Facing Challenges with Grace By Tim Moller, CFO
F
iscal 2020 Congregational financial results were slightly positive, despite the impact of the COVID-19 pandemic on expenses and the investment markets. Investment returns were in the 2-3 percent range, significantly less than the last four years which have averaged about 7 percent.
circumstance, employees continued to be paid and those present on campus received extra pay. The fiscal year was one of mutual gratitude – both the Sisters and their dedicated employees met their grace as lived out by their caring responses to each other’s needs.
Excluding investment results, total net operating revenue and expense were favorable to budget primarily due to lower than anticipated spending, higher bequest income, and the receipt of Economic Impact payments. Operating revenues and expenses were consistent with last year’s results.
The charts below depict the categories of congregational income and outflow for Fiscal 2020.
Looking ahead to Fiscal 2021, equity markets have recovered and are again near all-time highs despite the pandemic. Record levels of monetary and fiscal intervention by the Federal Reserve and U.S. Government have stabilized markets, but the economy still faces a high degree of risk. Investment market valuations are relatively high and any slowdown in the economy due to the pandemic or social unrest, could cause a significant market pullback. During Fiscal 2020, the Sisters of Charity faced challenges of historic proportions. The COVID-19 pandemic and resulting economic crisis and investment downturn were met with steadfast Sister of Charity resolve. Leadership put in place many new controls and safeguards to protect both Sisters and employees. At the height of the pandemic, certain employees were unable to be on campus to do their jobs; others could remotely perform their duties. Our employee caregivers remained on campus to provide for the needs of the Sisters. No matter the 22
On the Source side, Retirement Income provided 44.4 percent of Total Income, and includes support payments from the Sisters of Charity Charitable Trust, Social Security and Sisters’ pensions. Investment Income, which includes interest, dividends and realized gains, amounted to 47.0 percent of Total Income. General Congregational Income amounted to 7.9 percent of Total Income and is primarily comprised of Sisters’ earnings, bequests and support from benefactors. Other Sources totaled 0.7 percent. On the Use side, Retirement Related
Expenses was the largest expense category at 43.6 percent, and includes costs associated with the care of our retired Sisters. Unrealized Losses on Investments amounted to 21.0 percent. Local House Expenses, comprised of total living expenses for Sisters living away from the Mount St. Joseph campus and incidental expenses for Sisters living independently at the Motherhouse, amounted to 10.6 percent of Total Expenses. The cost of maintaining Sisters of Charity facilities is reflected in Property Expenses, which totaled 11.2 percent of Total Expenses. Service Department Expenses, net, amounted to 7.1 percent of total costs and includes the unallocated costs of Shared Services such as Maintenance, Grounds, Finance, Human Resources and Information Services. General Congregational Expenses, primarily comprised of administrative costs, legal and audit fees, insurance premiums and contributions, amounted to 6.5 percent of Total Expenses.
Sisters of Charity of Cincinnati, Ohio, Inc. Source and Use of Funds June 30, 2020
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Source of Funds 1 Investment Income 2 Retirement Income 3 General Congregational Income 4 Other Income
46.98% 44.37% 7.86% 0.79% 100.00%
Use of Funds 1 Retirement Related Expenses 43.62% 2 Unrealized Losses on Investments 20.97% 3 Property Expenses 11.17% 4 Local House Expenses 10.62% 5 Service Department Expenses, net 7.11% 6 General Congregational Expenses 6.51% 100.00% I n tercom
