The Fifth and Final Report of the SBC Funding Study Committee
To the Executive Committee of the Southern Baptist Convention
June 11, 2007

 INTRODUCTION and BACKGROUND

 The SBC Funding Study Committee (FSC) is an ad hoc committee of the Executive Committee, having been charged by action of the full Executive Committee in February of 2002 with the task of studying Southern Baptist Convention funding issues.  This final report represents the discussions and deliberations of the FSC during 2007.

 PRESENT COMMITTEE MEMBERS

 The present members of the SBC Funding Study Committee, and the staff liaisons to the committee, are listed below:

REPORT

This is the final report of the Funding Study Committee. This report provides a review of the disposition of all recommendations made by the committee to date and provides the Executive Committee with two final recommendations for consideration. This report brings into focus the following two areas of interest: Positioning Golden Gate Baptist Theological Seminary for a western growth strategy; and the unallocated CP distribution historically provided to GuideStone Financial Resources (.76%) of the 2007-08 CP Allocation Budget.

The Committee’s Purpose

The committee’s origin is rooted in the expressed financial needs of the Convention’s six seminaries. Its broader purpose is Convention-wide. We have been committed to enabling the Southern Baptist Convention to continue to enjoy the fruits of a healthy and vibrant seminary system throughout the twenty-first century and to making appropriate recommendations to that end to the extent possible within the limits of Convention polity, Convention intent, and sound biblical doctrine.

Completion Date

As stated earlier, this report is the final report of the FSC and the recommendations contained herein, as they may apply to the seminary funding formula, will become effective for the 2010-2011 budget year.

Committee Maintenance and Approval

The committee serves as an advisory body to the Executive Committee as a whole, and any recommendations or reports, such as those contained in this report and in the other reports it has made, must be rendered to, received by, and voted on by the entire Executive Committee. 

Review

The committee felt it appropriate, in this its final report, to review the disposition of all previous recommendations it has made to the Executive Committee. To that end, the following is provided:

Recommendations from the February 17-18, 2003 Report:

1. That the Executive Committee of the Southern Baptist Convention include in the 2003-2004 and 2004-2005 Cooperative Program Allocation Budget proposals the provision that the first $250,000 received above 100% of the budget be allocated to the SBC Operating Budget for use in developing programs for enhanced Cooperative Program education among seminary students at the six Southern Baptist Convention seminaries; and

1. That the SBC Funding Study Committee consult with the seminary presidents and Executive Committee staff to develop a mutually agreeable specific program proposal to be presented for approval to the SBC Executive Committee at its June 16, 2003, meeting.

Received as information by the Cooperative Program Subcommittee and then the Executive Committee on February 18, 2003 and then included in the 2003/2004 and the 2004/2005 CP allocation budgets. 

 Recommendations from Sept. 23, 2003 report:

1. That the Executive Committee in concert with the Great Commission Council call Southern Baptists to prayer concerning the serious decline in giving and the impact it is already having on our Convention ministries.
2. That the Task Force on Cooperation appointed by the Executive Directors of the Baptist state conventions and the Great Commission Council be asked to create a strategy to involve the leadership of all entities receiving Cooperative Program funds for the purpose of reaffirming the premises of the Cooperative Program, evaluating the effectiveness of the Cooperative Program, and strengthening Cooperative Program partnerships. 
3. That creating any additional special annual offering be discouraged in favor of making Christian stewardship and the Cooperative Program a top priority in Southern Baptist life over the next several years.
4. That the SBC Funding Study Committee, in conjunction with the Task Force on Cooperation, enlist and engage pastors across the Convention in creating a pastor-led strategy for re-invigorating stewardship and the Cooperative Program in the churches.
5. That the seminaries complete as rapidly as possible the implementation of the Cooperative Program course which has been funded by the Southern Baptist Convention. 
6. That the SBC Funding Study Committee work with LifeWay Christian Resources to find ways to have an annual emphasis on the denomination/Cooperative Program through the Sunday School and Discipleship materials. 
7. That the mission boards work with the Cooperative Program Development Division of the Executive Committee in a joint Cooperative Program/missions education process. 

The Executive Committee of the Southern Baptist Convention received as information the report of the SBC Funding Study Committee and adopted the recommendations therein on September 23, 2003.

Recommendations from the February 20, 2006 Report:

      1.   That the Executive Committee of the Southern Baptist Convention recommend to the Southern Baptist Convention meeting in Greensboro, North Carolina, June 13-14, 2006, that the Southern Baptist Convention request that the Executive Committee post the Organization Manual on the SBC.net website, and print it in the Southern Baptist Convention’s Book of Reports and Annual each year, to make as many Southern Baptists as possible aware of each entity’s assignment, and to provide a backdrop against which entity reports of progress and accomplishment can be made.

      2.   That the Executive Committee of the Southern Baptist Convention recommend to the Southern Baptist Convention meeting in Greensboro, North Carolina, June 13-14, 2006, that the Southern Baptist Convention request that the Executive Committee take the initiative in collaborating with each entity to develop appropriate metrics which can be reported consistently each year in the Ministry Reports and SBC Annual beginning no later than 2008, and which measure the value each entity adds to their Cooperative Program allocation in their respective areas of ministry assignment, all with the goal of engendering increased awareness of and trust in the Cooperative Program, and increased contribution through it.

