[This is 23rd of 25 factors that may impact the survivability and vitality of your congregation. A new factor is being posted each weekday for five weeks. See all the posts at www.BullardJournal.org. Order the whole collection at http://congregationexistpersonal.eventbrite.com/.]
Your congregation is more likely to exist ten years from now if it has no dependence on endowment funds. It is uncertain or marginal if it has some dependence on endowment funds. It is less likely to exist with vitality and vibrancy ten years from now if it has a large amount of dependence on endowment funds.
Endowment funds may develop out of a proactive funding strategy of a congregation over a number of years. They can also develop from an unexpected source making a large one time financial contribution, one or more persons who leave significant funds to the congregation through their will or trust funds, or a combination of both of these.
Congregations who have no dependence on endowment funds generally have the capacity to raise appropriate funds annually to support their life and ministry. While they may have various reserve funds, including endowment funds, they are not dependent on these for typical operations. These funds are used primarily for special one-time projects or for ancillary programs and ministries of the congregation. They maintain an assertive stewardship or generosity strategy that maintains high ownership throughout the congregation for the need to sacrificially provide financial resources for the work of the congregation. Often reserve and endowment funds are continuing to grow.
When congregations begin using endowment funds for current operations they begin a pattern they may find hard to break once they become dependent on the funding for what they now call essential programs, ministries, and activities. Congregations may be safe financially if less than 20 percent of their annual income comes from reserve funds of various types. At the same time, they will probably diminish their deep commitment to providing financial resources for the congregation. It can be a promising situation if the corpus or principle remains untouched, and if the fund balance of the endowment is still growing.
When 30 or more percent of a congregation’s current operations comes from endowment funds then it is in danger of not existing with vitality and vibrancy within ten years. The generosity factor in the congregation diminishes, especially if the endowment funds are large and the typical congregational member or attendee sees years of prosperity from the endowment funds. These congregations are often borrowing against the principal of the endowment funds. They are mortgaging their future and risk becoming a shell of itself or reaching a point of bankruptcy or severe cut back actions in order to survive. Major unexpected maintenance or repair can threaten the financial stability of these congregations. Also the loss of members by transfer or death can create an unhealthy and dangerous dependence on endowment funds.
What is the endowment dependence situation of your congregation? Are they empowering, controlling, or dysfunctional? Please leave a comment and participate in the dialogue.
Copyright 2009, George W. Bullard, Jr. at GBullard@TheColumbiaPartnership.org.
