A team in my congregation is working on changing the terms of our endowment. The process was set in motion by some large gifts that were made to the church: gifts that would increase our endowment from about $1.6 million to about $2.5 million. That is a significant chunk of money, and it caused the committee who handles our finances to ask if we were making the best use of these gifts.
I’ll get into the details of the changes that they’re making another time. For now, I want to focus on a question that’s come up a couple of times, and that I’ve heard come up in other congregations when they talk about the blessings (and potential curses) of a large endowment.
If we have an endowment that can actually fund our ministry teams, won’t people stop giving?
And that question made me think about Harvard.
In 2020, Harvard’s endowment was valued at about $41.9 billion. Now, a lot of that’s restricted to specific departments and programs, but that’s still a lot of money. In that same year, the distribution from that endowment made up 37% of Harvard’s revenue!
But Harvard, certainly, doesn’t look at its endowment and think that people won’t give because of it. Harvard still charges tuition ($918 million in 2020) and asks alumni, donors, and others to give ($486 million in 2020). And, of course, it also gets money from other sources.
If Harvard can have an almost unimaginably large endowment—the kind of endowment that, you might think, really would make people stop and ask whether the university needs more money—and still raise money, then why are churches so worried about much smaller endowments that don’t cover nearly as much of their budgets?
I think it comes down to this:
Most churches don’t like to ask for money, and when a church gets a big enough endowment, it thinks that it can stop doing the thing that it doesn’t want to do. So it stops asking for money. And, as every fundraiser knows, the number one reason that people do not give is that no one asks them to give.
Harvard, of course, has never stopped asking for money. No university will ever stop asking for money.
The upshot of this is that no matter how big a church endowment gets, as long as congregational leadership asks people to give and shows people that their gifts make a difference, people will keep giving. Even a big endowment—even a $50 billion endowment—can exist alongside strong fundraising and good stewardship.The upshot of this is that no matter how big a church endowment gets, as long as congregational leadership asks people to give and shows people that their gifts make a difference, people will keep giving. Click To Tweet
Also, a quick note for any fundraising nerds out there. The terms of my congregation’s endowment were all set by the congregation (not the donors), no one has given directly to the endowment since it was set up, and the terms of the endowment explicitly allow for the congregation to change them. So there’s no danger of running up against donor intent here.