Creating a Commonwealth

Creating a Commonwealth

The History, Theology and Ethics of Church Endowments
James Hudnut-Beumler
Presented to the National Association of Endowed Presbyterian Churches
Chicago, Illinois, October 18, 1996

In tonight’s talk, I will address what I think is the latent, and sometimes explicit issue for all Christian institutions that gather, have and hold endowments. That issue is how and when it is legitimate for one part of the body of Christ to build up treasures where moth and rust doth corrupt. In my time with you this evening I will argue that it is vital to have a clear, theologically justifiable answer to the “purpose of your endowment” question. Throughout the talk, I’ll weave together historical, theological and ethical reflections upon where we are and how we might craft responses to the “purpose of endowment” challenge. But in the final analysis, I will end up arguing that the concept of commonwealth is the underlying answer toward which we should all be directed. For in the end, the holding of wealth by any part of the church is only justified if it benefits the common life of the body of Christ. In short, to those who are having a difficult time with their endowments, I will offer hope. To those who are too facile in their understandings of their blessings of riches, I will offer a challenge.

It is indeed curious that we have a special interest group of endowed Presbyterian churches. In the long course of Christian history most churches were endowed churches. To be sure, we have the New Testament era collections from voluntary offerings supporting the apostles, and communal sharing of incomes and personal wealth to make it possible for the gatherings of early Christians to support one another. Fairly quickly, however, and certainly by the time of Constantine, the organized holy catholic Church was financing the support of its ministry by what were, in effect, endowments. In the Western church for more than a millennium, a priest could not be ordained to the pastoral office without a benefice supporting that office. If that were still the practice then each of you who are ordained ministers would be entitled to the income from a piece of land and the service of its serfs that was inherited from the2 previous tenant of that pastoral office. Alternatively, if you had a rich daddy who wanted you to be a priest, your family could fix upon the church a gift adequate to your support for the rest of your natural life. In either case, the support of organized Christianity’s most costly expense, personnel, was accomplished by a capital investment. Poor relief might be accomplished by alms giving, and church building was typically financed by the gifts of regional nobility. Still normal church finance was endowment based. The pastoral office, with its entitlement to a benefice, or living from that office, was the customary assumption; the way things were. The clergy were a form of landed gentry.

Sometimes during those years, to be sure, this assumption clashed with other emergent ecclesiologies, beliefs and church practices. The greatest of these other ways of being Christian was the calling to assume voluntary poverty. The Spiritual Franciscans took this principle as far as they could. They read their Bibles to mean that the Christ who said, “do not worry about what you shall wear, consider the lilies of the valley” did not himself worry about such things—to the point he did not own the tunic that was divided among gamblers at his crucifixion. Christian discipleship for these spiritual Franciscans meant Christ-like behavior at all turns. They too needed to reject private property. Umberto Eco’s great novel The Name of the Rose has a scene in which the Franciscan’s leader is debating the Vatican’s apostolic delegate over just this matter. After days they haven’t gotten anywhere on the tunic issue, so the Vatican’s representative comes up with this compromise, “Well at least gentlemen, I think we can all agree that Christ had a purse.” The opposing world views within Christendom were so profoundly different, that the overarching church could not even comprehend how it could be different, or how the Franciscans were up to anything other than heresy and killing the church. The inquisition ended up torturing the Franciscans. I dwell on the episode, because the abuse of the material dimension of the churches life was a key factor in Martin Luther’s initiation of the Reformation. Luther’s 95 theses scored a crucial blow for the view that the authority of the church is subordinate to the authority of the scriptures.

It took several centuries for the biblical principles unleashed in the Reformation to seriously affect patterns of church finance. Pastorates and particular churches continued to be supported by land wealth and the clergy continued to be treated like lesser nobility. Even when the churches of England, Scotland, and Germany were transplanted to America, they brought with them the expectation that land (Which was after all the chief form of capital prior to the Industrial Revolution) would finance their ministries. A colleague of mine, Erskine Clarke, has written eloquently how Presbyterians in the Carolina low country in the 18 and 19 centuries supported their ministers by leasing out glebe lands and the slaves to go with those lands. Then, as now, to be attached to a source of capital assures one of resources, but not of righteousness.

What happened to change the pattern of church support was a twofold revolution in values beginning just 200 years ago in the then new United States. The first aspect of this revolution in values was the rise of an evangelical conception of the ministry. Previously the Protestant sects of Quakers, Anabaptists, and the like, had believed that common people should return to New Testament patterns of gathering churches and supporting ministers out of the resources of that particular community, but now everyone but the Unitarians in Boston were getting into the notion of calling men (and occasionally women) into Christian service without asking them to be gentlemen first and well supported second. In less than a generation, the average minister went from being typified by a gentlemen in a starched white collar at study in the parsonage to being best characterized by a circuit riding preacher visiting the back country in torn and mud spattered clothes.

