American seminaries and divinity schools across the theological spectrum are in financial trouble, according to news reports, open letters and blogs about budget cuts and staff layoffs.
Just as troubling is the silence from schools of theology about the state of their financial situation. For every one bad report, one must assume negative reports undelivered.
Here’s a summary of seminaries in financial crises:
Lexington Theological Seminary, a Disciples of Christ-affiliated school in Kentucky, declared a state of financial emergency in mid-January. The institution’s president reported that the endowment had shrunk from $25 million in July 2007 to $16 million and that faculty and staff would be laid off. He said the school would need to reinvent itself, focusing better on preparing students as church pastors and providing more online courses.
New Orleans Baptist Theological Seminary also announced in mid-January that the Southern Baptist Convention’s Cooperative Program funds, student tuition, gifts and investments would be over $1 million less than expected. The seminary president said he was taking a 10 percent reduction in salary, while faculty members would take a 5 percent cut. Employee medical benefits would be reduced.
Southern Baptist Theological Seminary announced in January the layoff of 35 administrative positions effective Jan. 30. That announcement came after the Louisville-located seminary had announced other budget cuts and staff freezes in December. The seminary’s total projected shortfall was $3.2 million.
Nine months ago, the seminary’s president blamed liberalism for the financial problems of mainline Protestant seminaries.
When Harvard University’s endowment dropped 22 percent last year, Harvard Divinity School became vulnerable to uncertainty since it relies on endowment for 71 percent of its operating budget. HDS said it was delaying new initiatives and reviewing other expense reductions, ranging from cutting back on food and refreshments at meetings to freezing salaries of faculty and exempt staff for [fiscal year 2010].
Southwestern Baptist Theological Seminary announced in mid-December budget cuts of between $3.5 and $4 million. The Ft. Worth, Texas, seminary suspended overseas travel and the work of its child care center, upon which faculty and students depended.
One SBC blogger wrote about the layoff of the seminary’s financial aid officer, the impending layoffs of professors and the elimination of employee retirement benefits.
Denver Seminary, an historic Conservative Baptist school, said it was cutting by 10 percent its non-personnel budget.
Gordon-Conwell Theological Seminary said in early December that it was facing an acute financial challenge with endowment funds having lost more than 20 percent in value. The drop in endowment and enrollment meant the school had a $1 million deficit. The Massachusetts-based, evangelical seminary said it was closing the school’s book center, suspending pension payments and reducing 15 staff positions.
A multi-denomination Protestant school founded in 1984, Salt Lake Theological Seminary announced at the end of October 2008 that the school was closing. The chair of the seminary’s trustee board said that the financial exigency facing the seminary makes closing the school the only responsible course of action to take at this time.
Colgate Rochester Crozer Divinity School disclosed in early October that the institution was experiencing financial stress. The school affiliated with the American Baptist Churches, U.S.A., said that it needed to reduce the percentage draw on the endowment which, for too many years, has been much too high. To accomplish that goal we are reducing non-compensation expenses by 10%. CRCDS claims Martin Luther King, Jr., and Walter Rauschenbusch as school luminaries.
General Theological Seminary reported last July that three of our Episcopal seminaries have undergone profound and historic changes, including the outright sale of property, radical downsizing of faculty and the suspension of core degree programs. The reasons are particular to each institution, but seminaries of virtually all denominations face similar challenges. Chief among these are increased fixed costs, over-reliance on a limited endowment, deferred maintenance, a decline in denominational support, and a decline in the ability of students to commit to a three-year residential program.
The open letter said that the seminary would be downsizing its staff and part-time faculty by at least seven positions. For the most part, these reductions will be achieved by attrition and retirements.
Nine months ago, Daniel Aleshire, executive director of the Association of Theological Schools, told the New York Times that 30 seminaries were in financial stress.
That number has surely increased exponentially since April 2008.
The loss of theological faculty, the reduction of faculty benefits, the decline of student services and the increase in tuition costs will remake American theological education. But how will it reshape seminaries and divinity schools?
Will it advance more theological conflict among seminaries or will it foster cooperation?
Will the financial crisis spark more creativity? Will seminaries and divinity schools offer more online courses? If so, how does technology affect the educational dynamic in the classroom and the ministerial network that emerges there, which is essential for clergy? Will church-based theological education initiatives find greater acceptance, albeit in the short term without accreditation?
Will the financial crisis break the logjam of apathy in churches about theological education? Will church members and churches value religious training enough to support productive institutions training clergy? Will seminaries sharpen their focus on preparing ministers for the local church as a way to build support in congregations?
Money and theology are inseparably bound with perhaps money now as the master of theological education.
Robert Parham is executive director of the Baptist Center for Ethics.