Home / News & Publications / Michigan Catholic News / 2008 / Archdiocesan finances solid despite crisis, official says
Archdiocesan finances solid despite crisis, official says
by Robert Delaney of The Michigan Catholic
Published November 21, 2008
Detroit — Archdiocesan finances are sound, despite some setbacks from the current financial crisis, says the Archdiocese of Detroit's top financial officer.
"We're taking our fair share of lumps, but I think we're probably in a better position than some, because the Archdiocese of Detroit's investments lean toward the conservative side," Daniel Oliver, archdiocesan director of finance and administration, said Nov. 12.
Since parishes keep their savings with the archdiocesan Loan-Deposit Program, rather than in banks, Oliver said pastors and parishioners can rest assured that their funds will be available when needed.
"The program is still liquid, and can still meet the needs of our pastors who request a withdrawal, with no issue," he said.
Oliver explained that archdiocesan investments are "well diversified, and there's not a large percentage of our portfolio invested in equities" (meaning stocks). He said the preponderance of archdiocesan funds are in fixed-income instruments, such as U.S. Treasury securities and short-term commercial paper.
"We do have some money in equities, and we've taken some hits there, but we are under no pressure to liquidate those equities, and we're hoping to see some kind of rebound that will enable us to recoup those losses," Oliver continued. The archdiocese's cautious investment policy has meant only scant impact from the headline-making debacles that have roiled Wall Street and financial centers. "Our exposure to the problems of Lehman Brothers, Merrill Lynch, AIG and others like that has been very minimal," he added.
The declines in the weekly collection-plate revenue affecting many parishes has yet to impact the archdiocese, Oliver said, because the 6-percent assessment on parish revenues — the cathedraticum — paid by parishes is always based on parish operating revenues from the previous fiscal year. The archdiocese's fiscal year runs from July 1 through June 30. "What's happening in the parishes now is really going to affect us more in 2009 and 2010," he said, saying he is anticipating a decline in revenue roughly in the range of 4 to 7 percent.
And the archdiocese will have to figure that decline into its future budget. "Just like every other organization, we're going to have to pare back any non-essentials, while continuing to provide services to the people of the archdiocese," he said.
Parishes file their financial reports for the previous fiscal year in mid-August, and the compiled results are presented to the archdiocesan financial committee in December. The full financial report is posted on www.aodonline.org in March. Oliver joined the archdiocesan Department of finance and Administration in November 1982, and became its director in 2006. In those years, he has seen financial markets go through several crises, such as the stock market crash in 1987, the bursting of the "tech bubble," the market decline of spring 2001, and then the market turmoil that followed the terrorist attacks of Sept. 11 that year.
"So, we've seen hard times (in this department) before, and the market has always bounced back. It's just a matter of when, and how high it will go," he said, explaining his confidence in the long-term health of archdiocesan investments. Still, he acknowledged that rapid declines can easily frighten many investors: "The ride down is normally a lot faster than the ride back up."
But Oliver said the archdiocese is viewing the situation calmly, making only minor portfolio adjustments. "We're holding fast – not panicking and selling off," he said.
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