Sponsorship at the Crossroads

SPECIAL SECTION

SPONSORSHIP AT THE CROSSROADS

inding a discussion of Catholic health care Civil law is inclined to use words such as in which the word sponsorship is not used Relijjious "owner," "ownership," and "'shareholder." How is nowadays almost impossible. Un did sponsorship become such a common part of fortunately, the term has evolved over the Institutes the U.S. Catholic vocabulary concerning health last 30 years into a catchall phrase that too care? What arc the canonical implications? ofteFn tries to catch too much. As a result, spoil Sponsorship is neither a canonical nor a civil soi ship is sometimes understood to mean some Must legal term in regard to the ownership of the tem thing that it actually does not. poral assets of a Catholic health care facility. No Some promoters of sponsorship in Catholic category of canonical temporal goods called health care understand it to mean ownership. Consider the sponsorship exists; and in the canons on baptism Others understand it to mean, not ownership, and confirmation, the word "sponsor" docs not but rather an influence, whether vestigial or transfer well by analogy to Hook Hive of the 1983 extensive, on the health care institution in ques Direction in Code of Canon Law, which covers the temporal tion. A recent solid, practical definition says: goods of the church. To accept sponsorship Which Tljey responsibility for a person entering the Catholic Sponsorship is a reservation of canonical faith is not the same reality as to claim ownership control by the juridic person that founded or sponsorship of a Catholic health care facility. and/or sustains an incorporated apostolate Will Go that remains canonically a part of the HISTORY OF THE TERM church entity. This retention of control Rev. John J. McGrath's controversial 1968 work. need not be such as to create civil law liabil BY REV. DANIEL C. Catholic Institutions in the United States: ity on the part of the sponsor for corporate CONLIN, JCD < 'anonical and Civil Law Status, used the acts or omissions but should be enough for phrase "sponsoring body."- Fr. McGrath the canonical stew aids of the sponsoring believed that a Catholic hospital became a public organization to meet their canonical obli trust when the religious institute reorganized the gations of faith and administration regard board of trustees of the hospital from m all reli ing the activities of the incorporated apos gious board to a predominantly lay board. For Fr. tolate.1 McGrath, this reorganization changed the reli gious institute from canonical owner to canonical Canon law defines ecclesiastical goods as being sponsor, a move akin to surrendering parental those goods belonging to public juridic persons. status in favor of godparent status. What came to be known as the "McGrath thesis" had wide canonical and civil legal influence in Catholic health care and educational circles.' Cardinal Adam Maida, who in 1974 was legal Fr. Conliu, who received his counsel for the Diocese of Pittsburgh, used the doctorate in canon law from phrase "sponsoring body" in a Hospital Progress Angelicum College, Rome, is article in February of that year. Without specifi pastor of St. Columba's Church, cally mentioning the McGrath thesis, Cardinal Muuicapolis. Maida disagreed with it, arguing that even lay

