that would jeopardize its tax-exempt status
- Conditions Affecting Acceptance:
- If the property is to be used by the Archdiocese, it shall be in good physical condition. If it is not in compliance with applicable building, health, and safety codes, or requires repairs or improvements, a source of funds for the costs of bringing the property into compliance must be identified prior to acceptance.
- The proposed use must be lawful and consistent with the previously approved strategic plans of the Archdiocese involving the use or acquisition of real property.
- If the property is to be held for the production of income, a pro forma positive cash flow analysis must compare favorably to the amount of income that would be obtained if the property were sold and the proceeds invested as a part of the general endowment pool.
- If the property is to be sold, it should be marketable within a reasonably short period of time. Acceptance of offers to purchase property from the Archdiocese requires the signature of the Archbishop or his corporate legal delegate, after consultation with the Stewardship Office, the Real Estate Office and the Finance Office.
- If the property is to be used by the Archdiocese, it shall be in good physical condition. If it is not in compliance with applicable building, health, and safety codes, or requires repairs or improvements, a source of funds for the costs of bringing the property into compliance must be identified prior to acceptance.
In rare circumstances, the Archdiocese may consider financing the sale or carrying-back a portion of the purchase price for a credit-worthy purchaser at an interest rate that is comparable with other Archdiocesan investments and is subject to other appropriate terms and conditions. The terms shall be approved in writing and approved in advance by the Archbishop or his corporate legal delegate, after consultation with the Stewardship Office, the Real Estate Office and the Finance Office.
- Procedure: Prior to formal acceptance, the following shall be obtained by Archdiocesan staff:
- Preliminary title report covering the subject property (the title report shall reflect that title is vested in the donor in the form represented, and is subject to no claims, liabilities, or major defects of title);
- A suitable property valuation. The donor may be asked to pay the costs associated with obtaining any necessary final appraisal.
- A list of improvements to the property;
- A current list of leases, if any;
- A list of encumbrances, liens, and current expenses, if any;
- A commitment for title insurance; and
- A physical inspection of the property by an employee, agent of, or consultant to the Archdiocese.
Conditional acceptance may be made subject to satisfactory completion of each of the foregoing.
- Hazardous Waste Considerations. Prior to formal acceptance, a “Phase One” (as defined by the Real Estate Office of the Archdiocese) must be made by an individual or firm competent to advise the Archdiocese whether further investigation is needed.
- Grant Deed. Upon acceptance of the gift of real estate, it is the responsibility of the Real Estate Office to insure that the grant deed is properly conveyed to the Archdiocese. This includes having the donor sign the deed and recording it with the appropriate county. The Archbishop or his delegate has responsibility for the proper safeguarding of all deeds.
- Internal Revenue Service Form 8283. The internal Revenue Service requires that Form 8283 be completed so as to be filed with the donor’s tax return. Upon acceptance, the Stewardship Office will be responsible for completing the “Donee Acknowledgment Section” of IRS Form 8283, mailing the original form to the donor and a copy to the Archbishop or his delegate.
- Internal Revenue Service Form 8282. The Internal Revenue Service requires that Form 8282 be completed and filed (with respect to any real estate for which a Form 8283 has been filed) when that property is disposed of by the donee institution within two years of the date of gift. Upon disposition, the Real Estate Office of the Archdiocese will be responsible for filing Form 8282 in a timely manner.
- Maintenance, Upkeep, Insurance, etc. Prior to acceptance of any gift of real estate, a source of funds must be identified for maintenance, upkeep, insurance, etc. of the donated property.
- Life Estates
- Simple Life Estate Agreements: In the case of property donated to the Archdiocese subject to a life estate, the life tenant shall enter into an agreement in writing providing that the life tenant shall pay all the costs of maintenance and upkeep of the property including but not limited to repairs, improvements, taxes, insurance, etc.
- Life Estate with Lump Sum or Series of Payments: If the life tenant is also to receive a lump sum payment or a series of payments, a financial analysis will be done to determine the return on investment to the Archdiocese. The analysis will include the life tenant’s life expectancy, projected appreciation rate of the property, and estimates of future interest rates. Donor-authorized impounds from the lump sum will be necessary to cover maintenance, upkeep, insurance, property taxes, etc.
- Cost Recovery. Funds to cover costs such as appraisals, hazardous substance assessments, taxes, insurance, maintenance, and unanticipated expenses may be advanced from other funds of the Archdiocese and recovered at the time disposition of the property is made. The cost of recovery shall include interest on Archdiocesan funds, normally equal to earnings of funds operating as endowment. Donors shall be advised of this policy.
- Documentation of Acceptance of Property. It is the responsibility of the Stewardship Office to secure acceptance from any of those parties authorized to accept property (see above) and assure documentation of acceptance. Documentation may be in the form of a memo to the file or more formally by letter.
- Exception Procedure. Exceptions to these policies may be made by the Archbishop or his corporate legal delegate when such exceptions are deemed to be in the best interest of the Archdiocese. Such exceptions shall be in writing and set forth the basis of the exception.
Policy on Special Fundraising Activities #
A growing number of corporations and commercial enterprises are offering financial incentives to parishes, schools and Archdiocesan institutions. These offers pertain to various telephone services, private insurance packages, household and personal products, banking services, credit cards, and the like.
Any form of express or implied endorsement or promotion of a commercial enterprise or its product or service which encourages parishioners or other constituents to purchase the goods or services puts the parish, school or institution in the position of favoring one business over another for commercial benefit. This includes announcements, meetings, letters, sharing of mailing lists or other arrangements. A parish, school or institution that accepts these incentives risks being subject to unrelated business income tax liability as determined by the Internal Revenue Service.
In some situations there may even be conflicts of interest, such as the case where an employee, volunteer, or council/board member also works for the commercial enterprise involved. It is important that the Church remain above reproach in connection with the business affairs of others.
In addition, in the event of a customer’s dissatisfaction or consumer complaint with respect to the product or service, or if any harm comes to an individual as a result of the product or service that was “endorsed by the Church”, the parish, school, or institution, and the Archdiocese could be faced with adverse publicity and possibly even lawsuits.
More importantly, however, the Archbishop, in consultation with his staff, has determined that the Archdiocese and its parishes, schools or institutions must avoid any perception that the Church is “for sale”. Therefore, involvement with such programs is prohibited. This prohibition is also based upon “strong caution” from the Archdiocesan attorney and his Legal Affairs Advisory Board as well as the Office of General Counsel of the United States Catholic Conference.
There is nothing wrong with a company or any vendor publicly or unilaterally announcing (e.g. through a television or radio ad or parish bulletin advertisement) that it will voluntarily remit a percentage of sales to a charity. Nor is there anything wrong with a company donating, on an unconditional basis, money, goods or services for an event and for the parish, school or institution to publish a simple, unsolicited acknowledgment of its gratefulness for any such donation.
Hopefully the above guidelines will be of assistance to you in the event that you receive inquiries from companies or vendors. Should you have any doubts about a particular proposed arrangement, please contact the Stewardship Office.