The Money in the Milk Can: The Purposes and Uses of Church Endowments

The Money in the Milk Can: The Purposes and Uses of Church Endowments
Barbara G. Wheeler

I accepted the assignment to speak to you tonight about the purposes and uses of church endowments on the condition that my role be to provoke your thinking rather than to make authoritative pronouncements. I set this condition because you have more experience in these matters than I do. I have never had a leadership role in a congregation that has a substantial endowment. I have had some dealings with endowments: The institution that I head has one of modest size in whose management I get involved, and for a number of years I’ve worked as a consultant to foundations that have vast resources in endowment form. Sometimes, in my consulting role at foundations, I have been part of debates about how the income from those funds should be spent. These experiences are helpful by analogy, but I have never been in your precise position, and thus it is appropriate that you take my suggestions as just that – an outsider’s attempt to stimulate your thinking about issues that you already confront on a regular basis.

It strikes me that you endowed churches are in something like the position of the Amish farmer I heard a story about from some Mennonite colleagues. As you know, the Mennonites and the Amish are religious cousins, and the Mennonites like to tell jokes that make clear that the romantic image that those of us in “the world,” as they say, have of the Amish is not very accurate.

The story concerns a farmer of the Old Amish Order who successfully bid on a farm at a foreclosure sale. Such an occurrence is increasingly common. The Amish, with their agricultural know-how and their large families that provide cheap labor, have become familiar figures at the sales of failed farms. In this case, the farmer was buying the new farm not for himself but for the oldest of his many sons, and he had to dig into his savings to pay for it.

On the day of the closing he showed up with an enormous milk can, and when the bank representative asked for the $250,000 purchase price, the farmer reached into the milk can and produced a huge handful of cash, which he proceeded to count carefully. Half an hour later, the can was empty and only $247,000 had been counted. "Oh dear," said the farmer, "I must have brought the wrong can."

It seems to me that your situation as endowed Protestant churches resembles the rich Amish farmer's in several ways. For one thing, the general public is not accustomed to thinking of either of you as having extensive assets. The last thing that most drivers imagine as they maneuver their cars around Amish buggies full of men, women and children in plain nineteenth century garb is that the head of the family may have several million dollars not needed for current operations stuffed into his old milk cans.

Likewise, churches are not generally thought of as having money in the bank. At least not most churches: perhaps an occasional Roman Catholic cathedral with obscure links to the mysterious wealth of the Vatican, or a sprawling evangelical megachurch with thousands of members and media fund raising, may rest on a foundation of real wealth, but our kind of churches, mainline Protestant ones in the Reformed tradition, have always projected an image of dour austerity.

In fact, in the popular mind, the most prominent feature of the reformation tradition we continue to represent is the reformers' opposition to the concentration of wealth and power in the Catholic Church. We are the people who on Biblical grounds opposed the amassing of funds and real estate by churches and their leaders. To make our opposition to lavishness and luxury visible and public, our Puritan forebears stripped our churches of most decoration and restored stringent moral standards for both clergy and lay church members.

We made our point: hard work and disciplined austere living came to be viewed as a distinctly Protestant ethic. As a result, a rich Presbyterian church confounds popular expectations; it jars people's sensibilities; it seems as strange to the general public as a seriously wealthy Amish farmer.

And not only strange. Some people, as you well know, are more than surprised by the idea of an endowed Presbyterian church; they are offended. That fact -- that some are scandalized by the wealth of endowed churches -- weighs on our consciences and causes us to raise the kind of questions you have asked me to address this evening. How do we reconcile the facts of affluence in some churches and great need and scarcity in so many other communities? Granted, that most endowed churches do not have the legal option of giving away their endowment principal, can the income from endowed funds be spent in ways that resolve some of the tensions and moral ambiguities that the very existence of church endowments creates?

