By Brandon Allen Executive Director | Fortify Foundation
We’ve all seen it. The ups and downs of a ministry as they pass on the reins of leadership to their successor. It’s not always that those replacements are bad leaders or even wrong for the position. It’s just that they have a different skillset and often a different focus. One may be an excellent administrator but a terrible fundraiser. Another may be a strong communicator and the other a repulsive relationship builder. Hopefully, at any point in time, the current role is filled with somebody who has a combination of assets that can contribute to the greater ministry. Additionally, on a side note, hopefully they recognize their weaknesses and fill the gaps with staff that can help them successfully navigate those areas of need.
But we all notice the shifts in influence that take place during these times of transition. Some of those areas can’t be helped as it’s just a natural reflection of the individual at the helm. Although some of these transitions may not seem the best in the moment but end up being exactly what is needed for the long term. I’ve talked to countless leaders who recognize their season of leadership at certain organizations was just for the sake of instituting change (which no one liked in the moment, but it helped pave the way for future leaders to be more successful in their roles at the same organization).
Amidst these times of adjustments, the one thing that should never change is the ability to accomplish the job with the proper resources. It’s always sad when someone must go back in time and reformulate a once strong, thriving ministry to get it back to a healthy operational level.
This is where every organization can benefit greatly from a finance aficionado. Someone who eats, sleeps, and breathes budgets. Someone who knows how to flip a financial position around. But what happens when that person passes it on? Who’s to say what is created today is kept tomorrow?
This is what Fortify Foundation is ultimately interested in. We want to help you develop a strategy that lives well beyond any of our tenures. A strategy that provides financial flexibility and sustainability that hasn’t been seen before in the majority of Christian educational organizations. We understand the typical discussions that take place internally when it comes to finance. We often struggle with how high we can raise tuition, keep our students, offer financial aid, maintain our facilities, and pay our teachers a decent and fair wage. To further dive into what these conversations look like, we find ourselves asking a series of questions: Where can we find teachers who are willing to take a loss for the sake of our mission? Who would be willing to contribute on behalf of others to meet their financial needs this year? How can we keep our facilities attractive enough to justify the additional expenses that our students are paying for? What programs can we offer that help our students gain an incremental advantage for future careers in whatever God may call them to?
Have you ever found yourselves asking these questions? It’s the same conversations we’ve had for a while just compounded in expense.
So, what is the solution? (genuinely, I want you to pause and consider what your organization is actively doing in this area)
As you consider your solution, the next question(s) you should ask is, what is the longevity to that plan? Will this solution get you through this next year? Perhaps, it will help you get through your tenure? Are there any other possible solutions that will provide true long-term support that will provide exponential growth that will address problems and fight future extraordinary circumstances and inflation?
IF your solution or safeguard has either been a continued increase in tuition OR building a savings account, then you’ve missed a tremendous opportunity. The real solution can only be provided with a proper understanding of money. An underlying operation in finance is that your money today is worth more than money in the future because of the income and growth you can create from that same money today. We understand this all too well when it comes to things like debt. This is why our lenders are willing to give up their “assets” to you now because it will create more for them in the future. We just need to apply their principles to our own institutions to generate our own future income. If we had the ability to generate revenue streams now that wouldn’t add more to our already full plates or compromise our mission, then we’d be happy to do it! This is what we want to happen for all Christian schools.
Financial trader Tim Smith affirms this with the fact that “Endowments are such an integral part of U.S. academia that the size of a school’s endowment can be a fair measure of its well-being. They provide colleges and universities with the ability to fund their operating costs with sources other than tuition and provide a rainy-day fund.” (https://www.investopedia.com/terms/e/endowment.asp)
If I told you that an endowment’s income could help you significantly lower tuition costs and allow your teachers to be paid more, would you do it? For example, if you built a fund that had a 4% spending limit that would subsidize 10% of your operating budget, would that make a difference? Not only that, what if year over year, that 10% eventually moved to 15%, 20%, etc. How much more would you be capable of doing in accomplishing your goals?
The problem in part, is our limitations have always been our limitation. In our world, resources always operate as a limited commodity. Sure, there is an availability for more but we’re still restricted. We can’t operate at a high capacity such as a Harvard or Yale regardless of your school’s size. This means that our ability for high-capacity marginal return rates is limited. Even though you may not need a multi-billion-dollar endowment because of the scale of your organization, you still would love to take advantage of the margins they have in their investments. Whether your fund starts out at $1,000 or $1,000,000, you know the rate of return is going to be limited comparatively. Even if you were capable of a multi-million-dollar fund in the future, it still wouldn’t produce what the Ivy League schools have produced. This is the gap that Fortify Foundation is filling. A higher-level institutional strategy that no one school can accomplish on its own. If 50 schools each established their own fund at $10,000, they each would be invested at a $10k number. However, if they took advantage of a componentfund strategy, they each have $10,000 funds invested at a $500,000 rate. So, regardless of whether you are starting today, or have a well-built fund, the margin of return increases due to the ability in diversification.
As you explore the concept of endowment, we would love to have a conversation with you and your board about how this can create a more sustainable future for your school!
Contact us at 803-615-3037 ext. 1 or Click HERE to schedule a call.
Brandon Allen is the Executive Director for Fortify Foundation. Fortify is a strategic ministry partner formed exclusively to benefit Christian education. Brandon, and the Fortify team, is ready to help you, your donors, and stakeholders through fundraising, capital campaign management, and endowment support to benefit your short and long-term financial goals.