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trustees must recognize that "the hospital apos complicate the sponsorship question. Frequent tolate is an exercise of ministry within the mergers and acquisitions often make it difficult Church, an exercise of religion."4 Cardinal for sponsors to solidify' their Catholic identity. Maida's reaction to the McGrath thesis formed in I would argue that sponsoring .\n entity that the 1970s an interesting canonical debate, whose you do not own is difficult. On the other hand, if effects are still with US today. (The sale in 1997 of you do own a health care facility, that fact need Saint Louis University Hospital to a for-profit not necessarily imply the conclusion that you also corporation provoked a debate along the lines of sponsor the ministry conducted within your facil the McGrath-Maida model.) ity. Put differently, sponsorship is certainly not The Catholic Health Association's first official the same as ownership, and ownership need not use of the term "sponsorship" occurred in a 1969 imply sponsorship. booklet called Study of the Future Role of One an always own a health care facility and Health Care Facilities under Catholic Auspices yet have no sponsorship role within it. By the in the United States. The first appearance in same token, sponsorship need not imply owner Hospital Progress of "sponsorship" (as opposed ship. A facility sponsored by one religious insti to Cardinal Maida's phrase, "sponsoring body"; tute may be owned by another, or by a group of appears to have been in January, 1975.s institutes, or by the diocese, or by a health care Because sponsorship is neither a canonically system. Any of these possible owners might have nor civilly recognized category in regard to the agreed to entrust the ministry of the facility to the ownership of public juridical or civilly corporate sponsorship of the religious institute. An owner assets, its definition in Catholic health care has owns and a sponsor sponsors. In these examples, tended to be somewhat nebulous. (The phrase ex Today some the owner and sponsor are distinct entities. nihilo would seem to apply to the fluid way Today some religious institutes prefer to spon "sponsorship" is sometimes used in religious religious sor a health care apostolate without owning it. institutes, dioceses, and boardrooms.) Because Owning such an organization necessitates a huge sponsorship is not a technical legal word in the institutes prefer investment of economic resources; trained, expc sense of having a precise meaning, it has become rienced, and highly motivated personnel; and a an umbrella word with multiple amorphous to sponsor a large long-term commitment of the institute's meanings. time and energy to a single ministry. Sponsorship What is noteworthy in the definition of sponsor health care can remove such limitations. A religious commu ship by Rev. Jordan Hite, TOR, JD, that I quoted nity can create a "win-win" situation by selling its earlier is the phrase "a reservation of canonical apostolate health care organization, on one hand, while con control by the juridic person." Notice that tinuing to sponsor it, on the other—meanwhile nowhere in this definition does the word "owner investing the proceeds of the sale. Such an insti ship" appear. As I will presently show, sponsorship without tute is now tree to prayerfully determine where it does not .md need not imply any canonical control might invest its personnel and resources in fidelity at all. Without canonical control, there can be no owning it. to its founding charism and its tradition as a reli ownership. Sponsorship, then, must mean some gious community. thing different than ownership. OWNERSHIP VERSUS SPONSORSHIP SPONSORSHIP NEEDS MORE EXPLICATION The conflict between ownership and sponsorship Rev. Michael D. Place, STD, has pointed out is similar to the decision facing automobile drivers: that religious communities and health care pro Will I buy or will I leaser Although I can eventually fessionals "have not been able to find a suitable buy the car I currently lease, 1 cannot, by the same theological explanation or description of sponsor token, lease from myself a car 1 own. Many reli ship."" The absent theological explanation has gious institutes lace a similar question: Should we been a problem. In recent years some religious own or sponsor our health care organization? Can institutes have turned their sponsorship responsi we do both? In my judgement, institutes have, in bilities over to lay groups—unfortunately, in some the replies they have made to these questions over cases, without first reaching a clear mutual under the last 30 years, been too cool to ownership and standing of what sponsorship means. However, too friendly about sponsorship. Fr. Place also suggests a possible solution to this One clear distinction between ownership and dilemma. "With this change in sponsorship," he sponsorship is that concerning an organization's writes, "the theological foundation will come administration. Owners may or may not be from the theology of baptism, not the theology involved in administration. Sponsors are always of religious life."" involved in it, although the extent of the Pressures from the external marketplace also involvement may be great or small, for example.