I want to explore these questions this evening, keeping at least one eye on the Amish farmer, who after all is our religious cousin too, sharing with us some important values and commitments, and who therefore not only helps us see why the situation of endowed churches is uncomfortable, but provides further pointers about what to do in such an uncomfortable situation. And what not to do. One valuable reminder that emerges from the similarities between the farmer and churches such as yours is that most of the ways people treat their wealth are not options for you, at least not if you, like the farmer, want to preserve your identity and your values. Religious persons and institutions cannot, for instance, in good faith and conscience hoard their wealth: Lights are not to be hidden under bushels; talents are to be used. One milk can at a time, that Amish farmer will no doubt provide for all his sons as they come of age. And endowed churches, like foundations and endowed educational institutions, have no moral right simply to sit on their assets in order to grow them to maximum size, the way that many individuals do. Some portion of the income from what was given must be used. That is what the donor wanted. That is what, the Gospel seems clearly to say, God wants as well. The gifts of God are for the people of God.

So endowment income, or at least some prudent part of it, is to be spent. How? Some further limits and constraints are self-evident, built into the shared values of Presbyterian churches and Amish farmers. Our beliefs and commitments prevent us from spending large amounts for our own comfort or amusement. The Amish, who refrain from using not only luxuries but even basic products of modern life, can’t sink their cash into fast cars or electronic equipment. If they did, they’d no longer be Amish. Similarly, Presbyterian churches cannot spend their wealth on ostentatious luxuries for their leaders or amenities for their members. If they did, they’d no longer be churches.

Other constraints that stem from who we are, are less obvious, but no less real. The Amish believe that their whole purpose in the world is to lead a luminously holy life. Since work is a means to holiness, it is unthinkable that they would use their accumulated wealth to retire early, to provide the necessities of everyday life without having to work every day. In the reformed tradition we state our purpose a little differently. We are here—as individuals and congregations—to give God glory by doing God’s will and work, but for us too, it would be counterproductive, at cross purposes with our basic purpose, to use inherited wealth so that we can take it easy or retire from active service.

I realize that the temptation is great, to use endowment income to pay the bills and to allow it to substitute for the kind of annual giving that non-endowed institutions raise regularly. Schools as well as churches give into the temptation—certainly mine has in the past. For the good of our souls, however, we should not permit this to happen. Not to hold the present day members of a congregation responsible for its regular expense—especially when they have the means to meet those expenses, as members of endowed churches often do—is to deprive them of something critically important, an opportunity to participate with other members of community of believers in God’s work.

Thus far my comparison of endowed Presbyterian churches and Amish farmers has yielded only negative principles. Don’t hoard your wealth; don’t spend it on luxuries; don’t use it as an excuse to retire from the duties of congregational life. Those guidelines do not tell us, however, what should be done with the money in the milk can, or in the case of endowed churches, with a reasonable portion of the annual earnings of permanent funds. What are the legitimate uses, the best uses, of a church’s inherited or accumulated wealth? Can these special resources be spent in ways that address the ambiguity of some churches having so much when so many others have just a little, or nothing at all?

At the risk of putting far too much weight on a joke, I think we can again learn something from the Amish farmer. He spent his milk can money for the sake of others, to accomplish something that he deemed important and that would otherwise not have been possible. Those three guidelines can serve as simple but extremely useful rules for us as well. The special resources with which God has graced your congregation, resources which in most cases are not needed for your survival as a community, should be used for the sake of others; they should be used to accomplish things that are, in your best judgment, necessary and important; and they should be used to make things happen that otherwise might not, because the usual kinds of support are not available to them. Let us explore briefly each of these rules or criteria for the use of endowment income and try to figure out what their specific implications for you may be.

First, endowment income, or whatever percentage of investment yield you think it right to spend, should be sued for the sake of others. This is a positive way to state what we put negatively before. Because these funds are a special, gracious luxury goods for its members and leaders; nor should they be sued to relieve ourselves of the obligations that all church members have, which is to give or raise enough money every year to cover the ordinary maintenance of church property and to pay a fair share of denominational expenses and the cost of mission beyond the congregation. Endowed funds are not, in other words, intended to make your life as congregants cushy or easy. These special resources must be sued for special purposes that transcend our own comfort and self-interest.

