Plans made for fund distributions

By RENEE WEBB, Globe editor
Posted November 21, 2002

The first distributions of the Centennial Campaign For Excellence funds will be made in August, 2003.

"Distributions will be made to the schools and Catholic Charities. For multicultural ministries and faith formation in those the distributions will be used by diocesan offices to fund programs for parishes throughout the diocese," noted Julie Luft, controller of the Diocese of Sioux City.

Schools will receive a direct check to help fund teacher salaries. Catholic Charities will also receive a distribution for services they provide. Parishes will not receive a direct distribution, however, they will benefit from centennial campaign via diocesan programs that help to enrich the faith.

Currently, the centennial campaign has $1.79 million invested with a professional investment manager. Investment earnings earned on this amount will be distributed in August of 2003.

Luft stressed that while pledges of $14.3 million are significant and sincerely appreciated, not all of the money has been collected at this time.

With many of the pledges made on a five-year payment plan, the principal balance will raise each year and therefore the distributions should also increase yearly about 20 percent over that time frame. The distributions will be made in August on a yearly basis.

Royce Ranniger, director of operations for the diocese, added that in this initial year when distributions are made they would not have had even a full year of collections. In addition, campaign expenses of over $700,000 were paid out.

The governing boards of the centennial funds are the Corporate Board of the diocese and Catholic School Foundation Board. They have investment committees that will oversee the management of the funds. On an ongoing basis they will review the investment guidelines and also the performance of the current investment manager.

"The principal endowment is restricted. We can only pay out investment income," noted Luft. "In bad years if we do not make any money they may not receive a distribution."

With this in mind, Ranniger explained that in good years the governing boards of the centennial campaign funds may opt to distribute five to six percent of the money in a particular year even if eight percent earnings are achieved.

"This would give us a cushion for years when we do not have adequate earnings," he noted. "The investment guidelines have established a goal of five to six percent as an annual return. We can't guarantee that, but we have set that as a goal."

Wells Fargo Investment Services is currently managing the centennial funds for the diocese. The investment guidelines have been set very conservatively in that only 20 percent of the funds can be equities with the balance in fixed income investments in companies with a BBB rating or higher.

Pledge payments received during this fiscal year (July 1, 2002 to June 30, 2003) will be transferred into these investments in July of 2003. These payments will accumulate in a money market savings account until that point.

Another factor that will impact ultimately how much money the four areas will receive is the number of delinquent pledges.

In regard to the schools, Luft pointed out that the Centennial Campaign Executive Committee made the decision that the distributions would be made based on the number of teachers in each school. The FTE (full-time equivalency) will include part-time teachers.

"Along with the number of teachers, the amount of the distribution will be impacted by people that have donated to a specific school," she explained. "If an individual has designated their donation for a specific school and they have paid on the pledge, it will increase the amount going to a particular school."

Some schools had more money designated specifically to them than other schools. This will mean that even if two schools have the same number of teachers, the school with more money earmarked directly for them will receive more money.

According to Luft, the finance department of the diocese processed 2,000 pledge reminders in October and 4,000 will be processed this month because of the annual reminders.