Last week I talked about whether your endowment should support new programs, that is be a vehicle for the future or support legacy programs, a bridge to the past or to the traditions of the church.
Judging from your emails, this resonated with a number of you. One of the themes seemed to be why I am opposed to heritage programs.
First, let me say I’m not. Traditions can and should be part of a church culture. We are heading into one of the most tradition-rich times in the church as we celebrate Advent and Christmas. And it’s one of my favorite times for that reason.
Endowment experts agree that operations should not be paid for by the endowment. If the congregation wants to keep an established program, they should be willing to make sure the offering plate is full enough to make it happen.
This is where the endowment can be critical. Let’s say you want to add a staff member. That can be an expensive addition to the budget all of a sudden, so for the first year the endowment may support 3/4 of the salary and other costs and the budget pays 1/4. The second year it is half and half and in the third year the endowment is only paying a quarter. By year four the endowment has moved onto another project and the staff expense is entirely in the budget.
This model lets the church not only ease into a major expense, but lets members (donors) get used to the idea of the new employee and see the value in it. Perhaps his or her presence will grow the congregation to the point where increased giving from new folks covers the cost in its entirety, but I would strongly caution you against this expectation.
If the endowment proceeds for the year are fully committed to an existing program, how can the church grow in its programs and staffing?
The other reason I am opposed to heritage funding through the endowment is that it protects an expense from scrutiny.
Imagine a church decades ago with an outstanding youth bell choir. A member leaves a significant endowment to provide for youth music ministry and for many years it is the best youth bell choir in the area. But in the ensuing years interest dwindles, kids are focused in other areas and what was once a grand program now includes three kids whose parents make them participate and the results are painful when they perform in worship.
Clearly it is time for this program to be re-evaluated. And if it was being paid for out of operating funds it probably would have happened.
it’s easy to say that the salary is being paid out of the endowment, so it really isn’t costing the church anything. But there is the opportunity cost. Every nickel spent on this program could have been spent somewhere else, somewhere more effective in supporting the mission of the church. Is there interest in a youth band or music for youth worship? How about a youth-led retreat to the Alive Fest?
Let’s stop using the endowment to fund programs that stopped being fruitful years ago and start planting new trees that will bear fruit far into the future.