Sixth and Final Report of the SBC Funding Study Committee

Sixth and Final Report of the SBC Funding Study Committee
to the Executive Committee of the Southern Baptist Convention
February 19, 2008

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

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

This report provides a brief summary of the work of the Funding Study Committee and highlights three issues which call for further study - and perhaps action. They are (1) determining the impact of prebaccalaureate and baccalaureate programs in our six seminaries on minister production; (2) finding ways to intentionally and effectively track graduates to facilitate assessing ministry assignment fulfillment; and (3) assessing whether instituting a qualification process to better dispense tuition discounts would be helpful. This is the final report of the Funding Study Committee.

During the September 17, 2001, meeting of the Seminaries Workgroup, a motion was made for the workgroup to consider studying the issue of seminary faculty salaries with a view to finding a way to increase them. The workgroup agreed to investigate the matter and deferred any action until its February 19, 2002, meeting. During its February 18-19, 2002, meeting, the Executive Committee adopted the following recommendation:

That the Executive Committee of the Southern Baptist Convention recommend, in light of the financial challenges to the seminaries, the Executive Committee chairman appoint a committee to study SBC funding issues; and

That the SBC Funding Study Committee report to the Executive Committee in its September 16-17, 2002, meeting.

The Committee’s origin was rooted in the expressed financial needs of the Convention’s six seminaries, but its assignment by the Executive Committee was to study Convention-wide funding issues. That not withstanding, the FSC diligently examined funding issues related to the SBC’s seminaries, because the Committee is convinced that the future of the Convention depends a great deal on constantly maintaining a healthy and vibrant seminary system. Therefore, and to the extent possible, each recommendation that the Committee made was aimed toward that end within the limits of Convention polity, Convention intent, and sound biblical doctrine.

Presently, a Cooperative Program course is taught at each of our Southern Baptist seminaries. The intent of this course is to improve the training of seminary graduates. Before the course was instituted, it seemed that many graduates were not knowledgeable of the value of the Cooperative Program (CP). This course highlights the strategic role of the CP in funding initiatives that enable every cooperating church, regardless of size, to participate in the fourfold missions assignment of Acts 1:8.

The text for this course is entitled One Sacred Effort, written by Dr. David Hankins, a member of this Committee and previous Vice President of Cooperative Program for the Executive Committee, and Dr. Chad Brand, Associate Professor of Christian Theology at The Southern Baptist Theological Seminary and Associate Dean of Biblical and Theological Studies for Boyce College. Additionally, a companion workbook developed by Dr. Brand is now available for use.

The Committee expects that the use of such materials in persistent and intentional Cooperative Program instruction, when taught completely, universally, and uniformly, will reap a harvest of more thorough and widespread Southern Baptist loyalty to giving through the Cooperative Program to take God’s Word to the ends of the earth. The Committee believes that the long-term impact of aggressive promotion of the Cooperative Program by our seminaries will help provide our churches with Cooperative Program advocates throughout the twenty-first century.

The Funding Study Committee recommended to the Executive Committee (approved in June 2007) that the Executive Committee resolve a major issue associated with Golden Gate Baptist Theological Seminary’s (GGBTS) ability to grow strategically. The Committee recognized the unique challenges impressed upon Golden Gate Baptist Theological Seminary as a consequence of its location. The average residential property value exceeds $1,000,000, and 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 the Mill Valley 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. The approved recommendation changes the seminary funding formula, combining both the Mill Valley and Brea campuses into one main campus for the purposes of calculating main campus FTEs, resulting in a cap increase provided by the formula. This action will provide resources to fuel a needed growth strategy for GGBTS.

