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The Use of Endowments in Ministry

The Use of Endowments in Ministry

Christian schools have struggled throughout the modern Christian school movement to honorably compensate their teaching professionals while keeping tuition rates affordable. While most schools are supported by some limited fundraising efforts, a modest church contribution, and other miscellaneous income sources, the conclusion is undeniable that tuition provides the critical measure of support for the ongoing operations of the ministry.

An endowment can provide a much-needed source of income outside the school's current tuition-based budget. Unlike some of the unsatisfactory alternatives, an endowment will not require the school to risk compromising its quality (huge class sizes), its affordability (unaffordable tuition rates), or its autonomy (government funding).

Because endowments are sometimes perceived as complex and even mysterious, administrators may tend to dismiss the idea without further investigation. Eternal Vision is a ministry organization dedicated to teaching Biblical stewardship and building endowments for Christian school ministries, and the lessons we have learned along the way may help de-mystify the use of endowments in Christian school ministry.

The Endowment Concept

What is an Endowment?

In general, a financial endowment is a fund made up of donations to an institution made with the stipulation that the fund be invested, and the principal remain intact. This allows for the fund to have a much greater impact over a long period of time.

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.

Why should Christian schools consider using an endowment?

Ministries who have need for continued support will benefit from establishing an endowment to provide a perpetual cash stream to meet those ongoing needs.

Ministries like Christian schools often promote their 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 compensation of each teacher. Can all of the provision for market-level wages for a teacher come from tuition paid by the students in his or her class? Or would this require us to charge a tuition that is beyond the reach of many families; especially those with 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 parents. 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 and university has at least one endowment.

The world's largest educational endowment contains more than $34 billion! (Harvard University) 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?

Most Christian day schools have not been actively involved in establishing endowment funds. Is this true because endowments are wrong? I 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 and live by faith!" When I hear a statement like this it is only fair to ask the individual what they mean by "living by faith." Would they say:

"Living by faith means we will do nothing but wait until God miraculously places our provision into our hands," or

"Living by faith means we must live hand-to-mouth and consume every dollar we bring in"?

I believe it is more accurate to define "living by faith" as:

"Taking God at His Word and acting accordingly."

There is a big difference between the two mind-sets! 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.

The Biblical Basis For Endowments

Is the endowment approach a faithless approach? I think not. In fact, I am convinced that it is thoroughly a matter of faith. The issue of faith centers on God's provision.

In the context of our endowment work with ministries, Eternal Vision focuses most heavily on providing additional resources for educational 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 sources require faith.

We must trust God to provide for the financial needs of the ministry, whether through gifting or by the provision of students who will pay the tuition fees. As we have already seen, tuition alone can never provide the resources sufficient to honorably compensate the school's teaching professionals while keeping rates affordable.

The endowment approach requires prudent structuring of resources and trust in God to provide them. The resources come from gifting and good financial management. Both components are Biblical: Giving is certainly commended in Scripture. So is good management of our resources!

Consider the following passage of Scripture:

"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 KJV)

In order to be a faithful steward, both knowledge and attention must be given to 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 KJV). A wise leader 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 KJV). Saving and investing are both commended in Scripture. Spending every last dollar in hand is not a Biblical approach!

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 the positioning of God's resources. Consider this familiar cliché:

"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. The difference required is an ability of leadership to see past the immediate wants of the day to the long-term stability of future generations. Will you have the wisdom to take a multi-generational approach to your tenure in ministry leadership?


Eternal Vision, Inc. is a ministry dedicated to helping Baptist churches, Christian schools, and other ministries in teaching Biblical stewardship and building ministry endowments.

Attorney Matthew J. Davis is an expert in Christian education and ministry employment legal issues. He serves full-time as Corporate Counsel & Vice President for Eternal Vision and teaches Business Law as an adjunct professor at Maranatha Baptist Bible College. Attorney Davis grew up in Illinois where his dad pastored for nearly 20 years. Attorney Davis is admitted to practice law in Illinois, Florida, and Wisconsin.