      3.   That the Executive Committee of the Southern Baptist Convention recommend to the Southern Baptist Convention meeting in Greensboro, North Carolina, June 13-14, 2006, that the Southern Baptist Convention request that the Executive Committee and all SBC entities take every opportunity to explicitly remind all Southern Baptists and appropriate others of the Cooperative Program’s benefits by including motivating references to it noticeably and continually on all regularly issued printed materials, characterizing it as a most efficient way of funding worldwide missions and ministry, and directing readers to the Cooperative Program website to learn more about it.

The above recommendations were presented to the Southern Baptist Convention on June 13, 2006 and were all adopted.

 FINAL RECOMMENDATIONS:

First, the committee recognizes the unique challenges impressed upon Golden Gate Baptist Theological Seminary which are a consequence of its location. The committee is well aware that GGBTS’s main campus in Mill Valley, California is part of a community where the average residential property value exceeds $1,000,000.00 and that any reasonable commute to the Mill Valley campus begins in communities and neighborhoods with similar property values. This fact alone is a significant disincentive for growth and expansion on that campus. Obtaining adequate faculty and student housing is extremely difficult, undermining any meaningful growth strategy. The committee also understands the impact of the “main campus” cap on funded FTEs, and knows that this cap as applied to Golden Gate is inconsistent with a growth strategy that is required to support GGBTS and the large geographical region it now serves. GGBTS’s leadership and trustees believe that the best prospects for growth and service to the SBC are at the Brea campus in Southern California, as does this committee. A change to the seminary funding formula combining both the Mill Valley and Brea campuses into one main campus for the purposes of calculating main campus FTEs would result in a cap increase provided to GGBTS by the formula. Calculated for this year, the new cap increase would be an additional 44 FTEs. This action would not solve the housing cost around the Mill Valley campus, but it would begin to provide resources to fuel a needed growth strategy for GGBTS that could focus on the Brea campus.

RECOMMENDATION # 1

That the Executive Committee of the Southern Baptist Convention change the current seminary funding formulato combine Golden Gate Baptist Theological Seminary’s Northern and Southern California campuses into one main campus for the purposes of computing Golden Gate’s main campus Full-time Equivalents in the funding formula beginning in budget year 2010-2011.

Second, During the proceedings of the Cooperative Program Subcommittee, February 19, 2007, a final decision on a portion of the CP Allocation Budget (GuideStone Financial Resources’ release of $1,524,572.00 or .76% of the budget) was delayed until the subcommittee’s June 11, 2007 meeting pending input from the committee. The committee recognizes that the Ethics and Religious Liberty Commission is a vital component of our comprehensive world mission strategy, and a worthy beneficiary of a portion of the allocation budget released by GuideStone. The committee also believes that the 2007/2008 budget is an opportune time to benefit the SBC’s three smaller seminaries (SEBTS, GGBTS, and MWBTS). The SBC’s two-year budget process does not often provide this kind of flexibility. The committee acknowledges that the SBC’s two largest seminaries (SWBTS and SBTS) have significant endowments and are less cash constrained than the three smaller seminaries. And NOBTS continues to receive special handling and protection in the CP Allocation Budget through budget years 2008/2009. This action by the Executive Committee mitigates any real financial loss resulting from a lower FTE count lingering from the effects of Hurricane Katrina. The committee also recognizes that the Executive Committee accepted the new ministry assignment of Stewardship in June 2006 without any additional financial resources and that this transformational ministry must be resourced for success. Therefore, the committee is supportive of the following distribution for budget years 2007/2008 and 2008/2009:

Budget year 2007/2008.  Beginning in budget year 2007/2008, the committee recommends that the allocation for ERLC be increased from 1.49% to 1.65% (a .16% increase). This will result in a net increase to ERLC of $320,962.00. The committee also recommends that the allocation for the Executive Committee be increased from 3.32% to 3.40% (a .08% increase) for the expressed purpose of providing funds for the Stewardship ministry of the Executive Committee. This will result in a net increase of $160,480.00. Additionally, the committee recommends a one-time distribution to each of the SBC’s smaller seminaries as follows: $347,710.00.00 to SEBTS, $347,710.00 to GGBTS, and $347,710.00 to MWBTS. The above actions will allocate all of the CP receipts for budget year 2007/2008.

Budget year 2008/2009. ERLC’s allocation continues at 1.65% and the Executive Committee’s allocation continues at 3.40% with the remainder of GuideStones’ historical .76% allocation (.52%) to be included in the overall seminary allocation. This will result in an increase in the seminary allocation from 21.40% to 21.92 %. The committee believes that these percentages should remain in place for the foreseeable future.

RECOMMENDATION #2

That the Executive Committee of the Southern Baptist Convention adopt the Cooperative Program Allocation Budgets for 2007-2008 and 2008-2009 as reflected by the amounts and percentages shown in  Attachment 1.

