This report of the comparative financials for the Diocese of Helena for the years ending June 30, 2009, and June 30, 2010, marks an important milestone: We are current with our financial audits. As I have noted in past issues of The Montana Catholic, we’ve had delays in our reporting over the past decade, but I am confident that timely financial audits will be the norm in the years ahead.

The diocese was notified of the unforeseen and generous gift of Charlie Lincoln’s estate in early 2007. Over $6 million of that bequest has been invested, as shown on the chart, with the earnings available to partially fund particular diocesan ministries. The Lincoln largesse left some of our people wondering why the diocese continues to request financial gifts from her parishioners, primarily through the Annual Catholic Appeal (ACA, formerly the Diocesan Offertory Program, or DOP) and the from Age to Age capital campaign.

In answering this question, it is important to recall that over the past 18 years the diocese paid over $7 million in lawsuit settlements and legal fees, which depleted the unrestricted financial reserves. If the Lincoln estate hadn’t been received in 2008, and the capital campaign hadn’t been successfully entering its redemption phase of pledges made by thousands of generous donors, the diocese would now be insolvent.

Restricted Versus Unrestricted Funds

When unrestricted reserves are depleted, the diocese becomes dependent entirely upon the annual appeal and diocesan assessment to fund its day-to-day programs, ministries and operations. As we all know, living through the Great Recession together, the economic situation for many households has been difficult over the past 2 1/2 years. Just as the diocesan and parish need for parishioners’ financial participation grew, our parishioners’ economic ability to respond to that need decreased. This was reflected, for a time, in the regular offertory collections throughout the diocese, and continues to be the case with the Annual Catholic Appeal, formerly the DOP. Despite the generous gifts of thousands of donors to the ACA, the annual appeal has been short for the past three campaigns. The combined goal of those campaigns was $5.09 million. Contributions are projected to fall short of that sum by more than $900,000.

While the infusion of money from the capital campaign and the Lincoln estate has helped specific programs and ministries, this money and other restricted funds, like the Annual Catholic Appeal, cannot be used to fund non-program related administration. We need unrestricted money to fund all of the administrative functions of the diocese, some of them in programs that receive a portion of the ACA. Diocesan offices partially funded by the ACA include Communications Services, Information Services, the Office of the Bishop and Stewardship Services. Administrative offices that do not receive ACA funding are Archives, Chancery Services, Facility Management, Financial Services and Human Resources.

Short-term & Long-term Funding Sources Needed

To adequately sustain our ministries and respond to the growing and changing needs of our people, we need both shortterm and long-term funding sources. Shortterm recurring annual programming needs are predominantly covered by recurring annual income. Long-term savings generate income to help supplement those needs over many generations. Sources of income in our annual budget for diocesan programs are the Annual Catholic Appeal, user fees, donations outside of the annual appeal to be used currently, endowment income from the Foundation for the Diocese of Helena Inc. and Roman Catholic Bishop endowments, other investment income and a portion of the diocesan assessment. If we had not invested most of the Lincoln estate, and instead spent those funds and suspended the annual appeal, the estate would now be completely depleted.

Instead of this dire scenario, the diocese has and will continue to benefit from investment of the Lincoln bequest. Our longterm gain was also boosted by the timing of our receiving the estate, in 2008, when investment values were very low. We endowed 51 percent of the estate in the Foundation for the Diocese of Helena Inc., and those endowments have grown, as has the investment return. This will continue into the future. Already the diocese is using the investment earnings from the endowed portion of the Lincoln estate.

The non-endowed estate stock portfolio recently was liquidated to meet the diocese’s financial obligations. This was necessary because of the estimated three-year, $900,000 shortfall from the Annual Catholic Appeal and the large cash outlay needed for parish construction projects. We could not withdraw the principal of the permanent Foundation for the Diocese of Helena Inc. endowments. Even if principal withdrawal were an option, we would not pursue it because that ultimately undermines the prospect of long-term financial stability.

Youth & Young Adult Ministry Benefits From Long-term Funding

An example of the benefit of long-term financial stability can be found in the priority capital campaign case element of youth and young adult ministry, which was apportioned 36 percent of the $12 million campaign goal. To date, the from Age to Age capital campaign endowment for youth and young adult ministry has $784,518 in principal invested. And $937,635 was set aside in a temporarily restricted fund within the Roman Catholic Bishop corporation to facilitate current youth and young adult ministry programming and initiatives over the next few years. The split between the endowed and temporarily restricted fund portions began at 25 percent endowed and 75 percent to the temporary fund. This split was 50/50 as of Nov. 24, 2009, and then went to 75 percent endowed and 25 percent to the temporary fund as of Dec. 13, 2010. Programs funded include the Office of Youth and Young Adult Ministry, campus ministry throughout the diocese and various parish and deanery youth and young adult programs.

At the end of the from Age to Age capital campaign, we will determine if more of the cash held in the temporarily restricted fund can be endowed, based on whether the endowment earnings, in combination with other revenue sources like user fees, adequately cover the recurring annual amount needed.

Because of the capital campaign endowment, we know that youth and young adult ministry will remain a sustainable priority initiative of the diocese that can be readily funded at some level. This allows for us to focus attention on other ministries essential to the future welfare of the people of the Diocese of Helena.

Lincoln House a Lasting Testament at Legendary Lodge

As I’ve said on prior occasions, I consider Legendary Lodge a highly prized resource in our diocese. Since the 1950s, the diocese has maintained a continual investment in this summer camp property on Salmon Lake. Each summer, hundreds of our youth experience the special grace of a week at Legendary Lodge. The benefits of Legendary Lodge extend into our parish communities and far beyond. The investments made in the past allow for the ministry experienced today, and we look to current generations to continue this investment in our Church’s future.

A portion of the Lincoln estate was used to build the Lincoln House at Legendary Lodge. The Lincoln House replaced Eagle’s Nest, a beloved, but severely limited recreational hall on the campgrounds. Lincoln House serves as an appropriate memorial and living testament to Charlie Lincoln and his mother, Anna, and their benevolence and generosity. The Presbyteral Council/College of Consultors and Diocesan Finance Council agreed to the designation of the Lincoln House as a visible memorial, and also agreed to use Lincoln estate monies to construct it.

Future Financial Stability

We are making a valiant effort to replenish the unrestricted funds we lost via lawsuits. In light of our financial pressures, I have called for an adhoc committee of the Diocesan Finance Council, which will include members of the Presbyteral Council, to formulate recommendations for replenishing unrestricted funds.

I want to take this opportunity to thank each of you for your stewardship offerings of time, talent and treasure to the Diocese of Helena. I am especially grateful for the sacrificial gifts so many of you have made in the midst of very challenging economic realities. Together we are spreading the Good News of our faith. May God’s blessings upon you and yours be abundant as we share this journey of faith.

Sincerely yours in Christ
Most Reverend George Leo Thomas
Bishop of Helena


Published in The Montana Catholic, Vol. 27, No. 2, February 18, 2011.