This does not, however, mean that all funds earned by endowment must be spent outside the congregation – given away to other persons and organizations. Some kinds of internal expenditures benefit others as much as our own congregation’s fellowship and membership. Programs of service and advocacy that are run by the congregation and staffed by its members and volunteers from the community clearly fall into this category. So do some building expenditures. Many endowed churches have especially large buildings that serve as community centers. To maintain such buildings, which is often especially expensive, and to keep them open to community groups at low cost seem to me to be an entirely appropriate way to spend some endowment income for the sake of others. Some church buildings may be beautiful for the sake of others. Some church buildings may be beautiful and historic as well as useful; though we less often acknowledge it, they too contribute to the quality of a community’s life, and the extraordinary expenses of keeping them in good repair may also be a legitimate way to spend some endowment.

If endowment is chiefly for the sake of others, however, a significant share of it should probably be given to those it is intended to help; it should, in other words, be used for mission beyond the congregation itself. But for what purposes should these funds be given, and to whom? Again, as we’ve noted, the Amish farmer is a model, suggesting two further criteria. The first is that these special funds, the money in our milk cans, should be given for things that we judge to be important.

This seems at first glance such an obvious requirement that it’s not worth naming. Of course we give to important rather than trivial causes. But let’s reflect a moment on how much care we actually invest in being sure that we are giving to the most important causes. Too often, our giving lacks the Amish farmer’s discipline. He would have generated a lot more gratitude from his children if he had simply put the name of each child on a milk can, the contents to be spent on whatever the child chose upon reaching maturity. Instead, the farmer made the choice; he gave something that, in his system of deeply-held values, was important and worthwhile and would give his son the opportunity to lead a simple and holy life as well as to prosper.

By contrast, we too frequently give in to the natural but unhealthy human tendency that the farmer resisted. We like to be thanked for our good deeds and to see an immediate positive result of our generosity, and we often make our decisions about giving under the influence of these preferences. We let our sentimentality – the need to feel good as a result of our giving – regulate our decisions about how mission funds should be spent. This is especially true for benevolence funds that were generated by endowment, funds that did not require very much present-day effort to raise. A pattern of easy come, easy go is easily established. Here sits this pot of money to be given to others. It is very tempting to hand it out quite casually, responding on impulse to those whose application sounds most desperate and whose gratitude is most immediate and enthusiastic.

The causes and projects that are most important, however, the ones that carry our commitments and values the farthest, may not yield that kind of immediate satisfaction. To be sure that we have identified such causes and projects and to protect ourselves against the temptations of sentimentality, we need what the farmer had, a discipline, an orderly way of proceeding that is in line with our values. Such a discipline begins, I think, with careful and well-prepared reflection before any concrete decisions are encountered. This reflection, in my view, should be theological. What does it mean to be Christian, our specific time and place? What does the God revealed in Scripture want from us here and now? What is most important for to try to accomplish in the world as a way of showing our gratitude for God’s great gifts to us and God’s living care for all of creation? What in that world is most wrong, most offensive to God, in our immediate communities, in our nation, in the world more widely, that we can help to change or to fix?

Such reflection should yield, first of all, a wonderful theological conversation, the kind that members of congregations have with each other all too rarely; and then a substantial list of important goals and causes, a list to consult when weighing requests from projects that tug at the heartstrings, or to which we have strong personal ties – factors that influence us heavily if we do not give careful forethought to the question of what is most important. Theological reflection and the conclusions it leads to can help us to sort among the many requests that come our way. Such reflection may even impel us to do some research, to become what the foundations call “proactive,” to go out looking for projects and causes that may accomplish what earlier deliberations have led us to conclude most needs to happen.

I do want to be clear here that I am not suggesting that churches adopt the rigid sort of goal-setting procedures that too many foundations lock themselves into. Churches have a special kind of freedom from government regulation and other outside pressures that it is important to preserve. I do think that before you make actual decisions, you should think hard about what important, but such reflection is never final, and thus will come from many sources, including those who approach you for help, so sometimes you will find yourselves responding to requests that were not on your list of important things. But unless you do some thinking in advance about what makes any project or organization important, you will have a hard time recognizing those appeals that are in line with your goals and values and distinguishing them from those that appeal to us as givers because they give us the most immediate rewards and satisfactions.

