One evangelical seminary fell victim to the American economy's recession in 2008, while others teetered on the brink of collapse or faced serious cutbacks.
Salt Lake Theological Seminary, the only Christian graduate school of theology in Mormon territory, closed in late October after a benefactor reneged on a large donation and attempts to secure grants from charitable foundations failed. Faculty and staff agreed to work without pay through December so that the seminary's 54 students could finish the semester.
The financial crisis may take down other seminaries in 2009 if the stock market does not rebound. The Association of Theological Schools (ATS) assessed the financial vitality of member schools in 2007 and discovered significant weaknesses.
About 20 percent of all seminaries unrelated to a college or university operated with deficit budgets three of the last five years, according to ATS spokeswoman Eliza Smith Brown. These schools had less than one year of operating expenses in reserve.
"This means that even in the good economic times of the previous four years, many schools operated successfully but on the economic edge," she said.
With the stock market dropping 50 percent by November from its October 2007 peak, schools that rely on endowment income remain the most vulnerable. Dennis Hollinger, president of Gordon-Conwell Theological Seminary, said the school lost $600,000 in endowment income in 2008. Some restricted endowment gifts have gone "under water," meaning they are now worth less than the original gift, and the seminary cannot spend from the principal.
Hollinger said the Massachusetts school has cut close to $1 million from its budget of $20 million by canceling activities, realigning programs, and declining to ...1