The second great development of the 19 century that affected how we financed and th thought about our churches was the rise of the middle classes. Prior to the rise of the bourgeoisie—those small business people, merchants, and white collar workers—who still fill mainline Protestant churches in America, the class structure of the United States virtually guaranteed that any given community or church was made up of the propertied wealthy and the working poor. The wealthy had most of their resources tied up in land, the poor had little to give. But when the middle classes began to expand, most of their resources were in current4 income, or wages. Church finance rapidly caught up with its clientele’s resources, and monthly subscriptions, offering envelopes, and proportional tithing replaced a former reliance on status priced pew rents and land proceeds. A wholesale sea change in this regard took place in less than 50 years in the middle of the 1800s. Another change brought on by this revolution in values is that certain biblical texts were recovered from near oblivion to create a theology of stewardship. The widow’s mite reflected the democratizing effects of the evangelical conception of the church’s ministry. Everyone was good enough to support the church and everyone’s sacrificial gift had merit in the eyes of God. At the same time the historically dubious practice of tithing was recovered from Leviticus and made normative on people living half a world and 28 centuries away. To the new emphasis on proportional tithing was added a New Testament gloss, where Jesus could be heard to say, “From whom to much is given, much is required.”

To me, as someone who studies these matters, the striking thing is how quickly the church adjusted to the changed market realities surrounding its members and supporters. If I sound just a bit cynical, it is not because I do not believe that the church needs a theology of stewardship concerning income. It does. No, my problem with the developments of the last century, is that the central theological difficulty got obscured. The enduring issue is materiality-- what do we do with any of our resources, we who are in the love and care and providence of God?

Pretty soon the adjustment to market realities of middle-class, wage earning church members became a self-perpetuating ideology of church support that stressed the virtues of income-based stewardship and still failed to grapple with the full theological problem of being embodied spirits in God’s world. Balancing the Sermon on the Mount’s admonition not to worry about material things with Jesus’ adjacent recognition that “the Lord knows you need these things” is the real issue that catches us again and again. Nevertheless, the 19th and 20th century mainline church made its peace with income-based resourcing of the ministry of the church, and from the time of the social gospel onwards was suspicious of wealth and its use. Clearly, for me, it is all part of the same piebe it income or wealth, it’s God’s stuff, not ours. But the mainline church tended to think otherwise, proclaiming wealth bad, income good; capital bad, labor good; profit evil, but wages excellent. The church for close to a century has labored under a wretched understanding of economics and a poor theology of human economic activity.

As part and parcel of its critique of accumulated capital, a critique of endowments arose. You have probably heard some of these before, but since I’ve collected them, let’s see if I’ve got some you don’t and vice-versa:

• A church with an endowment is a curse to its members whose desire to give and personal stewardship is undermined.
• The fate of European state churches show that churches that have to rely on voluntary gifts not endowments are healthier.
• The church should live by the faith of its current members not from the interest of its dead member’s monies.
• Endowments simply encourage preachers and staff to disregard the wishes of the membership.
• An endowment always depresses per member giving.
• To gather endowments is to show faithlessness in God’s ability to provide, just as the ancient Israelites showed their faithlessness when they tried to collect more than a day’s manna in the wilderness.
• God demands that we be spendthrift in love. Building an endowment is like holding back on our neighbors like Ananias and Saphira did in Acts 5.
• Since endowments usually come from rich people, they just make the church party to tainted money and ill-gotten-gains.
• Endowments prioritize yesterday’s buildings, programs and plans over where God may be calling the church to be today.

With all of that criticism, it is a wonder any of us are here today. But I am hopeful that we can help overturn some of that old “conventional foolishness” with a more complete appreciation of6 stewardship that extends to the use of all resources placed at our personal and corporate disposal.

One place I would want to start in countering the anti-endowment sentiment that we often encounter is by showing where the income-based strategies are inadequate to the tasks before us. There is a trap in the current income-based way of thinking about the support of the ministry and that is that it predicates the provision of ministry on the ability to pay. One of the things endowments can do is to shift support for ministry from those who have means to those who do not have the means for ministry. The shift may be an inter-generational one in which grandparents in effect guarantee that there will be a church for their grandchildren’s generation. It might also be a geographical shift whereby persons in north suburban Chicago set up a fund with their means to provide steady flow of funds to a fledgling Christian college in Zambia. In either case, the endowment is being used to accomplish the purpose of sharing the faith by sharing resources. The endowment becomes a vehicle of ministry, not an end in itself.