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’ voluntary permanent relinquishment of its .76% of that budget) was delayed until the subcommittee’s June 11, 2007, meeting pending input from this Committee. The Committee noted that the SBC’s two largest seminaries (SWBTS and SBTS) have significant endowments and are less cash constrained than the three smaller seminaries (SEBTS, GGBTS, and MWBTS). The Committee also noted that NOBTS continues to receive special consideration and protection in the CP Allocation Budget through budget years 2008-2009. Therefore, the Committee viewed the 2007-2008 budget year as an opportune time to specially assist the SBC’s three smaller seminaries. Additionally, the Committee recognized 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 recognized that the Executive Committee accepted the new ministry assignment of Stewardship in June 2006 without additional financial resources, and that this transformational ministry must be resourced for success. The Executive Committee approved the following action recommended by the Funding Study Committee:

Budget year 2007-2008. A one-time distribution (for this budget year only) will be made to each of the SBC’s three smaller seminaries as follows: $347,710 to SEBTS, $347,710 to GGBTS, and $347,710 to MWBTS. The allocation for ERLC is increased from 1.49% to 1.65% (a .16% increase). This will result in a net increase to ERLC of $320,962 for this budget year. The allocation for the Executive Committee is 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 results in a net increase of $160,480 for this budget year.

Budget year 2008-2009. ERLC’s allocation will continue at 1.65%, and the Executive Committee’s allocation will continue at 3.40%. The remainder of GuideStones’ historical .76% allocation (.52%) is added to the overall seminary allocation, increasing the seminary allocation from 21.40% to 21.92 %. These percentages should remain in place for the near future.

The Committee felt it appropriate to provide the disposition of all previous recommendations it has made to the Executive Committee, below.

Recommendations from the Funding Study Committee’s Second Report, February 17-18, 2003:

Disposition: The above recommendations were adopted by the Executive Committee on February 18, 2003. (See 2003 SBC Annual, page 111, and then included in the 2003-2004 and the 2004-2005 CP allocation budgets by the Convention.)

Disposition: 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. (See the 2004 SBC Annual, pages 129-131, and for results see the 2006 SBC Annual report, pages 170-198.)

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 Web site 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 the most efficient way of funding worldwide missions and ministry, and directing readers to the Cooperative Program Web site to learn more about it.

Disposition: The above recommendations were adopted by the Southern Baptist Convention on June 13, 2006. (See the 2006 SBC Annual, pages 94, 161, 204, and 205.)

Recommendations from the Funding Study Committee’s Fifth Report, June 11, 2007:

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.

2. That the Executive Committee of the Southern Baptist Convention adopt the Cooperative Program Allocation Budgets for 2007-2008 as reflected by the amounts and percentages shown in the Attachment [to the Fifth Report and as shown on page 3 of this report].

Disposition: The Executive Committee of the Southern Baptist Convention adopted the recommendations on June 11, 2007. Recommendation 2 was included in the 2007-2008 Cooperative Program Allocation budget adopted by the Southern Baptist Convention on June 12, 2007. (See 2007 SBC Annual, page 59.)

This report is the final report of the Funding Study Committee and concludes the business and deliberations of the Committee, subject to the approval of the Executive Committee.

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 previous reports, must be rendered to, received by, and voted on by the Executive Committee.

First Observation: The Committee reviewed the percentage of total hours devoted to other than basic and advanced degree programs. (A basic program is at the master’s degree level, and an advanced program is at the doctoral degree level.) The Committee believes most Southern Baptists expect their offerings to be used primarily to fund such graduate level instruction. While the income generated by inclusion of other than basic and advanced degree programs is significant enough to consider it a worthy part of a seminary’s funding stream, the Committee wonders whether the escalation of instructional hours for other than basic and advanced degree programs may over time undermine the priority of producing graduate level ministerial training.

Almost fourteen years ago, the seminary presidents found themselves concerned about the potential for unhealthy competition among the seminaries through unrestrained expansion of 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 potential for adverse impact on ministerial production by growth in undergraduate programs.

Beginning in 1986-87, an examination of prebaccalaureate and baccalaureate hours as a percentage of total hours produced by the seminaries with a corresponding look at total Master’s and Doctoral Degree production reveals the following:

