By J.D. Long-García, jdlgarcia@catholicsun.org
July 3, 2008

More than 100 diocesan entities, including parishes, high schools and some missions, are now recognized as non-profit corporations, the result of an intensive restructuring process.

The Diocese of Phoenix announced in January that it would undertake a comprehensive restructuring process so that its civil organizational structure would reflect the canonical structure already in place. Church leaders began studying its feasibility about four years ago.

The articles of incorporation became effective July 1.

“The groundwork that had been done in education and communication really helped us have a smooth filing,” said Fr. Fred Adamson, vicar general and moderator of the Curia. “It hasn’t been too complicated at all.”

Before these new corporations were formed, all parishes, missions and schools within the diocese were part of one civil structure — a corporate sole, a legal entity consisting of a single incorporated office occupied by Bishop Thomas J. Olmsted. Now, each parish will go forward and operate as a separate, non-profit corporation, with the parish pastor serving not only as pastor, but as that corporation’s president and chief executive officer.

Under canon law, parishes have always been viewed as separate juridic persons, distinct in form and operation from that of the diocese. Because of that, little will change in day-to-day parish operations, according to diocesan officials.

While the filing of the articles of incorporation is a milestone, it is by no means the end.

“This is ongoing,” Fr. Adamson said. “You always have to ask yourself how you can make yourself better.”

Learning process

In 1911, the Sacred Congregation of the Council in Rome recommended that dioceses in the United States move away from the corporate sole model and embrace the concept of separate, non-profit religious parish corporations.

When the Phoenix Diocese was founded in 1969, however, the corporate sole model was still being widely used by many dioceses, including the Tucson Diocese, from which the local Church was created. Since that time, many dioceses across the country, including Tucson, have reorganized their organizational structure.

“Initially, I think because of all the distrust, there was a lot of resistance,” said Kathy Rhinehart, who deals with corporate matters for the Diocese of Tucson. “Once parishes realized this was actually helping them, they really liked it.”

The Tucson Diocese restructured its parishes after it filed for bankruptcy in 2005. Other dioceses have similarly reorganized their parishes, both within and outside of the context of bankruptcy.

“It’s been a learning process and each year has been better and better,” Rhinehart said. “It’s been really good.”

The Archdiocese of Detroit has also been undergoing a comprehensive restructuring over the past year, switching from a corporate sole model to separately incorporated non-profits.

Like the Phoenix Diocese, the Archdiocese of Detroit’s decision to restructure has not been motivated by any bankruptcy or financial struggles. Instead, according to the archdiocese’s Web site, “Creating non-profit parish corporations is the simplest and most effective way of ensuring that the rights of parishes regarding Church property are respected not only in Church law, but also in civil law.”

“From day one, we have made it clear that our decision to incorporate our parishes was guided by our desire to affirm the separate juridic status of those parishes — to establish a civil identity for them which is consistent with their canonical identity,” said John Kelly, general counsel for the Phoenix Diocese. “The fact that separate incorporation may assist parishes in managing their risk and in protecting their assets from attachment for liabilities created by others is a welcome, but secondary benefit.”

Anna Thompson, who works with Kelly and has been helping parishes throughout the incorporation process, was grateful for the cooperation from pastors and parish employees.

“Everybody has been very positive, very helpful,” she said. Thompson has kept a tab on parishes, making sure paperwork was accurate and filed on time.

“The filing aspect has been the easiest part,” Thompson said. “There’s a lot left to be done.”

Over the next couple months, the diocesan officials will be preparing by-laws, service agreements, corporate resolutions, corporate minutes, and corporate record books to be used during the initial organizational meetings of the parish and other corporations in September and thereafter.

“What it will continue to be, as we’ve seen in all our meetings, is a collaboration,” Fr. Adamson said.

The parish corporations will also create and adopt corporate resolutions before the September meetings.

Restructuring Manual

Restructuring Manual for High Schools

	View Introduction Video by Bishop Olmsted <here>

Restructuring Talks Video
St Paul Church January 29, 2008

Due to the lenght of the full video, we have it parsed into 7 chapters about 10 min long each. To watch the videos starting with chapter one,
click here

FULL VIDEO
Click <here> to view video of Restructuring Talk given at St Paul. The video is over 1 hour in length and will take several minutes to download. Not recommended for dial-up connections.