Local Catholics had many questions in the wake of the Diocese of Rochester’s Sept. 12 filing for reorganization under Chapter 11 of the U.S. Bankruptcy Code. One of the most commonly asked was how the reorganization would affect parishes and other entities associated with the diocese.
In anticipation of that very question, diocesan officials answered it — and a number of other queries — in a collection of frequently asked questions and answers posted prominently in a reorganization section of its website shortly after the reorganization was announced.
“The parishes are separately incorporated under New York’s Religious Corporation Law. Charitable entities such as Catholic Charities are separately incorporated under New York’s Not for Profit Corporation Law,” states the answer in the FAQ document. “The ministries and operations of parishes and entities, such as our Catholic Charities agencies, should not be directly affected by the Diocese’s Chapter 11 proceeding.”
A diocese and each of its parishes are considered to be separate legal entities in the eyes of both the Catholic Church’s canon law as well as under New York state law, according to Father Daniel Condon, chancellor for the Diocese of Rochester. Under state law, the Diocese of Rochester is an incorporated legal entity that is separate from the parishes and other Catholic entities within its geographic territory. This structure is not new, as the diocese was first incorporated in 1887, according to Father Condon.
Each parish is a separate non- member corporation under New York’s Religious Corporations Law, which has specific sections for the Roman Catholic Church. Each parish corporation owns the property used by its ministry and is not under the fiscal or operating control of the diocese, Father Condon said.
Several other Catholic entities operate within the Diocese of Rochester’s geographic territory yet also are separate not-for-profit corporations that assist the diocese and the parishes in their ministries, according to Father Condon. Among them are Catholic Charities; the Rochester Catholic Press Association Inc., publisher of the Catholic Courier and El Mensajero Cat√≥lico; and St. Bernard’s School of Theology and Ministry. These entities are not under the fiscal or operating control of the diocese, he said.
At Catholic Charities, the “diocesan board is comprised of 21 persons and really operates as a separate entity from the diocese,” explained Jack Balinsky, Charities’ diocesan director. “Although obviously there is input from diocesan leadership, the board controls and makes its own decision.”
It’s important for people to understand that — although the Diocese of Rochester has filed for bankruptcy protection — the separately incorporated affiliates have not done so, Balinsky said.
“Catholic Charities is a separate corporation and we have not filed, nor do we intend to file, for bankruptcy protection,” Balinsky told the Catholic Courier.
Shortly after the Diocese of Rochester’s Chapter 11 filing was announced, the heads of several Catholic Charities agencies disseminated letters intended to reassure their agency’s supporters and clients. Friends of Catholic Family Center in Rochester, for example, received a letter signed by Marlene Bessette, the agency’s president and chief executive officer, as well as Stephanie Schaeffer, chair of the agency’s board of directors.
“I am writing to assure you that although we have a close working relationship with the Diocese of Rochester, Catholic Charities of the Diocese of Rochester — of which Catholic Family Center is a division — is a separate legal entity from the Diocese, and is not included in the bankruptcy filing,” Bessette and Schaeffer wrote. “Additionally, the minimal financial support we receive from the Diocese does not fund the services or programs that we provide to individuals; our client services and the funds we have to support those services will not be compromised by the bankruptcy.”
According to the agency’s most recent annual report, in 2018 Catholic Family Center received from the Diocese of Rochester $122,523, which represented a fraction of the $21.03 million in funding it received from such sources as government grants, the United Way, and contributions and bequests.
“We want to reassure you that any financial contributions to Catholic Family Center go directly to support our agency, and the services that we provide to our more than 25,000 clients each year,” Bessette and Schaeffer stated in their letter.
Supporters of Catholic Charities Community Services received comparable assurances, delivered via email Sept. 12 and signed electronically by Lori VanAuken, the agency’s executive director, and Tim Mason, chair of its board of directors.
“Catholic Charities is responsible for our operations, and financial management,” VanAuken and Mason stated. “We provide annual audits, file IRS 990s and have rigorous compliance policies and practices in place along with robust oversight by funders, government and a board of directors.”
“Our services to our clients will not be compromised by the bankruptcy,” VanAuken and Mason said.
Similarly, Karen Franz, the Courier’s general manager/editor, said, “We hope our advertisers, in particular, understand that diocesan reorganization does not affect our organization,” which is overseen by a 20-person board of directors largely comprising laypeople with expertise in communications and other relevant disciplines.
The Courier receives no funding from the diocese, supporting its operations through subscription revenues from parishes and the sale of advertising and other services, she said.
The support the Diocese of Rochester provides to Catholic Charities comes from contributions to the Catholic Ministries Appeal, Balinsky said. Each agency decides how to use its allocation of these funds, but many of the agencies use them to support their work with parishes through parish social ministry, he added.
Although the amount of such support may be minimal in comparison to funding from other sources, it remains important to the agencies, Balinsky said.
“We are told that we will have continued funding, although we don’t know the level yet, and therefore I would urge supporters of Catholic Charities in the diocese to contribute to the Catholic Ministries Appeal as another way to help Catholic Charities,” Balinsky said.
Tags: Diocesan Bankruptcy Updates
