(Originally appeared in Forbes Magazine on March 9th, 2016. By Susan Adams)
In late 2013, when Rev. Frank J. Caggiano became the Fifth Bishop of Bridgeport, CT, he took over a diocese with 82 parishes, 38 schools and 410,000 Catholics, who make up 45% of the population. He also inherited almost $22 million in debt that had been racked up by the schools, even though the diocese, which covers most of Fairfield County, includes some of the world’s wealthiest enclaves, housing a disproportionate number of billionaires and hedge fund titans. In this condensed and edited interview, Bishop Caggiano talks about out how he’s attempting to bring an entrepreneurial approach to solving his diocese’s problems.
Susan Adams: What challenges have you faced as Bishop of Bridgeport?
Frank Caggiano: There were three challenges I saw immediately. First there was the real need to reconnect with our people. If you want to use business language, you could call them our customers.
Adams: Do you have hedge fund managers and billionaires in your parish?
Caggiano: Yes, absolutely.
Caggiano: They have been extremely generous to the diocese but among the very affluent you have the same problem of people not practicing their faith. We only have 20% of baptized Catholics coming to our regular worship.
Adams: What were the other challenges?
Caggiano: The second challenge had to do with the leadership of the diocese. I mean the pastors, priests and deacons, and our Catholic school administrators and advisory boards. I sensed they were a bit uncomfortable with being change agents, with thinking outside the box, or looking outside the parish.
Adams: What’s the third challenge?
Caggiano: We need our lay leaders, some of whom lead some of the largest corporations in the country, to assist in addressing the financial difficulties we have experienced, and to bring us their best business practices in human resources, communications, technology, social media. Along with the $22 million we owe, we’re accumulating $2 million a year in interest payments.
Adams: How are you tackling the mounting debt?
Caggiano: We have an annual Catholic appeal where we ask people to support the mission of the diocese. Last year they gave $11.5 million. Then we have an assessment: Roughly 15% of all money donated to parishes on Sundays goes to help run the administrative portion of the diocese like the central offices.
Adams: How much does the assessment bring in per year?
Caggiano: About $6.3 million. We do raise money in other ways including bequests and donations from affiliate organizations. But the diocese runs a deficit.
Adams: What are your ideas for lowering the deficit?
Caggiano: We can learn from the corporate world. We have to be open, transparent and financially accountable. We need to use the best and most accepted business practices, from how we are audited, to how we present our financials, to how we use lay leadership to advise and consult on all of our financial concerns. We need to assemble and publish all data for each parish, and we need to set goals and hold ourselves accountable to achieve them. In the Catholic Church that’s a whole new way of doing things.
Adams: How are you getting lapsed Catholics to come to church?
Caggiano: In September we had a Synod, where you engage the leadership at every level. That means a leader from every parish, every school, every religious congregation. We had 400 members, including 350 lay leaders. We asked, how do we engage the 80% who aren’t engaged and how do we get the 20% more fully involved.
Adams: What did you come up with?
Caggiano: First we need to evangelize. We also want people who come to church to see it as a collegial, collaborative enterprise where everyone, whether clerics or laity, works together to achieve a common initiative. We’re also creating a leadership institute. Clergy and lay leaders will have an opportunity for the first time in our diocese to have the latest training whether in business skills, public relations, business practices, communications or social media.
Adams: Who’s going to teach those skills at the institute?
Caggiano: Some of the people will be from the business and corporate world, some from the marketing world, and I’m hoping a lot of millennials who have made their careers exploring the social media world.
Adams: Who’s going to pay for their services?
Caggiano: I believe you need to spend money to make money. But there are also an enormous number of Catholic faithful who will do this gratis. This is going to be an institute without walls. The teaching can be done in person, communally, and online.
Adams: How will that address the school debt?
Caggiano: Catholic schools need to become financially self-sufficient. Since Catholic schools started charging tuition in the mid ‘60s, they’ve had a model that says tuition is $X. When I went to school it was $20 a month. I was the first grade that paid tuition at all. The teachers were religious so there were no salaries. Now 85% of a school’s budget is salary. We have lay teachers who are great at what they do but they need to have a living wage. Right now the average tuition is $6,000 per student in our elementary school. When you consider that the average Catholic family has more than one child, that becomes a huge financial challenge.
Adams: What’s the solution?
