April 21, 2007 in Business, City

Parishes, diocese to formalize relationship

Under new business structure, each will become separate nonprofits
By The Spokesman-Review

Parishes have been told to bring blank checks to a Sunday meeting with the Catholic Diocese of Spokane, and to be prepared to sign papers and pay license fees turning each congregation into a separate nonprofit corporation.

With little time to research the new business structure, some parishioners worry it awards the bishop dominance through a governing three-member board of directors that includes two priests and the finance council chairperson.

The parish attorney who helped draft the new incorporation papers, though, said the move brings harmony between secular civil laws and the canon laws governing the Catholic Church.

“The priests will have a duty of loyalty for the best interests of the parishes,” said attorney John Munding, who represented the Association of Parishes throughout the 2 ½-year diocese bankruptcy. “Each will understand their fiduciary responsibility to the parish as a board member.”

The changes are meant to formalize the relationship of parishes to the diocese and Bishop William Skylstad through the contentious bankruptcy. Determining the ownership and control of the parishes was a dominant issue in the bankruptcy.

Still, some say that the bylaws of the nonprofit parishes would do little but set up a collection of dummy corporations — noting that it is the bishop who appoints priests, expects their obedience, and thus controls the parishes.

One concern is that the two priests on each board are given the power under the proposed bylaws to vote to remove the parish finance chairperson from the board. There is no such provision for the removal of a priest from the parish board. Furthermore, the number of board members and their method of appointment would be ironclad and may not be changed by amendment.

The rules and make-up of the board is different than that of many nonprofits, which depend upon a collection of independent outside directors that outnumbers employees. It is a design that helps to ensure that decisions benefit the organization rather than individual interests — a key concern for donors or recipients of services provided by nonprofit agencies.

Munding cautioned that governance within the Catholic Church is different.

There must be an adherence to canon laws, which don’t necessarily fit perfectly within the best business principles of every country, he said. Canon laws, after all, have provided consistent governance for the church across the globe for 2,000 years.

These business corporations are new for the Catholic Church in the United States. Munding said this change in church governance is overdue and should give the parishes more autonomy.

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