Year	Total Pre B & Bacc Hours	Total Hour Production	Percentage of Pre B and Acc of Total	Total Master’s and Doctoral Degree Graduates	Total Seminary CP Disbursements
1986-87	23,106	225,548	10.24%	2,168	26,348,886
1987-88	23,479	219,411	10.70%	2,142	27,868,985
1988-89	25,225	201,132	12.54%	1,988	25,972,643
1989-90	28,871	201,399	14.34%	1,966	28,658,041
1990-91	24,452	190,566	12.83%	1,881	29,667,264
1991-92	26,177	190,442	13.75%	1,756	28,274,828
1992-93	28,502	192,319	14.82%	1,707	28,067,651
1993-94	31,098	194,702	15.97%	1,662	30,053,567
1994-95	32,249	192,253	16.77%	1,739	30,846,957
1995-96	42,828	192,725	22.22%	1,735	32,884,225
1996-97	41,937	192,486	21.79%	1,638	35,060,682
1997-98	46,777	197,537	23.68%	1,542	38,476,647
1998-99	43,192	200,067	21.59%	1,531	38,067,064
1999-00	44,083	198,662	22.19%	1,624	38,361,017
2000-01	46.628	204,412	22.81%	1,788	39,119,069
2001-02	54,521	207,780	26.24%	1,820	41,447,091
2002-03	58,240	219,177	26.57%	1,827	40,307,205
2003-04	61,856	231,136	26.76%	1,961	41,156,945
2004-05	56,398	224,762	25.09%	1,943	40,881,275
2005-06	47,959	213,630	22.45%	1,878	43,322,085

The above chart illustrates the Committee’s concern. Had the Committee existed in 1999 and reviewed such statistics then, the issue would have seemed more compelling due to the steady decline in graduate degree production up to that point against a history of undergraduate program expansion during the same period. Since 1999 graduate degree production has begun to increase once again, though perhaps not in direct proportion to that experienced in the undergraduate area.

To further illustrate the point, four of the SBC’s six seminaries produce significantly fewer total hours than the combined 47,959 hours allocated to the production of prebaccalaureate and baccalaureate hours. The significance of this fact is that the Convention is funding the equivalent of a seventh seminary exclusively for prebaccalaureate and baccalaureate programs. The above system-wide review shows that of the total credit hours funded by the formula for the last five years, twenty-five percent (25%) of those hours were undergraduate hours, which may or may not have formed a platform for ministerial graduate degrees.

Therefore, the Committee feels attention should be intentionally directed to determine the impact of undergraduate programs upon graduate degree production figures over the next several years. Additionally, as those production figures are assessed, a simultaneous study should be undertaken to determine how best to direct (or redirect) CP funds to assure a ratio of conferred ministerial graduate degrees to CP funding that is optimal and sustainable.

The Committee is voicing its concern now because we believe that during the next ten years, the potential exists for the growth of prebaccalaureate and baccalaureate hours to cause harm to the optimal and sustainable ratio of graduate degree production by our seminaries, and we believe that in the budget year 2012-13, the Executive Committee should begin to assess this potential harm.

That the Executive Committee of the Southern Baptist Convention appoint a special committee beginning in budget year 2012-2013, to study and review graduate degree production by the seminaries of the Southern Baptist Convention and the impact of prebaccalaureate and baccalaureate programs upon that production, and make appropriate recommendations to assure a ratio of conferred ministerial graduate degrees to CP dollars is optimal and sustainable.

Second Observation: The Committee recognizes that there are several ongoing processes to strategically evaluate our seminaries, including those required for accreditation by the Association of Theological Schools. One of the Convention’s seminary presidents recently said that every student who graduates from his seminary is expected to be a missionary on the international field or actively supporting the global Great Commission task from North America. The Committee agrees with and applauds that understanding of theological education and its purpose. We pray for God’s continued care of that effort.

There is, however, an apparent reluctance of our seminaries (with one exception) to measure the extent to which seminary graduates are fulfilling that stated purpose of serving in our churches and on the mission field. When the Executive Committee asked the seminary presidents a broad range of questions about employment rates of graduates, the presidents declined to answer, citing reasons such as a violation of Baptist polity, church autonomy, or the privacy act. The Committee understands that some of the questions posed may have ranged beyond the purview of available information, but believes strongly that the four questions listed below are clearly within the scope of information that is useful and reasonable for the SBC to know to what extent expectations are being met. The coherence questions follow:

- What percentage of ministry graduates from the class of [ten years ago] are still in the ministry today?

- What percentage of ministry graduates from the class of [five years ago] are still in the ministry today?

