Properly Managing Property 

Ensuring Today’s Growth Doesn’t Strain Tomorrow’s Resources

By Brandon Allen
Executive Director | Fortify Foundation

I recently had a conversation with a school that was in the balance of managing short term growth with long-term sustainability in mind. We often miss some incredible opportunity to do this in the midst of building projects and campaigns. Fortunately, the board was in the process of counting the costs and had produced some tangibles to redirect some of the short-term funds into an endowment fund. Through the conversation, I was reminded of a quote I had come across well over a decade ago.  

“It is easier to build two chimneys than to keep one in fuel” 

This phrase from Poor Richard’s Almanac (aka Benjamin Franklin) captures the timeless truth about growth, spending, and even sustainability. It highlights well the foundational principle that acquiring “assets” is often far easier than sustaining them.  

Let’s consider a few facets that we all should bring to consideration: 

1. Capital vs. Operating Costs 

The ‘building of a chimney’ would be the equivalent of a capital expenditure in our school’s terms. In keeping things straightforward, a typical capital expense requires we go beyond our operating costs and raise monies to pay for this ‘one-time’ expense. It is truly one of the most exciting things we get to experience as administrators when we come to the end or completion of a campaign and can participate in the ribbon cutting ceremonies! However, it’s shortly thereafter that we run into the next stage of the expenditure. It’s keeping that “chimney” fueled so it can continue to do what it was originally created for. This is something that requires ongoing finances / resources. This incredible proverb reminds us that focusing solely on just the initial acquisition of the asset without considering the ongoing costs for its use and continued maintenance can prove to be futile. This ‘asset’ now falls into the ongoing operating costs that we must account for.  

2. The Appearance of Affordability: 

The true cost of ownership can sometimes be miscalculated or is often underestimated until well after the project is completed. And rightfully so! It will always be easier to construct multiple “chimneys” than to keep one fueled with firewood or coal over time. We discover this in our day to day lives when we discover it is often easier to buy property, cars, or equipment than to bear the recurring costs of taxes, maintenance, and utilities. The well-established phrase “welcome to home ownership” stands for this reason. Just this last year our neighborhood faced the major expense of rebuilding a dam to save our pond. When we moved in, I can assure you this was never something that we thought we’d have to face. This comes on the backbone of another phrase often used by financial planners called the “affordability trap”. The concept of owning something that looks impressive initially but drains resources continually. When looking to buy a house in the last few years, my wife and I were approved to buy at a certain rate. While I would have loved to buy a house in that range, we chose to buy something that was around half of what we were approved for. Even then, the costs we often face remind us of the prudence in affordability. Sure, we could have bought a nicer chimney, but the strain of fuel would have been more than burdensome.  

3. Cash Flow Management: 

Poor Richard also emphasizes the importance of cash flow over capital in this wonderful analogy. While we need our facilities to reach the student bodies God has entrusted to our care, true financial health depends on managing the ongoing expenses. In this arena he notes, “a small leak will sink a great ship”. This serves as a powerful reminder that seemingly minor financial issues, if left unchecked, can cause major ruin. Just as a ship’s strength means nothing if a small leak goes unrepaired, seeming financial success at a point in time can prove a sure collapse later on under the weight of neglected details. Cash flow is the lifeblood of our schools. If an expense goes unmonitored, a fee neglected, liquidity restricted, the seeming small leak will rear its ugly head sure enough. It’s these seeming minor expenses that can sometimes either erode or build our sustainability over time. I imagine we all can think of ministries who have fallen into this trap at one point or another. We must be diligent to create a long-term cash flow to ensure those additional costs never become burdensome or perhaps be the very thing that challenges our future financial viability. Higher educational institutions know this and often build endowments into their building campaigns at inception to ensure that these additional costs are either completely taken care of or at least subsidized in the future through the perpetual cash flow it creates.  

As you consider this phrase for your own circumstances, consider it a wise caution: success isn’t measured by what you can build, but by what you can sustain. The underlying premise for sustainability is not just accounting for what is owned, but for the resources required both to operate and preserve those assets. 

Wise financial stewardship means we shouldn’t stop with the question, “Can we buy this?” but rather, “Can we keep this running without draining our resources?”