Budget shortfalls hit Catholic Charities

Wednesday, May 26, 2004 | 10:34 a.m.

When Monsignor Patrick Leary took over as executive director of Catholic Charities of Southern Nevada in February 2003, he told the department directors for the 63-year-old nonprofit organization, "We are in deep soup."

Facing heavy losses from the free meals the agency serves in its dining room and from the 460 beds it provides to the homeless at a nominal fee, the agency faced a $500,000 budget shortfall for fiscal year 2004.

However, through imaginative fund-raising, a hiring freeze and a bit of luck -- when Binion's Horseshoe closed it donated hundreds of pounds of non-perishable food from its kitchens to the organization -- it survived and even has $443,000 in opening funds for fiscal 2005, which begins July 1.

The bad news is that the $15 million budget for the upcoming fiscal year again has a $500,000 projected shortfall. With a demand on social services 40 percent greater than last year, the agency faces a tough challenge.

"I'm optimistic we are going to make it because I believe people will respond to our needs," said Leary, who has an applied economics degree from the University of San Francisco and has been on the Catholic Charities board since 1991, helping the agency through many tough economic struggles.

But the charity at 1501 Las Vegas Blvd. North, now has an added wrinkle that, from a public relations standpoint, may hurt the agency's efforts to climb out of its financial pit.

The agency's chaplain, the Rev. John McShane, who has been critical of how Catholic Charities operates, is being reassigned July 1 by Bishop Joseph Pepe to either Caliente or Tonopah. The public's perception could be that McShane's criticisms of the agency played a role in his ouster.

McShane, who is not a Catholic Charities employee but rather serves the bishop's office in his role as chaplain, said he is "not a troublemaker," but he feels he needs to remain "a voice for the little people."

"I just don't want Catholic Charities to be so business-oriented that it loses the essence of its charitable work," said McShane, who is highly respected by local homeless advocates for his work with the poor, as well as for his local prison ministry and pro-life ministry.

McShane, who has served in Tonopah, Laughlin and Virginia City during his lengthy career, says he is offering the bishop a proposal that he could split his time between Caliente and Las Vegas to continue his work here.

Pepe was out of town and could not be reached for comment, his office said.

Among McShane's complaints about Catholic Charities is that the agency discontinued its free shelter for the homeless and now charges $7 for homeless men who are not in one of Catholic Charities' life-improvement programs. Those in a Catholic Charities program only pay the $7 fee on days they have worked, earning the money to cover the cost.

Leary, who despite being the agency's top man does not supervise McShane, said in some ways his philosophy does not differ much from McShane's.

"It is a matter of Gospel mandate that we care for the less fortunate -- that goes back to our very roots of feeding the hungry and providing shelter for the homeless." Leary said. "We are a compassionate charity.

"However, this also is a matter of good stewardship. Every dollar a person gives us is a dollar he will not spend on him or his family. They expect us to spend it wisely."

Leary said that despite the policy of charging for a shelter bed, people who are brought to the shelter on an emergency basis are not charged and regulars who don't always have the money are given a few free nights. Also, the $7 fee includes three meals and a shower, he said.

Leary said in facing such a huge deficit the agency can either cut its staff of 280, cut some of its services or raise more money to meet the shortfall. He says looking for additional funds is the road he will take.

The agency is lean, spending just 8 percent of its expenditures on staff, Leary said. It is not uncommon for some major nonprofits to spend upwards of 35 percent on administrative costs, he said.

Leary said the agency doesn't want to cut services. It prides itself on having never turned away a hungry person because of a lack of available food in its dining room since that service became a part of the agency in 1965.

Yet it is that dining room that in the next fiscal year will serve 1,700 to 2,000 meals a day at a cost to the agency of about $2.40 a platter, meaning a loss of about $1 million, the agency says. And even if most of the homeless clients pay $7 daily at the shelter, that portion of the organization's operation is projected to lose $227,657.

"We can't cut those programs because food and shelter are the very basis of our mission -- the reason why we are here," Leary said. "All we can do is reach out to the community on a larger scale."

That, he said, will be done through a campaign conducted pro bono by R&R Advertising that will include print ads and billboards about the agency.

Catholic Charities also plans to cut some of its administrative costs by going into partnerships with other agencies where Catholic Charities will provide building space in exchange for the other agencies running the programs.

The agency also plans to create a means to accept donations via its Web site. catholiccharities.com.

Leary says part of the reason Catholic Charities has found itself in a hole the past two years is the reduction in federal funding.

Last year, for example, the Department of Aging Services stopped a $30,000 grant. That could have resulted in 200 of the agency's clients being dropped from the Meals on Wheels program. However, the agency sent letters to area resorts and got the money to cover that loss and continue the service.

For the upcoming fiscal year, the agency will lose a $163,000 Housing and Urban Development grant. A plan has not yet been devised to cover that loss.

Contrary to what some believe, the agency does not receive any money from the collection plates passed at Catholic Church weekly services. That money helps the 23 parishes in the Las Vegas Diocese meet their own needs, including paying bills and building its facilities, Leary said.

However, in February, for the first time ever, Leary said, the parishes held a second collection on Ash Wednesday that raised $103,000 specifically for Catholic Charities. That same Ash Wednesday collection will be requested for February 2005, he said.

McShane says he believes the parishes can do a little more to help the charity because "there is no reason to think otherwise" that they would not want to further assist an organization with such close ties to their religion.

Leary said that the parishes hold individual events such as "April Foods" and "Faces of Hunger" that collect food for Catholic Charities' pantry that provides food baskets to poor families.

"The Catholic community has been very generous to Catholic Charities especially during holidays," Leary said. "I would be reluctant to ask more of the parishes."

Catholic Charities is not the only nonprofit agency to struggle to meet multimillion-dollar budgets. Charles Desiderio, spokesman for the Salvation Army, says it will have a $14 million budget that may face some challenges.

"Our under-construction Lied campus (at Owens Avenue and Main Street) is costing more to build than we projected and there are cost questions with rebuilding our Adult Rehabilitation Services building that burned last year," Desiderio said.

"With any budget you can make all the projections you want but it comes down to what you must spend and how much you have in your pocket to meet those costs."

The local Salvation Army has 350 shelter beds, 170 of which are free. The rest cost clients $4 a night, which includes meals and a shower.

Both Catholic Charities and Salvation Army officials say that in the wake of continued unprecedented growth they need to do much more than just keep even with prior years.

Leary noted that his agency's social service department last year saw 100 families per day and now helps 150 to 200 families a day with food baskets and other services. Desiderio said that 14 months ago the Salvation Army was seeing 100 families a day and now serves 200 families a day.

"We can no longer be in a position of holding our own as the population and demand for services increases," Leary said. "Sadly, we are seeing more and more working poor, younger people and younger families."

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