Now we have two positive criteria for how to spend income from endowment. These special resources, we have said, should be spent – whether inside the congregation or beyond it – for the sake of others; and they should be spent for the most important purposes, for what we can best discern God most wants accomplished. These criteria still, however, leave a very wide field. They might point a board of trustees or benevolence committee in the right direction, but they do not give much help in sorting among a huge list of potential causes and projects. Even granted that each congregation and its context is different, and that therefore we cannot devise a precise prescription for spending that will fit you all, we can, with the help of the farmer, offer somewhat more concrete advice about what endowment should be spent for.

The further criterion the farmer suggests is this: Use your endowment to accomplish things that otherwise might not happen. No one but the farmer would have been either willing or able to set up his son in business. Likewise, church endowments are scarce, rare resources. Most churches don’t have milk can money. Therefore those resources should be used for those things that they uniquely can accomplish and that are unlikely to get support from other quarters.

Like what, you’ll rightly ask. What can endowment income accomplish that other giving, such as church mission funds from the usual sources, cannot? Several things, it seems to me, which stem from the features of endowments that make them different from other revenue sources. The income from a well-managed endowment is relatively predictable: it is very likely to be there in the future; it is produced automatically; it does not have to be raised every year.

The predictability of endowment income means that you who have access to such funds can make some commitments for the long term. Unendowed churches rarely are secure enough in their annual fund raising to be able to promise support to an outside organization or project over a series of years. As foundation have discovered, however, multi-year gifts are powerful; they can accomplish things that one-shot grants cannot. The promise of long-term support can give a new project or organization stability that often enables it to attract other support. And continuing commitments can be used to help, indeed to force, an organization to become financially sound and independent. Such funds are leverage. If your funds are made available to an organization on a decreasing basis with the requirement of matching funds to be raised, that organization’s chances of long-term survival may be greatly increased.

The fact that endowment funds do not have to be raised all over again each year from the congregation provides even more opportunity for creative and courageous philanthropy. Churches whose mission funds come entirely from annual giving face many political constraints. To stimulate giving for the next year, they have to center their choices on causes and projects that most members of the congregation know and like. Thus their giving is likely to focus heavily on popular local organizations or distant causes that have great emotional appeal. And churches that rely on annual gifts to make up their whole benevolence budget also have to be careful; a controversial choice in one year can have negative consequences for the next year’s giving. Therefore such churches almost always give to causes that are widely understood and generally supported.

You who have access to endowment can and should range more widely. Popular causes and well-known organizations will find other support, including other church support. You are free to do other things that other churches usually cannot. Let me give some examples of the kinds of things that are your special province.

You can, for instance, support programs of service and advocacy for those whose cause is not popular. One dangerous tendency in our society is to divide those who suffer into two categories, the innocent and the guilty. We do this, I think, to assure ourselves that most suffering is avoidable; if we steer clear of the mistakes and bad choices of the guilty, we may not have to suffer. To maintain this comforting division of the world, we readily give our money and sympathy to the innocent and withhold it from those we think brought their troubles on themselves. Children with cancer did nothing to create their own suffering, so we feel free to support them. Drug-users with AIDS created their own misery, often after being warned, so our inclination is to let them live or die with the consequences.

As endowed churches, however, you have the special privilege of acting on the profound reformed insight that we are all guilty and corrupt in God’s sight, and that we are all also the much-loved objects of God’s grace and mercy. You, who don’t have to please the crowd or satisfy public opinion in order to raise all of next year’s mission budget, do not have to favor the so-called innocent with all your gifts and punish the allegedly guilty by withholding your generosity. You can give as God, I am convinced, wants us all to give: to the least among us, the most miserable, the alienated, the unpopular, the public sinners – precisely those with whom Jesus spent so much time and care when he was among us.

