[Note: The following investigation is based primarily on tax returns the Roman Catholic Foundation of Eastern Missouri (RCFEM) filed with the Internal Revenue Service in 2015, 2016, 2017, 2018, 2019, 2020, 2021, and 2022. Form 990, the tax document all tax exempt organizations are required to file, is a complicated return handled by financial experts. I am not an accountant so there may be perfectly logical explanations for questions this report raises. However, multiple attempts were made to talk with RCFEM to clarify the numbers before going to press.]
In early 2022, within six months of his installation in St. Louis, Archbishop Mitchell T. Rozanski announced a plan called All Things New, a plan that had probably been in the works months before he arrived, a plan that in its first iteration proposed closing up to 78 of the area’s 178 parishes. Schools also were at risk.
Since the announcement, an energetic group of St. Louis Catholics have been battling and negotiating to save their parishes and schools. In the context of that struggle, some began to ask about the Beyond Sunday campaign. Ironically, only five years prior, in 2017, the Roman Catholic Foundation of Eastern Missouri announced it had raised more than $100 million for … parishes and schools.
A Foundation Is Born; A Campaign Is Launched
In the wake of the sex abuse crisis of the early 2000s and the subsequent avalanche of lawsuits, Catholic dioceses have undertaken a variety of strategies to shield Church assets from victims of clergy sex abuse. Some have declared bankruptcy, others have moved real estate holdings to separate corporate entities. Another common strategy is to set up a charitable foundation to hold assets.
In 2013, the Roman Catholic Foundation of Eastern Missouri opened for business under the shade of the archdiocese’s umbrella, and within two years, launched what the St. Louis Review called an “historic fund-raising initiative.”
According to the publication’s June 1-7, 2015 edition, the “’Beyond Sunday’ campaign, which will be conducted over the next two years, hopes to raise more than $100 million to build a war chest that will not only aid students from low- and middle-income families but also benefit programs or schools that enhance the already strong curriculum at Catholic schools in the Archdiocese of St. Louis.”
The fundraising initiative was an extension of Archbishop Robert Carlson’s emphasis on Catholic education. When announced, the funds were to be used exclusively for education. Grants to parishes were not part of the original campaign. That came later.
The St. Louis Review went on to explain that this fund would be operated as an endowment “with interest funding financial assistance.” However, it also said the Foundation had been “authorized” to release up to $5 million annually from 2016 through 2020, at which point, presumably, the interest-only provision would kick in.
Even though it was authorized to disburse up to $5 million, only once did RCFEM meet that mark. According to the Foundation’s 990s, disbursements for schools and scholarships stayed closer to the $4 million range annually during that time period.
Year Grants to schools + scholarships*
2016 $3,579,195
2017 $3,748,163
2018 $3,846,246
2019 $4,403,558
2020 $6,178,884
*These numbers come from Form 990 Part 1, line 13, second column “current year.”[Substack doesn’t support tables. Pardon the clumsy presentation of the numbers.]
Interesting Campaign Features
In the world of fundraising, campaigns typically aren’t announced until at least one third, preferably half, of the stated goal is locked down. The idea is to wait to make a public announcement until the organization is confident of successfully meeting the stated goal.
In this case, a brand-new charitable organization, within 18 months of its founding, announces a $100 million campaign to be completed in two years. It was an extraordinary amount of money to be raised in a very short period of time. Of course, there was a longer pledge period, but the time-frame to gather $100 million in commitments was only two years.
Trust But Verify contacted RCFEM’s campaign counsel to confirm this campaign goal and time-frame had been its recommendation. Based in New York, Changing Our World, directed St. Louis’ Beyond Sunday campaign for a $4.5 million fee, fairly typical for a campaign of that size. As of press time, Changing Our World had not responded.
Trust But Verify also asked Changing Our World if it had recommended a multi-million-dollar campaign for schools and parishes when Mass attendance and Catholic school enrollment were declining. Again, no response.
The so-called “silent phase” of a campaign, when top donor prospects are cultivated and gift commitments inked, can last several years. The public announcement of the $100 million campaign in June 2015 suggests major donors already were lined up.
If the purpose of the Roman Catholic Foundation of Eastern Missouri was to shield archdiocesan assets, it is possible the Foundation’s major donor was the archdiocese, and the plan was to transfer significant assets from the archdiocese to the Foundation as part of the Beyond Sunday campaign, simultaneously jumpstarting the campaign and the foundation.
The Confusion Begins
Sometime after the 2015 public announcement, a parish component was added to the campaign. Since there was not a 2015 Annual Report it is hard to know when and why such an unusual step was taken, but by 2016 RCFEM was reporting it had raised “$1.8 million for scholarships and $4.7 million in parish share distributions.”
The 2016 990 does not appear to support those numbers. The 990 suggests RCFEM under-reported grants for scholarships and education and over-reported grants to parishes.
In the table above, the 990 shows grants amounting to $3,579,195. That total is broken down in Part IX of the 990:
· Line 1, grants to organizations $1,036,501
· Line 2, grants to individuals $2,542,694
TOTAL $3,579,195
Drilling down even further, Schedule I (as in Invisible) of RCFEM’s 2016 990 details the specifics of the grants to organizations and to individuals. It shows 1238 scholarships amounting to $2,542,694 (approximately $2000 per student), 18 grants to schools and a grant to the Archdiocese of St. Louis’ education office. Schedule I carefully documents the amount of money that went to each school.
It’s not clear from the 2016 Annual Report where the foundation is finding the numbers they’re publishing -- $1.8 million for scholarships and $4.7 million to parishes. Trust But Verify contacted Scott Welz, the foundation’s Vice President and COO, asking for details about the distributions to parishes.
Welz responded: “Unfortunately, we are not able to share the detail of distributions to individual parishes or schools. It is up to each parish to decide how to communicate the benefits of the campaign to their parishioners. However, as mentioned in my first response, twice per year we provide each parish with a report of the impact Beyond Sunday has had for their parish and encourage them to provide an update in their bulletin. Each parish identified specific uses for their parish share distributions from the campaign and many do provide updates in their bulletins or through other communication channels to their parishioners.”
Quite obviously, RCFEM is able to share details of distributions to schools, see Schedule I. The problem seems to lie with the parishes, and that’s where the reporting becomes confusing.
Keep your calculators handy! In Part 2 of this report, parish distributions will be front and center. In the meantime, check out the other 990s to see if your favorite school received any funding. They can be found on Schedule I each year.
There may be a perfectly good explanation for these concerns. I’d be happy to publish a correction.