Financial Report to
This document presents major extracts of the FinancialReport presented to the 1998 General Chapter by General TreasurerFrAlfons Keuter. The General Treasurer's office assumes responsibility forthe content and translation.
The Superior General in fulfillment of his responsibilityto report on the state of the Congregation as called for in Rule 117has asked me to present a detailed financial report to the Chapter. Asyou knowa select committee on finances will study this report and makeits recommendations to the Chapter body.
In Part One of my reportI will describe thedevelopments which have taken place from 1986 to 1998. This representsthe twelve years of the mandate of this Administration. In Part TwoI will report on the actual financial situation both of the General Administrationand of the Congregation. In Part ThreeI will offer personal observations.
The changes which have taken place during the past fortyyears make the context of this report. When I entered the Oblates in 1958the Congregation lived from the income of its work in a more or less ruraleconomy. The work of the brothers on farms and in gardens was essentialfor our sustenance. The missions were supported by the home provinces.
Forty years agoaccounting and reporting practiceswere held in secret. Todaythe provincial financial reports are discussedat nearly all regional meetings of provincial treasurers. Communitiesdiscuss the personal budgets and year-end financial reports.
Before 1972the General Administration was chargingfor each and every service. Today the General Administration is functioningsolely from the contributions of the Provincesand offers in additiona professional asset management service.
Especially you have to understand the first part ofthe report within this context of continuing changes. The report reflectshow this administration has tried to accompany all these developments.
1.1 Administrationof Our Temporal Goods
1.1.1 Changes in Financial Reporting
We introduced regular feedback reports that make itpossible for provinces to compare their figures with the average figuresfor the Congregation. This is an important element to initiate discussionand communication in and between Provincesso that Oblate property isnow understood as Common Property.
1.1.2 Formation Programs for Provinceand Delegation Treasurers
1.1.3 Visits with Provincial andDelegation Councils
In a decentralized structure such as oursthe provincialand council play an important role since all the assets of the Congregationare primarily administered at that level. During our exchangeit becameclear to the provincials and councils how proper financial reporting makesit possible for the General Administration to provide feedback informationthat can be helpful to their provincesespecially in realizing propertyas common property of the Congregation.
1.1.4 Financial Formation ÐParticularly at the Level of Initial Formation
1.1.5 Finance Committee
1.2 Financial Self-relianceof Oblate Units
1.2.1 Sharing Institutions
(2) GENERAL ADMINISTRATION
1.2.2 History of Oblate Sharing Programs
1966: Credit Union: is a loan program.
1.2.3 Differences Between Sharing Funds and CapitalSharing Program
OSF / FJF -> provide grants for projects
OSF / FJF -> funds are used up in projects
OSF / FJF-> can create dependency
1.2.4 Capital Sharing and the 1992General Chapter
a. Contributors: All 65 Oblate entities are askedto participate in the Capital Sharing Program even through a modest giftfrom its patrimony. This highlights the fact that our financial holdingsare for the common good of all Oblates as it is expressed in Rule 15:We "will be solicitous in sharing resources with Oblates workingin poorer areas and in missions with fewer material goods."
b. Recipients: Oblate entities whose requestsmeet established conditions will receive a capital grant with certainrestrictions attached to its ownership.
c. Ownership Restrictions: When Capital is grantedownership is transferred with the following restrictions:
- the capital being stable patrimony to help cover ordinaryexpenses is not to be touched for 15 years.
d. Amount of Capital Shared: The Board has studiedthe requests of 20 Provinces and Delegations. 18 Provinces and Delegationsmet the established conditions. To themthe total amount of $10695000was allocated. But as of July 11998$4956000 plus $227000 pledgesfor 1998 and 1999 have been given and were actually transferred throughthe program. Therefore we still have to raise $5412.000 to meet our pledges.The request of two Delegations will be discussed again with others tocome in the future. - The good effects of this capital sharing are alreadyobvious in the fact that the first recipients of capital sharing allocationsdid not request any grants from the Oblate Sharing Fund in 1997.
e. Amount of Capital Needed: In 1992 the aimwas 10 million US dollars. In the light of our experience of the pastsix yearsa total amount of 14 million US dollars will be needed untilthe year 2004. It would seem that this amount can be raised from the surplusreported annually by Provinces and Delegations.
f. General Chapter of the year 2004: The 2004General Chapter will evaluate the Capital Sharing Program to see its effectson the self reliance of the Provinces. Due to diminishing membershipthis Chapter will have to take appropriate decisions to ensure the futurefinancial stability of the Congregation.
