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As Buffalo Diocese bankruptcy looms, Catholic Charities seeks $10M

Bishop Edward B. Scharfenberger sought to assure donors that gifts to this year’s Catholic Charities appeal will be used for services and programs to benefit the needy, even as he acknowledged the Buffalo Diocese could pursue Chapter 11 bankruptcy protection to settle more than 225 Child Victims Act lawsuits that have been filed against it since August.

Catholic Charities officials on Tuesday set a fundraising target of $10 million – about $500,000 more than they raised last year.

A Chapter 11 filing would trigger an intense analysis of the diocese’s assets to determine what could be used to pay settlements.

Catholic Charities is separately incorporated from the Buffalo Diocese, which means its assets would not be in play.

But each year, the diocese takes a portion of the Catholic Charities appeals and uses it for its own operations. Historically, about $35 of every $100 raised in the appeal goes into the Fund for the Faith, which is controlled by the diocese and is used for ministries such as diocese communications, seminary training and campus ministry.

Last year, the appeal included a change that allowed donors for the first time to choose between three designations of giving. They could continue to have their gift split between Catholic Charities and the diocese’s Fund for the Faith, or they could choose to have 100% of their gift go to Catholic Charities or 100% to the Fund for the Faith.

The same options will be in place for this year’s appeal, which runs through June 30.

Even if the diocese does file for bankruptcy, contributions to the 2020 appeal would not be affected because a reorganization would take years to complete, said Scharfenberger.

“All of the money that we are collecting is going toward immediate goals. We’re not talking about years down the line. We’re talking about right now. They are immediate and must be met, so we continue the campaign to meet those goals,” Scharfenberger said.

The Catholic Charities appeal suffered last year as a clergy sexual abuse crisis ensnared the diocese and led to the resignation of Bishop Richard J. Malone. The appeal finished more than $1.5 million short of the agency’s $11 million goal in 2019.

But Scharfenberger said it was incumbent on the church to raise the money and help people.

Catholic Charities provides programs and services annually to more than 150,000 people in need in the eight counties of Western New York.

“This is essential to the mission of our church. We’re going to do this, no matter what the challenges are. We recognize there’s going to be ups and downs and we’re going to be realistic,” he said. “Ten million dollars will be more realistic under the circumstances. The last thing we want to do is in any way to curtail the services because the needs are real.”

Catholic Charities will conduct this year’s appeal with a new leader of the agency, Steve Schumer, a Catholic deacon who took the helm earlier this month as president and chief executive officer. Schumer, a former M&T Bank executive, replaced Dennis C. Walczyk, who retired after serving as CEO since 2003.

Schumer said he was confident that last year’s shortfall was a “stumble” and that area Catholics were looking for ways to help people.

He also said a bankruptcy wouldn’t interfere with donor’s intentions to aid those in need.

“These are funds that are designated for a particular purpose, to help people in organized ministries, both for the Fund for the Faith and for Catholic Charities,” said Schumer. “All this money is designated to help people. Is it possible the bankruptcy court could intervene into that? I guess it’s possible, but it’s highly unlikely. My understanding of the law is donor designated funds are donor designated. So, I tell people, in all honesty, yes, contribute your resources, and we’ll put them to work in the way you intend.”

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