The Use of Endowments
By: Matthew Davis

First, what is an endowment? A financial endowment is a fund made up of donations to an institution, made with the stipulation that they be invested, and only the investment income is to be distributed while the principal remain intact. This allows for the fund to have a much greater impact over a long period of time than if it were spent all at once.

The endowment is intended to be kept permanently and invested to provide income for continued support of an organization. Usually, the income stream generated by an endowment is earmarked for a specific expense within the operations of the charity for whose benefit the endowment was established.

Ministries like Christian schools often promote the benefit of small student-to-teacher ratio as a positive reason to enroll students, and it certainly is. However, this positive creates a problem on the revenue side of the picture. By limiting the number of students, we are imposing a greater per student burden to provide for the teacher. Can all of the provision for the teacher come from tuition? Or would this cause us to charge a tuition that was beyond the reach of many families; especially if they had multiple children in the school?

In Christian schools, this inherent tension is often relieved by asking the teacher to settle for much less compensation in order to make the tuition affordable for the parents of the students. One person bears most of the burden. An endowment can remedy the problem.

Why hasn’t the endowment approach been used before?

It has been used before, in fact, for centuries. Every major college or university has endowments. The world’s largest educational endowment contains more than $34 billion! (Harvard) The Harvard endowment funds salaries for department chairs, scholarships for students, expenditures for facility care, and much more.

Why haven’t Christian schools used the endowment approach?

Is it because endowments are wrong? We believe endowments have not been used because we have not been “multi-generational” in our thinking.

Some have said, “We just need to trust the Lord! Or have more faith!” When we hear a statement like this it is only fair to ask the individual what they mean by faith. Do they mean, “We will do nothing but wait until God places our provision into our hands?”

Or do they define faith as, “Taking God at His Word and acting accordingly?”

There is a big difference between the two mindsets. The former allows opportunity to ignore responsibility while trusting in our own thinking, or imagining what God may be up to. The latter is based in what God has already said in His Word; Bible principle which requires faithful obedience.

Biblical Basis for the Endowment Approach
Is the endowment approach a faithless approach? We think not. In fact, we are convinced that it is a faith issue. The faith issue centers on God’s provision.

In the context of our work with ministries, we focus most heavily on the provision for staff salaries and scholarships for students. Simply stated, the ministry must have enough revenue from either gifting or fee revenue, or a combination of both, in order to meet the provision needs. Both require faith. We must trust God for the financial provision through gifting and for the provision of students who will pay the tuition fees.

The endowment approach requires prudent gathering of resources, trusting God to provide them. The resources come from gifting and good financial management. Giving is certainly commended in Scripture. So is good management of our resources.

Consider the following passage:

“Be thou diligent to know the state of thy flocks, and look well to thy herds. For riches are not for ever: and doth the crown endure to every generation? The hay appeareth, and the tender grass showeth itself, and herbs of the mountains are gathered. The lambs are for thy clothing, and the goats are the price of the field. And thou shalt have goats' milk enough for thy food, for the food of thy household, and for the maintenance for thy maidens.” (Proverbs 27:23-27)
 
In order to be a faithful steward, both knowledge and attention are required. We must know the location and condition or our assets and we must be give regular attention to the care and use of the resources God entrusts to us.

Solomon also says, “A prudent man foreseeth the evil, and hideth himself: but the simple pass on, and are punished.” (Proverbs 22:3).

A prudent man will look ahead, and because he does, he sees a calamity heading his direction. He takes action to avoid the destructive impact of the calamity. This is good stewardship.

And finally, just spending our resources is not considered wise stewardship: “There is treasure to be desired and oil in the dwelling of the wise; but a foolish man spendeth it up.” (Proverbs 21:20) Saving and investing are both commended in Scripture.

The endowment concept is also based on an understanding that God already owns everything. If it all belongs to God, then “spending it up” is not the issue. The issue becomes positioning it.

Consider the following: “If you give a man a fish, you feed him for a day; if you teach a man to fish, you feed him for a lifetime.”

When it comes to ministry gifting, we could learn from this saying. A gift for the provision of a current need is used up the day it meets the need. A gift to an endowment is an investment that continuously gives to meet ongoing needs. Wisdom is certainly needed to determine which is appropriate for any opportunities we consider.

It is quite common to see a business man invest in his business with the expectation of generating a profit year after year. An endowment gift is an investment that generates profit (return on investment) year after year.

Matthew Davis serves as corporate counsel for Eternal Vision, a ministry dedicated to supporting and advancing Biblical stewardship and quality Christian education, www.eternalvision.org.

pportunities provide substantial benefits to both the individual and the school as a whole.

While acting as a middle school trip sponsor, I have seen tremendous growth in students who have participated in a student travel program. They become excited about learning. They not only develop new skills, but they become more involved in their everyday classroom experiences. I’m convinced that educators can truly impact a young adolescent’s education when they include student travel – whether it’s domestic or international – in their curriculum.

Initially, students gain a greater understanding of the geography of the portion of the country they are visiting. Teaching geography is a traditional challenge, but geography comes alive when young people see it with their own eyes instead of looking at a map hanging from the classroom wall or a textbook photo. I recommend that student tour groups try to take full advantage of this by having students ride on motor coaches rather than flying. It may take longer to reach your destination, but every moment of the trip can be a learning experience.

A second benefit is the valuable knowledge you gain about the specific region being toured. Each area has local customs and historical areas that capture the past and are rich in educational value. I believe it’s wise not to rush to a destination, but to take time to experience the unique qualities of communities while passing through, whether it’s an authentic Eastern European meal in Chicago or visiting the cradle of liberty in Philadelphia.

Students can also be exposed to the arts and culture through educational travel. For example, I always scheduled a dinner theater production when our school visited Washington, D.C. The experience was often the initial exposure to a live production and a meal of this nature. Our teachers also made a big deal of the event by asking the students to dress up for the occasion.

When traveling to large cities, students are able to visit art museums and see, for example, the Impressionist paintings. One advantage to traveling with a student group is that the group can attend special activities such as mini-lectures by museum personnel to prepare them for what they are about to see. An opportunity of this nature at such an early age is invaluable to the overall development of the individual. The experiences we have in our formative years help prepare us for adulthood.

While students clearly gain from educational travel, so does the school. The students learn about the tradition of educational travel and look forward to the grade level experience for years prior to their actual trip. In addition, they continue to talk about it for years following the trip. A high school counselor once told me that the two most memorable middle school experiences seniors recalled were their eight grade trip to Washington, D.C. and the academic honors they achieved during their middle school careers.

The school also builds positive relationships with the parents who serve as trip chaperones, and they share their enthusiasm. I always selected chaperones from my PTO, teachers in the district or neighboring districts, or school board members. Once they went on a successful trip, they became ambassadors for youth educational travel.

In my experience, educational trips lead to greater academic achievement in the classroom. A traditional yearly trip certainly provides an incentive to those students wishing to participate. The travel experiences also turn on some students who cannot be reached in the traditional classroom setting. School boards view student travel as an extension and enrichment of the curriculum. Therefore, the attendance and behavioral guidelines in effect during the academic year can also be used to select the participants and guide behavioral expectations throughout the trip.

According to Michael Palmer, executive director for the Student Youth Travel Association, “Travel brings the classroom curriculum alive, inspiring students to learn through first-hand, interactive experiences. It teaches understanding of other people, their history and customs. Travel also motivates students to achieve in their classrooms.”

Dr. David Thompson is a retired middle school principal and is the educational coordinator for Travel Adventures, Inc., www.traveladventures.com.