Pros & Cons of Endowments

A recent article titled “Endowed Congregations: Pro and Con” written by the Alban Institute offers some useful insight on the role of endowments in parish life.

Based on the broad experience of the author, a church “consultant”, the full article is well worth exploring. The following is a brief summary:

Cons  — Problems with endowments

  1. Endowments are embarrassing for congregations.  -“Oh you’re the rich church.”
  2. Endowments are complicated and hard to manage. Generate complex financial decisions that may not fit the competencies of parish leaders.
  3. Endowments require fiscal accountability parishes often aren’t used to. Potential for misuse unless oversight is serious and consistent
  4. Endowments make giving go down. Endowments do make giving go down when clergy and parish leaders are not aggressive proponents and examples of stewardship. When stewardship is seen as a critical area of religious and spiritual life and the congregation’s leaders take leadership seriously, giving increases.
  5. Endowments raise questions of conflict of interest. – Endowments can make borderline expenditures easier and invite uncomfortable questions.
  6. Endowments mess up orderly budget processes. – “Well why don’t we just take it from the endowment”. The author identifies three competing strains of thought:
    • the “not-a-dime-for-operations-but-any-amount-for outreach”crowd  
    • the “Endowments-for-keeping-up-the-building” crowd.
    • the “endowment-exists-to-balance-the-budget”crowd.
  7. Endowments cause conflicts. Conflicts in values; between factions; over what the congregation ought to be about; about how to manage it and animosity. Creates power struggles.
  8. Endowments take attention away from mission. – Endowment becomes subject of all meetings.
  9. Endowments complicate relationships. “Bishops and executives seem to think of the congregation as a source of discretionary funds.”
  10. Endowments require new staff skills. – budgeting, financial mgt. conflict mgt
  11. Endowments can hide clergy incompetence. With large endowments clergy incompetence can be covered up or compensated for. Other staff people can be added, the losses of money can be covered, programs can be bought.

The author is, on balance, clearly in favor of endowments. He lists the following reasons to go ahead:

  1. Somebody trusted you. Somebody chose you to keep on caring about things they valued.
  2. Endowments witness to larger dimensions of stewardship. – Stewardship that goes beyond the checkbook -current income and outflow. “Endowments in a  congregation are an aid to help raise that question and teach people about ‘total stewardship.'”
  3. Endowments force the church to address a central task of spiritual nurture “Giving beyond our lifetime shines a flashlight on what we believe deserves ministry in the future.”
  4. Endowments make congregations face institutional stewardship.  “The presence of an endowment, forces a congregation continually to raise questions of how and where to throw its weight So long as one is struggling to make a survival budget, one can plead that there’s no time to think about anything but survival.”
  5. Endowments sometimes preserve the possibility of ministry. “Inner-city ministry has sometimes survived only because someone funded an endowment. There are places today that cannot survive without resources from past generations.”
  6. Endowments open doors to wider mission opportunities. “When asked what they had found to be the greatest value of their endowment, congregations  were almost unanimous in saying, “It strengthened our ability to conduct mission.”
  7. Endowments may help us through our current decline.  – “Turnarounds do not happen without new resources, new investments. We will need new initiatives, new institutions, new attempts to do the old things better.”
  8. Endowments feed the grass roots  — “Endowments tend to be local in situation. They can help feed the pioneering spirit of local initiative in mission and ministry.
  9. Endowments put us in touch with the spiritual problems of our nation and society –  “Even the poorest American is rich compared to those in other societies. And, those in churches are far richer than the others. Living with an endowment may make us more sensitive and able to minister to this central dilemma of each person and of our society-how to be a rich Christian.”
  10. An endowment calls you to deal with it, to live with it in faith. “It is a vocation to faithfulness, not simply a request for effective money management. It is much more difficult and challenging than simply being a responsible resource user.”

Other comments from the author.

  • The church and its members are called to major new areas of stewardship in the next generation, and endowments are one of the best means to move towards these frontiers.
  • The church tends to be like the one talent steward-fearful, burying talents in the earth. I believe it is called to receive and use all ten talents as a truly faithful steward. Endowments are part of this issue.
  • people of faith put together new resources and built the seminaries/churches we needed. Who knows what new things we need for the 21st century?
  • Most endowments are used with appalling lack of imagination.
  • every one of the reasons given against endowments can be addressed.
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