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Catholic Charities plans to cut services, consolidate
By Walter V. Robinson and Stephen Kurkjian, Globe Staff, 9/20/2002
The transformation of the agency was announced to the Globe the day after its board, appointed by Cardinal Bernard F. Law and containing some of his strongest supporters, voted unanimously at a private meeting for a proposal that would give the board some autonomy. The cardinal can fire its members at will and even change the charity's bylaws without board permission. The vote, taken with the knowledge that the cardinal does not favor such a change, amounted to a quiet act of defiance, according to board members who spoke on condition that they not be identified. They said yesterday that some board members have talked of resigning if Law does not agree to the change. The agency, which provides services to 175,000 people a year as one of the state's largest social services contractors, said it has already begun to refocus on what has always been its core mission: assistance to families, children, and refugees. Neal F. Finnegan, the chairman of Citizens Bank Massachusetts who is chairman of the charity's board, and Catholic Charities president Joseph Doolin said in an interview that the agency will no longer offer residential programs, such as those for AIDS patients, homeless families, and people who receive substance abuse treatment. But they emphasized that for every one of those clients, Catholic Charities will ensure that another agency takes over the service. Just over 10 percent of the agency's clients are in those categories. For the vast majority, they said, services will continue. But to deliver those services more efficiently, they said, Catholic Charities will adopt the settlement house model, delivering multiple services at six large sites in South Boston, Dorchester, Lynn, Lowell, Framingham, and Brockton. Doolin attributed some of the agency's chronic deficit problems to what he called ''the Catholic Worker mentality: If a person is hurting, we make a decision to bind him up, and then we figure out later how to pay for it.'' As a result of decisions to add programs, the charity had become, he said, a loose confederation of independent agencies, many of them with their own redundant bureaucracies that drained funds that ought to be redirected to services. The agency typically ran an annual deficit in the neighborhood of $1 million on a budget of about $40 million - $29 million of which comes from the state. Finnegan said a management review, done by members of a revitalized board that had long left most decision-making to a six-member executive committee, discovered that in many areas, the charity was ''sub-optimized.'' Among other shortcomings, Finnegan said the review discovered that Catholic Charities had 3,000 vendors, an anachronistic computer system, and a fund-raising and grant-writing office that needs an infusion of new talent. The agency's computer systems are so outmoded that Doolin said many of the 52 offices cannot communicate by e-mail, and often resort to faxes. To trim its budget, the 1,400-employee agency laid off 70 employees in its last fiscal year and plans to cut its payroll by a similar number this fiscal year, which ends in June. By the time the reorganization is complete in three to five years, Doolin said, the Catholic Charities workforce is likely to be reduced to about 1,200. Both men, along with Peter G. Meade, the board vice chairman, said the changes grew out of a management review by McKinsey & Co. and board members that began before the clergy sexual abuse scandal exploded in January. The scandal, too, has sapped the agency of some of its funding. For one thing, the cardinal's annual Garden Party, a gala event that raised $1.4 million in 2001, was cancelled. The ''virtual'' garden party that was organized in its place to solicit money from traditional donors raised barely half of the 2001 amount, according to Doolin. The three men said Cardinal Law approved the service changes during a meeting last Friday. The cardinal has yet to approve a recommendation that the 55-member Catholic Charities board be given some autonomy. But even without the cardinal's blessing, the board on Wednesday night voted unanimously for a new governance structure that would have Law appoint members to staggered three-year terms, from which they could be removed only for cause. That change cannot take effect without Law's approval. But some board members said they feel it ought to occur to assure the public - and Attorney General Thomas F. Reilly, whose office oversees public charities - that the agency has some autonomy as a publicly funded service provider. One board member said the Rev. Philip B. Earley, the lone priest on the board, recommended that members not vote on the proposal. The board member quoted Earley as warning that such a vote ''might be seen in an unfavorable light'' by the Chancery. Earley abstained from the vote. He could not be reached last night for comment. Finnegan, the chairman, said in the interview that there is no friction with the archdiocese over the governance issue. ''The ultimate control rests with the cardinal. And no one is uncomfortable with that,'' Finnegan said. He said there is no concern about the cardinal exercising undue influence, and he and Doolin said the change in board structure is designed principally to ensure that Catholic Charities is overseen by a board with enough independence to satisfy regulators. Finnegan also said the board decided to take no position on whether to accept donations funneled through Voice of the Faithful, the lay organization that has sprung up this year. The group has been unable to get the archdiocese to agree to accept earmarked contributions that some Catholics are unwilling to give directly to the church. For now, the three men said, Voice of the Faithful has agreed not to donate funds to Catholic Charities. As long as that agreement is in place, there is no likelihood for a confrontation between the charity and the archdiocese. But some board members said that if the day comes when Catholic Charities is offered a donation from the new lay organization, the board would probably defy the cardinal and accept it. Walter Robinson can be reached at wrobinson@globe.com. Stephen Kurkjian can be reached at kurkjian@globe.com.
This story ran on page A1 of the Boston Globe on 9/20/2002.
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lagued by chronic deficits and antiquated management systems, Catholic Charities, the social service arm of the Archdiocese of Boston, announced yesterday that it will shed some of the services it now provides as part of a major restructuring that will, within five years, reduce the number of sites where it delivers services from 52 to six.