Newspaper alleges Chicago Archdiocese uses cemetery funds to pay abuse costs

An article was published last weekend by the Chicago Sun-Times that questioned if money from the Archdiocese of Chicago cemetery operations was being diverted to pay down debt incurred because of priest misconduct cases.  You can read the article here.

The Catholic Church in Chicago has for years said, according to the article,  that the money to pay these costs came from two sources:  loans and the sale of property.  However, the Sun-Times says that credible sources estimate that about $8 million per year has been shifted from the cemetery system to pay down the debt owed.

In the article, church spokeswoman Paula Waters is quoted, “Investment earnings on cemeteries assets are used to help fund annual debt payments.  These investment earnings are over and above what is needed for the proper care of our cemeteries.”

A church report says that operating income for the cemeteries comes from sale of easements providing for graves, crypts and burial services, and from investment earnings.  According to that same report, the cemetery system has more than $600 million in investments in 2017.

The Sun-Times also reported that the diocese cemeteries generated about $52.5 million in revenues from “sales and services” in 2017 and had approximately $53.6 million in expenses for the same period.

Funeral Director Daily take:  My take on reading this article is that the truth about how this cemetery money is used probably lies in the semantics of what or how things are said.

From my point of view, it looks like investment earnings, over and above what the cemeteries require, is used to pay down “debt” of the church.  This “debt” may include debt that originated with priest abuse cases. . . we just cannot tell from this article.  And as long as there is adequate revenue to fund the cemeteries upkeep, many people will feel that this is appropriate use for the extra investment income.

On the other hand, using the earnings from a cemetery perpetual care fund for other uses than cemetery upkeep – whether a church cemetery or other – will in the long run erode the earning power of the perpetual care fund.  That is probably not good practice anywhere as expenses will eventually grow with inflation and fewer lot sales will reduce revenue providing for a doubly whammy on cemetery operations.  We have seen lower cemetery revenue through increased cremation cause that problem in a lot of cemeteries already.  I would argue that the extra earnings should be added to the perpetual care corpus to gain greater long-term earning power.

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