- What percentage of ministry graduates from the class of [last year] went into the ministry?

- How many graduates of your undergraduate class of [last year] enrolled in a basic degree program?

Other colleges and universities routinely report the percentage of graduates hired after graduation or the number of alumni accepted into a particular field of study. With a total number of only about 2,000 graduates per year spread across six alumni offices, the Committee feels that this information is both ascertainable and vital to helping Southern Baptists see and understand how their Cooperative Program dollars are multiplied through effective ministry of the ministers and missionaries trained by our seminaries. In any given year, the seminaries simply need to track the present ministry positions of three graduating classes – from ten years previous, five years previous, and the previous year.

Therefore, in keeping with the Convention’s stated desire that such statistics be collected and presented (see item 160 in the 2007 SBC Annual), the Committee makes the following recommendation:

That the Executive Committee of the Southern Baptist Convention specifically request the seminaries of the Southern Baptist Convention to conduct a survey of their respective alumni every odd numbered year to determine the following, as well any other pertinent statistics, and report the results as part of their ministry report for that year:

Third Observation: The Committee believes that the vast majority of Southern Baptists expect that their CP dollars go to support theological and ministerial training of God-called students coming from Southern Baptist churches. Historically, Southern Baptist churches have been those churches in “friendly cooperation with the Convention and sympathetic with its purposes and work,” and who have been “a bona fide contributor to the Convention’s work during the fiscal year preceding” (see SBC Constitution, Article III.1).

The Committee has reviewed numerous examples of churches employing what appears to be token or artificial affiliation with the Convention as a means of securing a Cooperative Program tuition discount for a member of the church. Clearly, some of these churches have no awareness or understanding of who Southern Baptists are or how Southern Baptists operate. For example, the Executive Committee routinely receives letters from established churches with no prior SBC affiliation at any level (associational, state convention, or SBC) with an enclosed check designated as the annual “dues” to be an SBC church. Some churches have enclosed checks designated to a particular seminary where a church member has recently enrolled. Some are so bold as to write a note indicating the accompanying check is given so the church can qualify to receive the Cooperative Program discount given to students from SBC churches. Some letters even indicate that, on occasion, a seminary staff member, usually named, assisted, or advised the church on the above-stated process of minimal affiliation.

Obviously, such actions by a church are questionable at best. More important to this study, however, is the effect of such actions. Tuition discounts inappropriately obtained by such actions have the net effect of diluting potential revenue to one or more of our seminaries and diminishing the reach of CP funds to help underwrite the costs of operating our seminaries for service to ministers called from established SBC churches. The Committee encourages the Council of Seminary Presidents to work with the Executive Committee to develop a policy of granting the CP tuition discount in some manner designed to assure that the relevant church’s affiliation with the SBC is genuine.

That the Executive Committee of the Southern Baptist Convention, in consultation with the Council of Seminary Presidents, develop a plan by which the application of Cooperative Program support through tuition discounts be granted only to students from bona fide SBC-affiliated churches with a proven track record of support for the Cooperative Program and other SBC causes or, in the case of new churches, an expressed understanding of and commitment to the mission and purposes of the Southern Baptist Convention.

The Funding Study Committee has been committed to helping ensure that our seminaries be on the best financial footing possible to continue to provide outstanding theological education. The Committee believes that continued Cooperative Program funding is the best means of insuring success. Our seminaries are led by principled men with unswerving allegiance to the Lordship of Jesus Christ and the full trustworthiness, authority, and inerrancy of His Holy Word. Our seminaries are unexcelled in the provision of low-cost, high-quality theological education and ministerial preparation, steeped in sound doctrine and centered on Biblical authority, and are thus worthy recipients of our full support verbally and financially. It is the prayer of each member of this Committee that the efforts of this Committee will produce tangible, substantial, and long-term benefits for our Convention, for Southern Baptists individually and collectively, and for the cause of Christ around the world.

That the Executive Committee of the Southern Baptist Convention receive this, the Committee’s final report, and in so doing, declare the assignment of this Committee to have been completed.

On behalf of all former and current Committee members, it has been an honor serving the Executive Committee and the Southern Baptist Convention.