Cash is Trash

By Brandon Allen Executive Director | Fortify Foundation

As Christian educators, we know that our lot in life isn’t typically followed by the most lucrative career possible. There are many other things that we could be doing that would grant us a greater income and further flexibility in our personal budgets. But why is it that some Christian educators seem to fair better than others? All things being equal, why is it that some individuals have greater financial flexibility than others?

I’ll never forget the example afforded to me by someone who has spent their life focusing on investments. Our conversation was presenting the concept of endowment to a school’s director and the phrase “cash is trash” came out. Wait, what? Who in their right minds would consider cash being trash? Most Christian schools in America are fighting tooth and nail (so to speak) to acquire and maintain more cash! The principle wasn’t that we don’t need cash, but rather that cash in hand isn’t doing as much good for us as it could otherwise.

I’ve discovered that there is seemingly a generational gap when it comes to this line of thinking. Some of which is based on circumstances that life has often afforded. When you don’t have much, you try to hold on to what you do have a little more tightly. This often rolls over to the way we operate in finance. If we’ve experienced the seasons of drought, our aim often becomes penny pinching in the short-term. This may work for a season but should never become our long play. Imagine having a structure that was built cutting every corner possible. This may have seemed like the right move in the moment to give us a usable facility, but do you feel the expense saved will be worth it down the road? What happens when that structure starts to deteriorate (most likely quicker than originally anticipated)? Will those additional costs offset the difference in what was seemingly originally saved? This is how finances typically work.

Cash either works for us or against us. There are 2 ways that this most likely plays out in your scenario:

1. Do you spend it as quickly as you receive it?
If I was a betting man, I would say every organization has experienced this at some point in its business life. Sometimes it’s the feeling as if we are always chasing our tail. Other times it may be trying to make some good forward progress. In either case, we know the result always leaves us in a vulnerable financial position when the money we have today isn’t available tomorrow.

2. Do you let it sit there with no purpose until something major comes up?
In other words, what value is it bringing us other than security in knowing that we have it? We’ve mentioned this before, but there is a strong Biblical principle at work here. Matthew 25:14-30 is a very familiar passage to most of us. It is often referred to as the parable of the talents. Three individuals were each given significant sums of money. A talent was equivalent to about 20 years’ worth of wages which is no small sum regardless of receiving 5, 2, or even one talent. To get straight to the point, what was the end result? The first two individuals exponentially multiplied what they were given, and the last individual let it sit there. Which of these individuals would you want handling your finances?

This is the driving factor behind the phrase “cash is trash”. Again, it’s not that we don’t need money and should throw it all away. It’s the principle that either money is working for us or against us. If you have money sitting in a bank account with no immediate intent for use and no significant interest accruing on it, then it’s just like the individual given one talent. There are so many simplistic ways (especially in today’s economy) to produce on what God’s given you today to produce for tomorrow.

At Fortify Foundation, we want to take it a step further. We not only want to help you grow what you do have currently, but we also want to help you produce in a multigenerational sense. We want to help you leave things better than you found it and make sure it stays that way.

Consider this story direct from Princeton University:

Flash back to the 1970s. Princeton University was in the red and running budget deficits. Building repairs lagged; financial aid resources fell short of student need; salaries failed to keep up with inflation; and new construction projects were on indefinite hold. This was the reality for Princeton then.
Half a century ago, the acute financial crisis facing Princeton and other universities was front page news in The New York Times. Higher education leaders worried about the solvency and growth of their institutions, and warned entire departments and schools could be cut while the construction of facilities and the introductions of innovations would be curtailed.

“We’re worried,” Princeton President Robert F. Goheen told the Times on July 13, 1970.

The article cited economic recession, inflation, declining investments, reduced government funding and stagnant alumni donations as the combination of reasons for the crisis. Princeton was a tuition-reliant university at the time, and its financial model was no longer sustainable.

All of that changed over the next 50 years, with the stewardship and growth of the endowment playing a key role in growing and transforming Princeton.

Today, the endowment is vital to the cutting-edge discoveries and life-changing opportunities that have impact well beyond campus.

We would love to converse with you about the future of your organization.

Contact us at 803-615-3037 ext. 1 or brandon@fortifyfoundation.com