EPILOGUE

The committee examined many complex issues during its deliberations. The issue of funding other than basic and advanced programs in our seminaries surfaced repeatedly, (basic programs are Masters’ degrees and advanced programs are Doctoral degrees). Stated another way, how can the SBC maximize the CP contributions invested in our seminaries? The committee recognizes that the Cooperative Program provides much-needed financial resources for all of the entities of the Convention. Since 1925, the beginning of our Cooperative Program, our entities have had important programs go unfunded because there are not enough CP dollars to meet all of the growing needs of the Convention. Compared to a base year of 1995, CP contributions have lagged behind the Consumer Price Index and inflation by approximately twenty-nine percent…while needs have outpaced contributions. Furthermore, the committee believes that the vast majority of Southern Baptists have an expectation that their CP contributions which flow to theological education produce graduates equipped for ministry and missionary service through basic and advanced programs. In light of that prevailing assumption, the committee believes that in the next decade, the Executive Committee must examine the allocation of CP funds to our seminaries from the perspective of those Southern Baptists. The current seminary funding formula enables significant dilution of CP dollars to be used for student categories other than the expected basic and advanced degree ministry students. These other programs include Baccalaureate degrees and diplomas, and other undergraduate non-degree producing programs.

Almost fourteen years ago, the seminary presidents found themselves concerned about the potential for unhealthy competition among the seminaries through unrestrained undergraduate programs. In the seminary presidents’ 1993 report, THE COLORADO CONCORD, they recommended that the number of allowable undergraduate hours be limited in the seminary funding formula to 70 to limit the proliferation of such programs and attendant competition and conflict. The committee is less concerned about the issue of competition and conflict among the seminaries than it is about the impact of funding undergraduate programs on the production of basic and advanced degree ministry graduates.

In 1999, the Council of Seminary Presidents (CSP) submitted the following: Response to the Seminaries Workgroup of the Executive Committee of the Southern Baptist Convention “Thus, the seminaries must place priority where the formula directs priority by funding…the seminaries make academic program decisions based upon the way the formula actually operates. If the limitations on off-campus hours had been higher, each seminary would probably have produced more off-campus hours. This follows the basic financial rule that production follows investment.”  The committee believes that what the CSP predicted in 1999 has occurred.

For the academic year of 2004-05, the seminaries produced 37,924 hours of undergraduate programs. This number is at the end of a continuous drift upward – a drift which has had a major influence on the allowable credit hours that define main campus FTEs. A systemwide review shows that of the total credit hours funded by the formula (180,059.25), 21% (or 37,924.75 hours) were for other than basic and advanced degree students. The 37,924.75 hours is the funded equivalent of a seventh SBC seminary and exclusively for programs other than basic and advanced degree ministry students.

Two additional factors have weighed heavily on the committee’s thinking. First, at the request of the seminary presidents in 1999, the Executive Committee froze the existing funding formula through budget year 2009-2010. Second, the long-term impact of Hurricane Katrina on NOBTS’ student enrollment is only beginning to be realized. Main campus enrollment at NOBTS for 2006 was 1,025 students, down significantly from pre-Katrina. Because of Katrina, the Executive Committee froze the FTE count for NOBTS through budget year 2008-2009 at its pre-Katrina three-year rolling average of 1,790.

The committee, therefore, believes it is in the best interest of the SBC to study a move toward funding only basic and advanced degree students through the seminary funding formula. Because of the broad-reaching impact on financial planning for the seminaries, the committee believes that such a study should be conducted in consultation with the seminaries and, if practicable, provide the seminaries seven to ten years of planning and preparation prior to any implementation.

This final report reflects our commitment to the Convention at large and to the seminaries in particular.

It has been a privilege to serve Southern Baptist and the Executive Committee as the committee chair. My constant prayer is for God to be honored and praised as Southern Baptists, cooperating together, reach the world for His Kingdom.

Respectfully submitted,
Bill Anderson

EXECUTIVE COMMITTEE OF THE SOUTHERN BAPTIST CONVENTION
NASHVILLE, TENNESSEE
2007-2008 SBC ALLOCATION BUDGET  

*Beginning in budget year 2007-2008, GuideStone Financial Resources reported to the Cooperative

Program Subcommittee that it no longer needed to receive its Cooperative Program allocation of .76% ($1,524,572.00). The CP Subcommittee delayed distributing the $1,524,572.00 until a recommendation was received from the Funding Study Committee. This final CP Allocation Budget reflects our consideration of the Funding Study Committee’s recommendations.

**The $1,524,572.00 is allocated as follows:  For budget year 2007-2008, ERLC’s allocation will increase from 1.49% to 1.65% (an increase of .16% or $320,962.00). For the expressed purpose of providing funds for its Stewardship ministry, the Executive Committee’s allocation will increase from 3.32% to 3.40% (an increase of .08% or $160,480.00). Each of our three smallest seminaries (SEBTS, GGBTS, and MWBTS) will receive a one-time distribution of $347,710.00.