c. 2003 Religion News Service

(UNDATED) For the nation’s seminaries, there seem to be two key words relating to their immediate financial futures: economy and endowment.

At Union Theological Seminary, where the endowment has dropped in three and a half years from $79 million to $60 million, officials are in the midst of negotiations to lease three buildings to neighboring Columbia University in New York City. If the deal goes through, the school’s president will have to move across the street to new living space and the apartment of famous theologian Reinhold Niebuhr would be among the rooms available for Columbia’s use.

Those kinds of sacrifices just come with the realities of an endowment that, like many others, has shrunk during tough economic times.

“There’s no question that we had to convert some of our real assets into liquid assets,” said the Rev. Joseph C. Hough Jr., president of the nondenominational liberal seminary. “We’re going to launch a major campaign and we’re going to recover some of it. In the meantime, you’ve got to have income in order to flourish.”

Union has also found almost $1 million in budget cuts and has let some vacant staff and faculty positions remain unfilled.

Daniel Aleshire, executive director of the Association of Theological Schools, said the average seminary or divinity school gets one-third of its income from each of three sources _ tuition, grants and an endowment.

Those that are more dependent on their endowment are the ones that are more likely to be anticipating budget cuts in the next year, he said.

“There’s economic stress in these schools,” he said. “There’s not economic crisis in most of them.”

Gifts from individuals also have been affected by personal stock portfolios that have dropped significantly.

“Individual donors don’t feel as wealthy as they did three or four years ago,” said Aleshire, who is based in Pittsburgh. “Major gift people are waiting to make major gifts until their stock is of greater value than it is currently.”

Some schools will delay maintenance on facilities or cut new initiatives so they have enough money to at least sustain the salaries of their faculty and staff.

At Fuller Theological Seminary in Pasadena, Calif., officials are planning to cut $500,000 out of a $29 million budget. Their endowment dropped from $62 million to $57 million in a year and a half.

Pete Harkema, vice president for seminary advancement at Fuller, predicts some staff and administration layoffs as a result of the budget cuts.

But seminary officials maintain that despite the economic challenges, they remain hopeful about the future.

“It’s a tight time period, tight fiscally for us, but certainly I don’t feel like it’s caused undue pessimism here at Fuller,” said Harkema, who added the multidenominational evangelical seminary is in the midst of a promising capital campaign.

Compared to about a decade ago, Hough said, Union’s annual fund has almost doubled.

“About the time we started picking up in support, then we got whacked on the endowment side,” he said.

“I am guardedly optimistic about Union flourishing and flourishing well, but I will make no bones about it: It’s painful to see that endowment, which you worked so hard to raise, just slowly disappear.”

While schools like Fuller and Union do not gain support from a single affiliated denomination, Calvin Theological Seminary has found the Christian Reformed Church has helped it deal with a declining endowment.

“The denomination has generously and graciously increased their financial support to help us deal with the current market conditions,” said Dan Meindertsma, the new director of development at the seminary in Grand Rapids, Mich.

Aleshire said the current economic changes are hardly the biggest test of faith seminaries have had lately.

“They probably did a lot more soul-searching about what does our faith mean after Sept. 11 than they do with the current down economy,” he said. “Their faith is an underlying value that they bring to the table when they make those decisions about what to cut in stressed economic times.”

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