Another place where the old reliance on middle-class wage tithing is unhelpful to the contemporary church is in its failure to recognize that many of us have built up considerable safety nets of resources to carry us through what might befall us in life, but we'll have no need of those resources beyond the grave. Increasingly, the middle-class have a stewardship problem with capital . Our colleges, hospitals, and other not-for-profits will be happy to help us deal with that problem, but the churches have been very slow to break out of their capital/endowment fear to rise to the occasion to suggest ways in which we may support the gospel after we are gone and to support Christ’s mission after we are fully with Christ.

It is not enough, however, to make a negative case against an over-reliance on current member income mission financing. We need to make a positive theological and ethical case for endowments and having made the case, make sure our current practices measure up to that ideal. This is where the concept of commonwealth reenters the picture.7 Commonwealth—I think it helpful to delineate the term before I bandy it about too freely. Endowments, at their best are a form of commonwealth, for what are they but capital in a particularly moral form? By moral form, I am referring to the fact that endowments are capital held in trust for the particular commonly held purposes of a group of persons, in this case the church. They derive their value not from their size, or from their growth and return rates, but from the purposes toward which the wealth is deployed. The term commonwealth, thus reminds us that it is wealth and yet that the beneficiary of the wealth is not a private individual, but a community.

People, including most clergy and others with a social conscience have drunk deeply at the well of suspicion concerning wealth. It is therefore, necessary to articulate ways in which church wealth can be moral. One of the easiest analogies I have found for endowments being both a form of commonwealth and ethically intelligible is the church building. Very few churches in our country exist without buildings from which to worship and mount their programs of witness, fellowship and service. Often they make those buildings available to a wide variety of community groups. Alcoholics, persons in recovery, homeless persons, people who’ve lost a child, Boy Scouts, Girls Scouts, find a warm, well lighted place to meet and thus share in the commonwealth of a particular congregation. Buildings are a form of property, an asset, just as surely as stocks and bonds are assets. Even if that building is open only for the worship of the faithful on Sundays something shared and productive is being done in the name of God. When it comes to church buildings, no one would argue that the roof should be allowed to cave in because holding buildings is wrong. Instead the asset is maintained for the good it can continue to do both now and in the future. Likewise, endowments ought to be viewed as a form of asset supporting the ministry of the church.

There sometimes comes a time, however, when the building is an inappropriate fit to what goes on inside its walls. We are all familiar with older, mostly urban congregations that are slaves to slate roofs and utility bills, whose ministry is encumbered by a white elephant building. Endowments and the investment policies associated with them can also be mismatched with the8 ministries they support, or like church buildings they can become ends in themselves. Yet, that danger, I would argue is no reason not to have an endowment. Rather, it is a challenge to the stewards of any asset—physical or financial- -to become more conscientious about the stewardship of the asset entrusted to them.

Our biblical faith is helpful to us at this point. Jesus’ teachings about the use of talents, about not burying those talents come to mind, of course. So to do his warnings about not building bigger barns when our lives are at stake. Yet the passage that has been on my mind much in the last few weeks is where a woman breaks open the costly perfume and rubs it over Jesus’ feet with her hair. Judas is quick to say, “why was the waste with the ointment made? It could have been sold for money and given to the poor.” That story’s on my mind because it sounds so much like our modern in-church battles about what we do with things. Judas is playing the role of grumpy treasurer, or perhaps it is the social action committee chair complaining that restoring the stained glass windows is a huge waste when there are so many homeless in the streets. Actually, John thinks that it is more the case that Judas was looking to line his own pocket. But look what Jesus says, “you will have the poor with you always. You will only have me a little while. What she has done is a beautiful thing.” This introduces a complexity to the stewardship of things that we hadn’t expected. Sometimes, you celebrate and most days you take care of the poor. Sometimes you kill the fatted calf and most days you work in the field. The crucial, and difficult, thing to know is when to conserve and when to expend without reserve. Christ’s many economic analogies and encounters urge us to discern a path between the twin dangers of being misers and being profligates. This is hard news for those of us who wish our fiduciary responsibilities were discharged by following rules by rote without exercising spiritual discernment. But the ethics of endowments in Christian institutions requires a continuing concern for fitting our resources to what God is calling us to do and be as a people. I think this means four very concrete things for our stewardship of endowments in the church and in the time remaining, I’d like to briefly offer these as theological and ethical criteria for assessing our faithfulness in the task before us.