1.3 The OblateInvestment Pool (OIP)
1.3.1 Establishment of the OIP: In light of theabovea central administrative structure was established in January of1991 creating a situation in which all parties involved share fully inboth the risks and the earnings. This approach is in line with a decentralizedorganization such as ourswith each Oblate unit retaining the ownershipof its funds. This new structure also has the advantage of serving asa bank for the Capital Sharing Program. The diversification of investmentsamong seven different markets provides a greater security for our investedassets.
1.3.2 The Legal Structure: The OIP was officiallyinaugurated as an arm of the General Administration on January 11991.In 1994 it was legally separated from the General Administration and establishedas an independentnot-for-profitlegal entity in Germanyrecognizedthroughout the rest of Europethe United States and Canada as well. Itstitle is presently the Association of Oblates for International Pastoralregistered (O.I.P.). The Board keeps the General Administration regularlyinformed.
1.3.3 Benefiting from the Earnings: Now our investmentstake full advantage of the world equity and bond market. This is in keepingwith the good stewardship of our patrimony because we have changed ourstrategy from short term deposits to long-term investments which givesthe opportunity of higher return. It is in the interest of the Congregationto administer our assets for the benefit of the members and our mission.
1.4 The State ofOur Oblate Sharing
1.4.1 The level of sharing within the Congregationis considerable surpassing 8 million U.S. dollars annually accordingto a questionnaire for the years 1995 and 1996not including the allocationof the OSF and the transfer of mass stipends.
1.4.2 Requests made to our various Oblate sharingfunds often lack the type of information useful in carrying out ourown fund raising campaignor are not detailed enough to refer to non-oblatefunding agencies.
1.4.3 We need to direct our money primarily tothose Oblate projects which cannot be funded by outside agencies. It isimportant to be able to recognize those projects for which outside fundingmay be obtained.
1.4.4 Based on the above observationstwoproposals for the consideration of this Chapter Body are in order:
- That a standard application format and procedurebe adopted for use throughout the Congregation. This format will helpto present the information necessary to refer requests for the fundingof development projects to appropriate outside agencies.
- That a post be created to provide a representativeof the Congregation to establish contacts with funding agencies throughoutthe world.
1.5 Conclusionof Part One: Evaluation of these Developments
1.5.1 The quality of our financial administrationhas been enhanced throughout the Congregation thanks to the training sessionsfor Provincial Treasurers and the new uniform consolidated reporting format.Quality feedback is now available to facilitate better long-range planningand communication at the province and general levels. Togetherthesedevelopments have greatly improved our understanding and practice of accountabilityand have contributed to the standardizing of bookkeeping and accountingpractices.
1.5.2 Through our formation efforts amoreresponsible understanding of common property and a greater ownership ofinvestments at the province level has come into play. Given our decentralizedstructureit is of value to see our financial assets as common propertyfor Oblate mission and the importance of inter-province sharing as anintegral part of our missionary structures. Separate treatments in ourConstitutions and Rules for the individual vow of poverty and for theAdministration of common temporal goods should help us understand bothsides of the coin: the orientation of our individual vow of poverty towardsa greater simplicity of life and the orientation of our temporal goodsas common property towards a responsible stewardship.
1.5.3 An appropriate integration of the Provinceand Delegation Treasurer within the provincial and delegation councilstructure has yet to be achieved in some parts of the Congregation. Theadministration of the common property of the Oblate Congregation is entrustedto the Province and Delegation Treasurers because all assets of the Congregationare administered at this level. It is important that they be present inthe Council when discussion occurs and when decisions are taken concerningthe common property of the province. A second argument for his presencemay be: The Congregation moves to a situationwhere money produces thebigger part of our incomeno longer the work of the Oblates. The participationof the Province Treasurer will be in the best interest of the Congregation.
2.1.1 The Financial Situation of the General Administration
The Liabilities are reduced by more than half becauseof lower deposits.
The Oblate Patrimony increased by $2.2 millionwhichis $146 million in the Congregation's Funds and $0.76 million in theGeneral Administration's Funds.
The overall situation is quite sound.
2.1.2 The Funds of the Congregation
The OSF is to assist Provinces and Delegationsin their sustenanceformationhealth and retirement as well as for missionaryworks. The FJF is to help meet the cost of initial formation inProvinces and Delegations unable to do so.
Both Funds are administered by the Superior Generalin Council. An interest of eight percent generated by the capital of thesetwo funds is distributed annually. Requests for grants have to be receivedat the General Administration by March 31on an official form and mustbe endorsed by the Major Superior.