HEALTH PROGRESS JULY - AUGUST 2001 • 21 SPECIAL SECTION

I may, like many thousands of other people, itself has been institutionalized as the preferred own stock in the Microsoft corporation; but the way of speaking about the church's presence in chances are miniscule that I will be involved at the health care marketplace. all in administering and managing Microsoft. Even my right to be involved in administration RESERVED POWERS, OWNERSHIP, AND SPONSORSHIP and management via a shareholder's meeting The term "reserved powers" is the current way can be delegated to a proxy. A religious institute of describing, protecting, and even camouflaging as sponsor could never take such a lackadaisical church ownership/canonical control of its insti approach to administering .\n apostolate. tutional apostolates. Under this arrangement, a Granted, one might simultaneously be an owner public juridic person —usually represented by a of stock in, and an administrator of, the same board —exercises a sponsored organization's corporation. However, ownership need not reserved powers, while another board—the board imply administration. On the other hand, spon of trustees—exercises the organization's ordinary sorship, which need not imply ownership, elites administrative powers. Such a structure may by definition imply at least some aspects of sound unwieldy. In fact, the same people usually administration. occupy seats on both the public juridic person's Sponsorship and ownership differ in other board and the board of trustees. ways. A sponsor, tor example, may well provide Over the years, the sponsors of Catholic its sponsored organization with funds or a public- health care facilities and educational institutions relations presence. In fact, a sponsor will want Sponsorship, have essentially honed their reserved powers the various constituencies of its health care facility down to five. According to a CHA booklet enti to know that the sponsor is involved in the facili tled The Search for Identity: Canonical ty's mission. An owner, on the other hand, may which need Sponsorship of Catholic Health Care, sponsors choose to be quite hidden and behind the scenes, typically reserve for themselves the right "1.) to a kind of anonymous presence. Indeed, an owner not imply establish the philosophy according to which the might have strategic reasons for camouflaging its corporation operates, 2.) to amend the corpo ownership interests. For example, a for-profit ownership, rate charter and bylaws, 3.) to appoint or to pharmaceutical corporation that had purchased a approve the appointment of the board of not-for-profit hospital might want to avoid publi does by trustees, 4.) to lease, sell, or encumber corpo cizing that fact, lest it raise civic eyebrows. If, on rate real estate in excess of the approved sum, the other hand, such a company were to sponsor •\\u\ 5.) to merge or dissolve the corporation."' a hospital without owning it, that could be a god definition One should note that the five commonly recog send for both the hospital and the civic commu nized reserved powers appear to have clear roots nity. imply at least in canon law.* Ownership implies control, whether the con Sponsorship indicates ownership when it refers trol is total or undertaken by a majority or large some aspects of to canonical control as such control is expressed minority of stockholders. Sponsorship suggests in certain reserved powers. Put differently, canon administration or contributed human and finan administration. ical control must be clearly manifested in at least cial resources or a kind of public seal of endorse some of the reserved powers if sponsorship is to ment. Ownership ends with an organization's be understood as ownership. sale, merger with another, or simple closing. An understanding of sponsorship based on Sponsorship, on the other hand, ends with the reserved powers does not mean that women or conclusion or termination of the sponsor's con men religious must serve in the sponsored organi tract with the sponsored organization. zation's administration or on its staff. It does not Owners, moreover, have full control of what mean that an institute must make a financial con they own, subject, of course, to civil, canonical, tribution to the organization it sponsors. Rather, and ethical codes. Sponsors have control only to sponsorship means that the institute (or any the extent that such control has been delegated by other public juridic person i carries out its gover the owner Sponsors help carry out and maintain nance responsibilities through the reservation of the mission of the owner, but the sponsor need some powers that give the sponsor exclusive not be the owner. A sponsor may be, rather than canonical control over certain kev areas of the an organization's owner, the mediator, facilitator, organization sponsored. or translator of its charism, tradition, ,\\u\ mission. This kind of power ought to be explicit and In the United States over the last three clear, and this canonical control ought to be rec decades, ownership of Catholic health care insti ognized in civil law. Hut the absence of" such unions has frequently been reduced to sponsor recognition in civil law does not change the fact ship of those institutions. As a result, sponsorship that, in canon law, a public juridic person does

22 • JULY - AUGUST 2001 HEALTH PROGRESS EMPLOYEE SATISFACTION ('ununited from pajje 7