A Theology of Grace

My first desiraturm is that we who have or are seeking to develop endowments have a theology of grace that can lighten the burden of the difficult job of discerning how to be faithful with the things placed in our care. It is extremely easy to fall into the sin of pride when your institution has more resources than others. But if anything, endowments are usually the result of someone’s past affection for an institution translated into a trust placed in its future. As such it is not a current market valuation like a stock price. (It would be unfitting for someone to say that my seminary is currently worth $125 million, even though its endowment totals that amount). No, the endowments we hold are more like an honor placed upon a boy by a dying father. The boy hopes to be worthy of what he has already been given. Likewise our worth as institutions are judged by the fruits we bear. As Christians, we are supposed to live by grace. But how often do we? Endowments should be a reminder of blessing: and as permission to live faithfully and graciously.

Communally Understood Purpose

A fair amount has been written about whether you should use endowment for building, staff support, or outside mission. The important thing is not which answer your church should adopt, but rather the theological and moral narrative the community tells itself about this commonwealth it holds. The church with an endowment, but without a communally understood purpose for that endowment is a church headed for trouble. But it isn’t good enough to simply have a narrative about the purpose of one’s endowment. The story also has to hold up as good theology. For instance, I am aware of a church in a major city, whose commonwealth was dedicated to preserving the great religious art legacy of Europe. They used their endowment to regularly acquire stunning art. Yet when several candidates for that church’s pastorate asked about economic justice, community involvement and the use of the church’s members' considerable power to advance missional concern, they got blank stares from the PNC. That10 church had a narrative, but it had no Christian charity in that narrative. Its wealth did not help it be the church better, but it sure made for a great religious art collector’s club. On the other hand, I know of an Episcopal church in Indianapolis that has made great strides in outreach and vital mission by allocating its endowment to building upkeep and basic operating expenses. The story there is one which says, “The lights and bulletins are paid for, the rest is up to us. What are we going to do with this gift. Every dollar we give, goes directly into the mission of the church.” That, I submit, is a much healthier communally shared understanding. The commonwealth there has a very clear purpose.

Spending Rates

Directly related to the issue of a communally understood purpose is that of a setting a spending rate that matches the purpose of the endowment. I have been on the inside of an number of institutions, including local churches that fought over how much of the endowment to spend each year. Here again, a number of options are defensible. A church that has a purpose that is virtually eternal (such as building maintenance) might set a fairly low rate of spending in order that the real value of the endowment might keep pace with inflation so as to be able to defray basic building expenses thirty years from now, just as it does today. The purpose of the commonwealth in this case would be to free the congregation for worship and mission, and the spending rate would be appropriate.

At the other extreme, a church might, through the bequest of a donor, have a quasi endowment fund that required it to spend the corpus and income over a twenty year period for education and recreation for youth in the neighborhood. The purpose is to help the next generation of youth in the hopes that they will subsequently be able to do their part. A low spending rate in that case of 4.5%, say would be inconsistent with the purpose of the holding. A church holding too much or too little back for the future is living in a way that its ethics don’t live up to its moral sense of what the money is for. This should be obvious, but how often have we heard old maxims like, “never invade principle,” or “use all the income” replace genuine11 reasoning about what the purpose of endowed, or quasi endowed funds are and what spending rates fit those purposes. Of course it is essential to respect donor restrictions, but ideally, before the gift is even made donors and recipient organizations have a clear sense of what the commonwealth they’re creating is all about. Being up-front about these matters models something constructive about trust in Christian community.

Investment Policies

Finally, there is the matter of investment policies. Once again, I would take the position that there are “fitting” and “unfitting” ways to make money for particular Christian missions. The extreme position that any social or ethical investment screen is a violation of the fiduciary responsibility to seek maximum return is pretty powerful in our investment culture, but is upon examination a flawed position. If your church treasurer offered to get you a 22% return with his uncle Louie who owned a string of prostitution ranches in Nevada and was looking to expand, you probably wouldn’t invest even though it would be a legal investment and even if the risk exposure was negligible. Why? Because that way of making money implicates us in the evil way it is made. You cannot have the purpose of feeding the hungry or preaching the gospel and pay for it based on the sexual humiliation of people in Nevada. Usually, the choices of good and bad investments aren’t so clear, but the way we make and expand the wealth portion of our commonwealths says a great deal about who we are. Surely, we should look to avoid vice, but I’d also challenge our endowment managers to find us positive investment choices that are consistent with our beliefs and purposes. If you can invest in an firm that makes a beneficial product, pays a good rate of return and treats its employees fairly, buy it. For when you do you will have made a witness about the kind of players you value in the marketplace. Above all, our investment policies can and ought to advance, not undermine, the witness of the church of Jesus Christ.

In conclusion, then, history shows you to be engaged in a time honored practice of supporting the church through endowments. Our theology challenges us to expand our12 conception of stewardship to embrace all that we are and hold in the name of God with a sense of grace. And ethically, we practice our ethics when we create commonwealths equal to and consistent with the tasks of ministry before us.