There is a second category of causes that attract little support from most churches. These causes are not unpopular in the sense we’ve been discussing, but they’re not wildly popular either, because they’re complex, those programs and organizations whose merits require time and effort to understand. It’s another North American fault to favor the simple or the complicated, and churches are prone to that tendency. Let me give an example. It is not hard to see that it promotes the cause of education to give a scholarship to a needy student, and indeed, scholarships for students, especially those we know, are popular causes for many churches. It takes much more knowledge and insight, however, to understand that endowing s scholarship or professorship or even maintenance fund at a school may, in the long run, do far more good for education and the wider social order that education serves. Endowment enables a school to plan, to raise quality, to make commitments for the future. Churches that have to raise their whole mission budget each year do not have time to educate their constituency about such complexities. You do. So your giving should include not only unpopular causes, but also complicated ones whose importance is not generally or easily understood.

As endowed churches, you also have a third kind of freedom from the constraints that most churches face. You do not have to go along with conventional wisdom and fashion. Since non-endowed churches rely on support from a majority of church members to make their budgets, they must conform to majority opinion about what matters. But you can continue to support causes that are no longer chic – racial justice, for instance. You can decide for yourselves whether causes like education and ecumenism deserve financial support at a time the when the Presbyterian Church seems to have given up on them. Your freedom from the tyranny of fashion enables you not only to support past causes that others have become bored with, but also to look ahead to possibilities for the long term future that others haven’t yet become interested in. You can search for new organizations and ideas that the majority has not yet adopted, risky ventures in their initial stages that no one but you may have the freedom to underwrite.

And finally, you, unlike most churches, can make big gifts. A church that needs a broad base of support from its members must balance its mission giving carefully, including something for everyone. You, however, can on occasion – I am not suggesting that you will want to do this often – concentrate your funds in order to have a significant impact on the future o an important project or organization. Obviously the risks of this kind of giving are high. If you choose the wrong object for such a gift a great deal is wasted. Most churches cannot take that chance and therefore parcel out their gifts in small pieces. But the rewards of a single inspired large benefaction are great, too, and you should at least consider from time to time whether your church is called to make that kind of major difference.

So far I have stressed the kinds of giving that are open to you that are usually closed to other churches. But as endowed churches you have special privileges not only in comparison with other congregations. You are, in fact, the least regulated – or to put it positively, the most free –givers in the United States. Corporations have to answer to their boards, their stockholders and the tax authorities; foundations are closely regulated by Congress; even individuals do their giving under the stern eye of the IRS and must prove that any tax deductible contributions are made to properly registered charities. By sharp contrast, a church can give to just about anyone or anything it chooses. Most churches have limited disposable income and therefore can take little advantage of that remarkable flexibility. You have resources and flexibility both, and you can put them together to make the difference that no other givers can make.

I do not think much of a summary of these straightforward suggestions is required. They translate into simple guidelines. Recognize that your community has the surprising special resources that endowment provides, not because you earned or deserved them, but because God is good and bountiful. Don’t hoard these resources, and don’t spend them on luxuries for yourselves or to exempt yourselves from the responsibilities that less fortunate congregations face every day. Spend them instead – that is, spend a prudent part of them – for the sake of others, and work hard to be sure that your scarce and special resources are supporting the projects, organizations and causes that matter the most and that others can’t or won’t contribute to. Search out the kinds of mission that are unpopular, or unfashionable, or complicated or in need of continuing or extensive support.

Several years ago a colleague and I conducted a study of the deeply troubled world of theological publishing. We found that the situation of publishing is chaotic and confusing, but we concluded that the needs of religious presses are really quite simple. All they need, we decided, from denominations and their other sponsors, are three things. They need a mandate, in their case to do quality publishing. They need the financial means to accomplish that mandate. And they need freedom from censorship and outside interference in their work. That stark formula – mandate, means, and freedom – will guarantee the success of almost any human enterprise. In your case, all the elements of the formula are in place. You have a mandate, a compelling reason to have an endowment in a time of great human need: the Gospel imperative to use the goods of creation for the good the whole world. You have the means, bequeathed to you by generous and sometimes visionary forebears. And you have an unparalleled amount of freedom to be creative, generous and even visionary yourselves. The mandate, the freedom, and the means – that money in the milk can. You have them all, and you can use them as God intended.

NAEPC (National Association of Endowed Presbyterian Churches) Conference
October 3, 1991
Wilmington, Delaware