Caggiano: We need a transformation. I call it the JetBlue experience. When the airline was founded, its financial model was to fill every seat, which they would do by discounting at the last minutes. Private college charges can be as high as $65,000 including room and board But very few families pay that much. We need a collegiate model where parents show their financials and have their tuition adjusted according to their ability to pay.
Adams: How is that like JetBlue?
Caggiano: If you consider that each seat in our schools is worth $5,000, that’s a half million dollars of revenue we’ve lost. Since there’s a fixed cost to the seat, whatever revenue we can generate, filling the seats at a discount the way JetBlue did, would be to our advantage. We’d use individual financial aid to do that.
Adams: Don’t Catholic schools give aid to needy students now?
Caggiano: Yes but aid is given as a block. We need to establish an individual relationship with every “customer” coming to the school. There could be tuition payments that are deferred. For us that’s revolutionary.
Adams: Will you simply have an annual appeal?
Caggiano: I have created a new group called Foundations in Education. Its initial trustees are individuals who believe in the value of Catholic education. I’m asking them to raise money and to give grants to those schools that wish to innovate in their curriculum.
Adams: What kind of innovation are you talking about?
Caggiano: The Jesuits have a model where high schools partner with corporations. Students go to school four days a week and on the fifth day they apprentice in a company and learn business from the inside out, and corporations give money to the schools.
Adams: How are you going to connect with millennials?
Caggiano: We’re going to create a Catholic Service Corp., modeled on the Peace Corp. Each chapter will have youth leadership and it will use social media to communicate and identify what’s important to them. They will partner with religious and non-religious organizations like Habitat for Humanity. We have a number of parishes that send young people to Appalachia to build homes and we have young people who go to nursing homes to spend time with the elderly on the weekends. My experience with millennials is they are hesitant to get involved with organized religion but they are still generous and they want to make a difference in the world.
Adams: How will you use social media?
Caggiano: A year ago I had the good fortune to hire John Grosso, who is 24 years old. He has reinvigorated our social media strategy. We have active sites on Facebook, Twitter, Instagram and YouTube.
Adams: Have you had any social media successes so far?
Caggiano: For World Youth Day in July we’re going on a pilgrimage to Krakow, Poland, where we’re going to visit with Pope Francis, who will be there. After we posted a message about the trip on Twitter, we went from 50 people to 300 in two weeks. Our youth choir had a Christmas concert. After we posted about it, we went from 300 people registered to 1,000 in four days.
Adams: Do you personally use any social media platforms?
Caggiano: Yes, I maintain a Facebook page and a Twitter account. I do weekly two-and-a-half-minute reflections that we post through Facebook and we Tweet out. I have 5,000 Facebook followers. For my Good Friday post last year, we estimate we had 60,000 readers. That’s the biggest congregation I’ve ever interacted with in my entire life!
Adams: Has it been tricky for the church to be active on social media at a time when the movie “Spotlight” won the best picture Oscar?
Caggiano: Surprisingly, we haven’t gotten any pushback on that from social media. The Vatican has come out with a statement saying the movie is not anti-Catholic at all.
Adams: Do the sexual abuse scandals in the church make it tougher to do your job?
Caggiano: Many people were hurt and trust in the leadership was harmed. The church has now created environments that are truly safe for young people. Rebuilding trust takes a long time.
Adams: You’ve said that there are some leaders in the diocese who are reluctant to be change agents. Can you give an example of a change they have been reluctant to try?
Caggiano: Most of our pastors have no business training so they initially resist our ideas. Like our planning process, where we involve parishioners in doing a strategic plan for the parish, including creating metrics and holding people accountable to goals and objectives—for some pastors that is completely out of their experience.
Adams: What can you do when leaders in your diocese are resistant to change? Can you fire them?
Caggiano: You’re a pastor for life. You can’t be fired. This Saturday at 9 o’clock we’re going to have our first session in pastoral planning to create a strategic plan for each parish. Even with the training, for some it’s going to be a bit hard.
Adams: Do you worry that taking an entrepreneurial approach to the church’s issues will be seen as crass or not appropriate for a religious institution?
Caggiano: As a church we need to adopt and adapt. We have a lot to learn from the corporate world but we have to adapt what we learn because we are not a business like any other business. Our product is intangible. It’s the gift of giving someone faith in the person of Jesus Christ. We offer a relationship with Jesus. That is a unique sell, if I can put it that way.