The Oblate Credit Uniona CooperativegivesProvinces and Delegations low interests loans for extraordinary projects.It has a capital of $4.011.794from which $3.475.984 is in use.
2.1.3 The Funds of the General Administration
The undesignated Fund of the General Administrationis considered its Net Worth. Earnings from these funds are used to financeformation sessionsthe Aix programsthe cost of various publicationsthe Association for Oblate Researchas well as other animation activities.(In the General Administration's linguistic usage we call this "SpecialBudget".)
2.2.1 Revenue and Expenditures
The policy of the Congregation has been to cover ordinaryexpenditures of the General Administration with the contributions of Provincesand Delegations. This is no longer possible. Over the past six yearsthe shortfall totaled some $800.000. This deficit was covered with incomefrom donations and giftsfrom the sale of inventoryfrom ministry ofthe members of the General Administrationand by reallocating some reserves.I shall revue with you the details of the ordinary budget. First a lookat the special budget.
Although we show a surplus in the special budgetitis good to note that we have been showing significantly lower revenuesover the past six yearsand increasing expenses.
Total revenues are down some $5 million since the lastChapter. The capital gains are lower because of change in policy: theOSF/FJF portion was credited to the OSF/FJF capital.
Some high cost expenditure items:
General Services: - Chapter and Inter-ChapterSessions: $140.000 increase. -- Expenses for Aix programs: $140.000 increase.
Administrat. Services: - Canonization $90.000;-- OMI Atlas & Personnel $45.000.
Sharing Services: - Gift of $200.000 to CapitalSharing Program.
Portfolio Services: - Lower cost for us due toa decreased number of depositors.
Upkeep of property: - The full cost of majorrenovations of the General House was paid from investment earnings. Provinceswere not asked to contribute.
2.2.2 Ordinary Revenue from Provincial Contributionsfor the General Administration
First Category: Developing countries: 55 ECU
Since 1992our membership has diminished by 10%mostlyin the highest paying category. During that time we increased the headtax only once by 10%. We have decided on an increase in 1998 - 200/120/57ECU. - The ECU currency was selected as the currency basis to better handlecurrency fluctuation. (Our reporting is in US$our expenses are mostlyin ITL. When the US$ is highexpenses in ITL are loweralso contributionwill be lower and vice versa.)
With your contributions you do not only finance theGeneral Administrationbut you get also the service: The members of theGen. Administration travel to you for various eventsthe service of theinformation department which cost over $100.000 each yearand the serviceincluding airport transportation for all visitors who are not obligedto pay for their stay in the General House.
2.2.3 Ordinary Expenditures of the General Administration
Personnel Service: (= 12 members of the GeneralAdministration)
2.2.4 Where We Find Ourselves
2.3 The Congregation as a whole
2.3.1 State of Assets
1. The decrease in fixed assets reflects the adjustmentto the historical costs for all entities.
I consider this an appropriate growth. It reflects asound situation. Pleasedo pay attention to the increase in real liabilities.Note as well that the deposits held formerly by the Mother-Provinces fortheir Delegations and Missions were transferred to the OIP. - We haveto add assets for other Oblate entities such as universities etc.
2.3.2 Revenue and Expenses
The deficit in the ordinary budget (revenue from Oblatework and expenses for Oblate community) increased slightlybut the increasein revenue from investments increased substantially. This is the reasonfor the $4 Mil increased surplus. The amount in gifts is quite stable.
2.3.3 Contributions to Provincial Administration
3.1.1 Common property: Oblates are bound by thevow of povertysupported by common property owned by each legal Oblateentity. It appears to me that some Oblates do not act with the awarenessof the fact that all our temporal goods are common property of the Congregationfor the mission of the poor. I feel that a proper sense of responsibilityfor this common property is missing. The step from this state to realabuse resulting in the waste of common property is indeed a small one.
Essential for the understanding of common property isthat the communities are informed about itand that they speak aboutit. There is no real community where the financial dimension is excluded.Therefore disclosure and discussion about our assets will create the spiritualdimension of our property and increase the responsible use of our assets.This needs to be an area of special concern for first formation.
3.1.2 Self-reliance: Constitution 78 states thatan Oblate province must have sufficient revenue for its stability anddevelopment. A delegation as an entity on its way to becoming a provincemust find ways to eventually provide for its autonomous financial functioning.Some delegations do not realize this and seem to expect to be supportedforever. Ministries that bring a positive support to a delegation aresometimes too quickly discardedthus affecting the development and stabilityof the delegation.