ship and mission services at CHA (the canonically own its apostolate. The name: CHA was then the Catholic Hospital senior staff person responsible tor this reserved powers fix and focus the own Association.) project), asked her colleagues to draw ership of the health care institution in For further discussion of the "McGrath three concentric circles. She asked them thesis," see Alice Gallin, Independence to write action on the inside circle, the canonical juridic person. and the New Partnership in Catholic Higher Education, Notre Dame University infrastructure in the second circle, and THE GREAT CHALLENGE Press, South Bend, IN. 1996. and culture in the outside circle (see illustra When Catholic hospitals were found Negotiating Identity: Catholic Higher tion on p. 7). She then pointed out that Education since 1960, Notre Dame ed, there was a fusion between the hos both the data gathering and the exter University Press, South Bend. IN. 2000: nal research associated with this study pitals .md their founders. Then, in the William W. Bassett. "The American Civil 1960s and 1970s, a distinction was Corporation, the "Incorporation Move had shown that the establishment of an made between the founders and their ment,' and the Canon Law of the Catholic organizational vision of promoting the hospitals, largely because of the Church," Journal of College and University dignity of the workforce through, for Law, Spring 1999, pp. 721-750: and Robert "McGrath thesis." In the 1980s and example, promoting satisfaction with T. Kennedy, "McGrath, Maida, Michiels: its involvement in decision making, 1990s the dominant trend was the sep Introduction to a Study of the Canonical aration of the hospitals from their and Civil Law Status of Church-Related could not be achieved without creating founders. Catholic hospitals, most of Institutions in the United States," Jurist, specific and measurable strategies. Over which were a phenomenon brought vol. 50, pp. 351-401, especially 351-368. time the successful implementation of into existence by institutes of women 4. Adam Maida, "Identity of the Catholic such strategies is what creates the Health Facility." Hospital Progress. religious, are today witnessing the desired culture of worker satisfaction. February 1974. p. 65. evaporation of such congregations The important part of the study, then, 5. Paul Boyle, "Sponsorship: Canonical and is in what each of our organizations can from institutional Catholic health care. Social Obligations." Hospital Progress, learn from the drivers that surfaced. Thus the great canonical challenge January 1975, pp. 54-56. Some organizations may find that some and question is: Who will become the 6. Michael Place, "Elements of Theological drivers have no particular relevance for next generation of Catholic health cue Foundations of Sponsorship," Health Progress, November-December 2000, p. them; no organization should simply owners? Sponsorship is now slowly 9. adopt a driver without first adapting to shifting from religious institutes to lay 7. Place, p. 10. its needs. In general, though, an orga groups. How will the eventual owner 8. Catholic Health Association, The Search nization that has no successful strate ship change be managed? for Identity: Canonical Sponsorship of gies will have a weak or low level of The future of the Catholic health Catholic Health Care. St. Louis. 1993. p. 81. worker satisfaction. Although the good care ministry in the United States news of our study is that Catholic 9. Canon 298. sec. 1, could serve as a root appears bright. Now is the time to health care is long on vision, the bad ensure that the bright promise becomes for the first reserved power ("establish the philosophy"). Canon 94 would anchor the news is that, in general, it is short on reality. D second ("amend the charter"). The canons effective strategies for promoting work concerning administrators (e.g.. cc. 492- er satisfaction. 494; 532; 562; 636; 638; 1232, sec. 2; 1279. and 1282-1289) appear to anchor As I write this, I do so acutely the third ("approve the board"). Reserved powers four ("sell real estate") and five aware of the very real impediments to ("dissolve the corporation") seem to be our achieving what we would like to rooted in canons 1290-1298 and canons accomplish. My own experience, NOTES 121-123 and 320 respectively. however, has taught me that the criti Rev. Francis Morrisey. OMI. JCD. PhD, a cal difference is in the amount of time 1. Jordan Hite. A Primer on Public and well-known canonist (see his article, pp. 28- dedicated to establishing, implement Private Juridic Persons: Applications to 31. 51 of this issue), lists eight reserved the Catholic Health Care Ministry, Catholic powers, including those to establish sub ing, and evaluating potential strate Health Association. St. Louis. 2000. p. 37. sidiary corporations, designate the spon gies. As one wise colleague told me, 2. John J. McGrath. Catholic Institutions in sored organization's the chief executive "if you [CKO and senior executives] the United States: Canonical and Civil Law officer and some or all of its board of put as much energy into staff issues as Status. Catholic University Press. trustees, and appoint its auditor. See product issues, you could change an Washington. DC. 1968. Francis Morrisey. "Basic Concepts and 3. See Paul C. Reinert. "The Role of Re Principles." in Lawrence DiNardo. Kevin E. organization's culture." Another col ligious in Management." Hospital McKenna. and Joseph W. Pokusa. eds.. league put this belief a bit differently Progress. September 1967. pp. 59-61, 96- Church Finance Handbook. Canon Law by suggesting that we have a respon 100. Fr. Reinert. a Jesuit, was then the Society of America, Washington, DC. 1999. sibility to minister not just to our president of Saint Louis University. In this pp. 3-15, especially p. 14. Fr. Morrisey patients, but also to our coworkers. article, adapted from a speech he had holds that "the notion of reservation is given two months earlier to the annual found in canon 87. sec. 1, and in other Our colleagues are the subjects of a CHA assembly. Fr. Reinert essentially canons throughout the code." However, ministry that will be only words, not endorsed Fr. McGrath's position in the canons 94 and 1279. sec. 1. would seem a reality, without effective mediating debate. Fr. McGrath himself addressed to provide a firmer grounding in issues con structures. D the 1968 CHA assembly. (Hospital cerning the ecclesiastical goods of civilly Progress was Health Progress's previous incorporated apostolates.

HEALTH PROGRESS JULY - AUGUST 2001 • 23 JOURNAL OF THE CATHOLIC HEALTH ASSOCIATION OF THE UNITED STATES www.chausa.org

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