How much money does the local church take in every year?
Revenue and cost numbers (the entries on an income statement) are generally more reliable than asset numbers, but it is hard to say how much the church takes in because there are so many organizations and channels of money. Money goes from the parishes to the diocese so what is an expense on a parish income statement is a revenue on the diocese statement.
In his address to the Assembly of Catholic Professionals in Sept 2014 https://vimeo.com/113746339, Bishop Vasquez said annual collections by parishes were about $90 million. This is harder for me to make sense of than his statement about the real estate value. There are some wealthy parishes in part of Austin but I can’t see the total being $90 million. Maybe that includes school tuitions.
The Central Administrative Office had revenues of $39.1 million for the fiscal year that ended in June 2015. http://www.austindiocese.org/content/fiscal-year-2015-audited-financial-statements The main sources of money were direct contributions to the diocese from individuals, money from the parishes given as Cathedraticum assessments (similar to a royalty or tax), gains from investments, and services for banking and insurance the diocese provides to the parishes.
Remember: the more correct description for charitable and religious organizations isn’t "non profit." It’s "not for profit." These organizations can make profits in any given year as long as that is not their goal and in the long run their net profits approach zero. In recent years the Central Administrative Office has been making healthy profits.
| Fiscal Year | 2013 | 2014 | 2015 |
| Revenue | $35.6 million | $38.4 million | $39.1 million |
| Profit | $0.8 million | $6.0 million | $5.6 million |
How good is this? Compared to some large corporations.
| Organization | Profits as share of revenues |
| Walmart | 3% |
| Exxon | 8% |
| Apple | 21% |
| General Electric | 10% |
| AT&T | 4% |
| Austin Diocese Central Administrative Office | 15% |
Now the corporations are subject to income tax, while the church is not, so it’s not apples and apples, but this gives an idea of how much money the diocese has been making in recent years. Of course you could argue that as an insurance business the diocese should be running profits in years it doesn’t have to pay out major claims.
And if you add the CAO and the parishes together, the profit margin percentage is not nearly as high. One legacy of the 2007 reincorporation and breakup was that it concentrated profits in the CAO.
Breakdown of where money comes from
The diocese gets money from direct contributions, payment from parishes, money from its insurance and banking practices, returns from investments, and miscellaneous fees and rentals. Major sources of money include
Catholic Services Appeal – about $5 million
The Catholic Services Appeal is an annual fund drive that asks individuals to contribute directly to the diocese. In recent years it has brought in about $5 million per year. Most individuals give more to their parish than to the CSA. If CSA contributions went to zero, the diocese would still be making profits in recent years.
Cathedraticum Assessment – about $6 million
Cathedraticum assessment. Latinate terminology aside, this is exactly how franchises work. Many businesses are franchises, especially national businesses with local branches such as restaurants, oil change places, gyms, hair salons, etc. The franchisees pay the franchisor a percentage of its revenues. The arrangement is different in different businesses, but almost always the local franchisee pays a set percentage 10%, 8%, whatever, of the money it takes in to the parent franchisor. This is a percentage of sales, not of profits.
According to the notes in the diocese income statement, each parish pays 10% of the money it takes in to the diocese. Parishes with schools are allowed to pay only 9%. That means for every dollar you put into in the collection basket, 10 cents (or 9 cents) goes to the diocese. Based on the 2015 total of $6 million, we would estimate revenue to the 123 parishes at somewhere between $55 million and $60 million per year.
Insurance premiums – about $13 million
The parishes buy insurance from the diocese. It breaks down into three big categories
Employee health insurance and pensions. The 2007 reincorporation broke up the big business of the diocese into scores of small businesses and made staff members are different parishes no longer employed by the same entity. But small businesses cannot get as good a deal on insurance as larger businesses, so the diocese does a trick and accumulates all those employees together and presents them to the insurance companies as a whole. By contracting insurance services for a large group of employees, the diocese gets a better deal than each parish would be able to get.
Property insurance. Buildings must be insured, and the parishes do not have a choice of insurance companies. They must pay the diocese for insurance. I don’t know whether the diocese is entirely self-insured or hedges with reinsurance by buying insurance from another company. I suspect it is a combination with the diocese covering small claims and larger losses triggering a payment from a specialized insurance company.
Liability insurance. Small businesses must have liability insurance. So many people set foot on parishes campuses that there is the potential for slip and fall type claims. Additionally, there must be insurance against misdeeds of employees, and Catholic churches found this hard to get in the wake of the sex abuse scandals. Insurance companies would not cover parishes or dioceses, so the diocese stepped in and is self-insured for liability.
You might be thinking: doesn’t that mean the diocese must save up a lot of money in cases there is a big liability claim in the future? I guess so.
Banking services – interest received from the Diocesan Investment and Loan Program was $4.6 million in FY 2015
The Diocesan Investment and Loan Program is a way for the CAO to lend money to parishes and schools to build new facilities. Parishes and schools borrow money from the diocese and then repay that money with interest. The DIAL program also is a place for parishes to keep their extra money.
(Parishes have accounts with commercial banks so they can do regular business. Checks written by the parishes come out of these accounts. Parishes can save money at those banks as well as with the DIAL program.)
The CAO both borrows money by issuing bonds that it pays interest on, and lends money to parishes and schools at a higher interest rate. This is how banks make money, too.