When the USCCB meets in Louisville, KY this week, one topic on the agenda is a review of the Catholic Campaign for Human Development (CCHD).
The program’s director of 16 years recently resigned, and its assets are at a 10-year low, The Pillar reported in April.
Although the USCCB’s press release described the review as “the process of discerning the next 50 years” for the CCHD, some commentators have seemed to interpret the review through a political or factional lens.
One commentator declared his concern that the USCCB might be “balancing the bishops' conference budget on the backs of its anti-poverty program” and thus “giving Pope Francis the middle finger.”
But the numbers suggest that an episcopal review of CCHD may be much more a matter of dollars and common sense than of competing partisan agendas.
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Founded in 1969, the CCHD is an annual collection administered by the USCCB.
Of the money collected, 25% is retained by the dioceses where it is collected, and dispersed to fund local poverty alleviation projects. The remaining 75% is distributed through grants typically ranging from $40,000 to $75,000 by the CCHD, to organizations which seek to reduce poverty through community organizing or action.
Unlike programs focused on directly distributing money or resources to those in need, the CCHD seeks to fund programs which assist or train people who want to make changes in their communities.
Among the larger grants for the 2021-2022 fiscal year listed on the most recent CCHD annual report were $72,000 to the Shine Together Co-Op, a worker-owned cleaning cooperative business. Seventy-five thousand went to New Jersey Together Inc, which advocates on housing and neighborhood issues. And $72,000 went to Chicago Coalition to Save Our Mental Health Centers which advocates for people to support expanded government funding for mental health services.
At times, this focus on funding community advocacy organizations rather than direct aid to those in need has stirred controversy.
Some have expressed concerns that groups funded by the CCHD have ties to issues which are contrary to Church teaching on the sacredness of life or on marriage. At the time of the 2008 election, conservative Catholics expressed dismay that President Barack Obama had gotten his start as a community organizer at a CCHD-funded group in Chicago, the Developing Communities Project.
A 2010 USCCB review of the project was meant to assure Catholics that a rigorous review process would prevent CCHD from funding groups with ties in conflict with Church teaching.
With that background, it’s perhaps unsurprising that observers used to thinking of American Catholicism in primarily partisan terms would immediately prepare themselves for a factional conflict over the upcoming review of the CCHD.
But the financials for the program, disclosed by the USCCB, suggest more basic questions may be at issue.
Over the last nine years, from 2014 to 2022, for which audited financial statements for the national collections are available on the USCCB website, the CCHD had expenses in excess of revenues in all but one year.
The numbers add up to a cumulative net loss of $30.6 million dollars over nine years.
It is not surprising for a program like the CCHD to see a net loss in some years, particularly years of economic distress. It would be common for a program which relies on donations and seeks to fund poverty programs to have a counter-cyclical budget: one in which it runs a deficit in years of economic trouble and a surplus in years of economic growth.
Looking at the largest USCCB national collection, the National Religious Retirement Office (NRRO) and also its other major charitable national collection, Catholic Relief Services (CRS): all three suffered from poor investment returns in 2015, 2018, and 2022. All three also had low collections in 2020 and 2021.
Those facts meant that all three major collections had low or negative net profits in those five years, but for NRRO and CRS, surpluses in the other four years balanced those negatives out.
Only the CCHD posted a negative net profit every year except 2017, in which a $4.5 million bequest outside the normal collection turned what would have been another $2.5 million loss into a $2.0 million net profit year.
After accounting for investment gains/losses and internal fund transfers, the net assets of the CCHD have decreased from $58 million at the end of 2013 to $8 million at the end of 2022.
It is certainly not the place of a charitable collection to consistently grow its endowment — and some experts warn nonprofits against holding too much cash in reserve — but at the same time, a program which completely depletes its assets is unable to help cover needs in the years when collections are down because of economic slowdown, or unforeseeable events such as a global pandemic.
While the bishops may want the CCHD to be aggressive in distributing as much assistance to reducing the structural causes of poverty as possible, some have also likely considered whether running the program at a consistent deficit — until it reduces its assets to zero or is forced to draw on general USCCB operating funds — is actually good stewardship.
The national collection yielded a consistent $9 million to $10 million before the pandemic, and by 2022, the collection had recovered to a level of $8 million, after some fall-off during the pandemic years.
But before 2020 the fund spent an average of $15 million per year, creating a gap between collections and expenditures which investment income was not sufficient to cover.
In 2020, the CCHD dispersed a record setting $18.8 million, despite the collection revenue falling to only $4.1 million.
In the years since, CCHD has continued to spend an average of $11.3 million per year, which is more than it has received in collections during any year over the last 10 years.
Regardless of the bishops’ commitment to fighting the structural causes of poverty, the CCHD is unable to continue spending money in excess of revenue, as the net assets of the program are rapidly approaching zero.
As the bishop seek to renew the direction and commitment of the program, it may be towards setting policies for basic fiscal management, rather than towards the broader discussion of policy that some commentators have forecast.