3.1.3 Lifestyle: Living standards are supportedby the collective achievement of the members' labor. If the group's labordoes not produce sufficient revenue and the basis of its stability resultsfrom investmentsthe provincial and council must take care that the provincedoes not become totally independent of the fruit of its laborand alsothat the lifestyle corresponds to the people with whom we work and amongstwhom we live. It is a fact that some Oblate units work with the poor whocannot contribute to our sustenance. These Oblates depend on investments.But it is also a factthat other Oblates accumulate wealth with theirinvestment earnings. What are the values underlying our accumulation ofwealth? Is it a question of security and protection? Is it a means formission? Is it to assure a comfortable lifestyle?
I am moved by other questions concerning lifestyle:Do all our provinces really see their capital as part of the global commonproperty of all Oblates? Our Chapter theme surely invites us to see ourproperty as being at the service of the evangelization of the poor. Mustwe continue the practice of 2 or 3 month home leave in an era of air-travel?Are we truly supporting a missionary practice when we harbor the attitudeof a 40 hour workweek?
3.1.4 Oblates as Builders: The situation is asfollows. Since the 1992 Chapterthe General Administration gave permissionto build 60 houses at an overall cost of about US$42.179.853. In detail22 constructions were formation houses11 provincial houses and 4 housesfor senior retired Oblatesthe other 23 were for pastoral and other purposes.In the developing continents the number of vocations is increasing andwe have been obliged to build new formation houses. For the years aheadthe following formation houses can be projected: CameroonKoreaLatinAmerica.
Since the 1992 Chapterthe General Administration gavepermission for the alienation of 29 houses for a total of more than US$20.000.000.It would be a real help if from the sale of these houses and propertiesin the developed continents some money would be fed to the Credit Unionso that it can be used to help those who have to buy or build new houses.
What can be done so that there is proper consultationin the Regionand that no decisions are taken too hastily and then regrettedafterwards?
3.2 Looking Ahead:
3.2.1 In the western world with its constantincrease of wealth in generalwe will have less revenue due to fewervocations within a falling birthrate. Like the population in generalOblates will live longer creating a larger non-earning group with increasinghealth and ageing costs. Only in some countries do we qualify for statepensions. Elsewhere we have to live from our own old age provisions.
3.2.2 In developing countries with a slower increaseof wealtha higher birthrate will favor more vocations. The securityprovided by religious life and church service will attract young people.Local revenues for religious will be low and even non-existent becausebishops will keep affluent parishes for their diocesan clergy.
3.2.3 For us Oblatesour most promising strategyis to continue with our Capital Sharing Program. Of course we risk dependingon investments and relying very little on our works. We will have to makea constant effort not to lose touch with the laity and the real world.
With lower revenues and higher expenses we will haveto pay close attention to our common property and cultivate a high levelof accountability through the proper ongoing training of treasurers andsharing information. We will need to improve our financial reports whichrepresents reliable consolidated information on all of our administrationsand communities; as well we need encourage a heightened sense of responsibilityfor our common property.
We will have to be creative in stimulating local incomeand in producing revenue from our real estate.
The development of the Congregation: 1850 - 1856
The Rev. Fr. Procurator General then made known theordinary sources of revenue of the General Treasury and the expenses thatwere obliged to be made annually. From this presentation it is clear thatthe resources of this account are far from being able to suffice for ordinaryneedsand still less to meet some eventuality for which it would howeverbe important to be ready.
Following this statementwhich showed that the Congregationwithout being in a position which must cause worryis nevertheless notwithout difficulties which hamper its action and prevent it from pursuingsome projects which it would be useful however to see realized.
[The Founder recommends the spirit of poverty]
[The institution of a reserve account]
After the Veni Sancte and the reading of the minutesthe following resolution resulting from the discussion which had takenplace at the preceding meeting was unanimously passed.
[Canons on book-keeping and Reserve Currency]
Canon 1. On the basis of the importance of theCongregation and the great expansion that it has takenthe General Chapterdecides that there will be formed in the General Treasury a reserve funddestined to facilitate the operations of the Administration and to dealwith eventualities which can arise. This capital must not be used forordinary expensesand must always be represented in the treasury in cashor in securities.
Sharing and mutual help with a family spirit
Letter to Msgr. GuiguesProvincial of CanadaJanuary201857
Letter to Fr. HonoratSuperior at BytownOctober91857
Letter to Msgr. GuiguesNovember 231860
Take it on yourself then to instill a bit more loveof the family into those who could be blamed for having let it grow cold."
OMI DOCUMENTATION is an unofficialpublication of the General Administration of the
Missionary Oblates of Mary Immaculate
C.P. 906100100 ROMA-AURELIOItaly
Fax: (39) 06 39 37 53 22