Readers, please accept this invitation to communicate with “Soundings,” either to react to articles in this issue of In Trust or to comment on other issues of concern to leaders in theological education. Feel free to be provocative, but do limit your letters to a maximum of 350 words. All letters are subject to editing. Our e-mail address is <editors@intrust.org>.

Is it Discounting?
Looking at the Evangelical Lutheran Church in America’s Fund for Leaders in Mission program in light of Kenneth Briggs’ article, “Tuition Discounts: A Good Thing or Not?” (Summer 2001), raises the question: Is the ELCA’s Fund for Leaders in Mission a form of tuition discounting and, if so, is it an effective educational policy—a “good thing”?

First, what is the Fund for Leaders in Mission? The fund was created by the ELCA’s Churchwide Assembly in 1997 as a mechanism for providing financial support to seminarians. The goal of the fund is to build an endowment large enough to support full tuition for all ELCA ministry candidates enrolled at ELCA seminaries.

Is the fund a form of tuition discounting? Given the broad-sweep definition of tuition discounting in the Brigg’s article, the answer is clearly, “Yes.” Briggs defined tuition discounting as any form of financial aid that (1) is not need-based and (2) does not have to be repaid. When fully implemented, the fund will do exactly that: support fully-funded tuitions for all qualified seminarians regardless of need. The ELCA also hopes that the fund will enable this church to realize two of the benefits of tuition discounting or merit aid, as noted in the Briggs article: (1) the attraction of qualified and able ministry candidates, (2) who are enabled to study in residence on a full-time basis.

Nonetheless, other than these formal similarities, the fund does not have much in common with other merit-based scholarships or tuition discounting. It is in these differences that we believe the fund to be excellent education policy for the ELCA.

First, like effective tuition discounting, the fund will provide a new and regular stream of financial support for our seminaries, but this stream will not be generated by radically increasing the number of students paying partial tuition. We will not be doing the equivalent of filling seats on airplanes with partial fares. The fund will support and affirm the vocations of those already in our ministry education and preparation system. The fund will likely serve as a welcome tool for increasing the numbers of ministry candidates at our seminaries, but the primary goal of the program is not an immediate, sharp increase in enrollments.

Second, the fund will provide this new and regular financial stream to all our seminaries; that is, it is not a mechanism to compete for students. The fund is designed to support our national, interdependent system of theological education, not to buy a student body for any of our schools. The fund is intended to provide relief to an increasingly problematic component of our system, namely, the rising portion of educational costs being borne directly by our seminarians.

We call this the Fund for Leaders in Mission for a reason. The fund is the church’s response to provide a new and necessary source of revenue for our mission-driven system of theological education. The “merit” we are rewarding through the fund is our students’ vocations and the seminaries’ commitments to serve the mission of the church.

In establishing this fund, the ELCA has had to commit itself to new forms of work somewhat alien to our church culture. First, since tuition now plays a more significant part of the financing of theological education than in the past, we not only need to find a way to fund this cost, but we need to work hard not to convey to our congregations that the full cost of seminary education is funded if tuition costs are covered. Second, the fund is another step taken by the ELCA—along with the rest of North American theological education—into multiform “gifts and grants” mechanisms for funding theological education. This is new territory for a church committed historically to more centralized means of funding seminaries, and it will require new leadership skills and wisdom.

—Mark N. Wilhelm
Chicago, Illinois

Mark N. Wilhelm is associate director for theological education of the Evangelical Lutheran Church in America.

Responsible Investing
The current quandary vexing all institutional investors is, of course, also troubling seminary trustees. Are we facing up to our fiduciary duty in monitoring endowment portfolios when values are down in distressing amounts? If misery loves company, the great majority of school portfolios share the pain.

One axiom is to stay in touch with the fund’s professional managers. It is a good time to clarify and evaluate the fund’s goals. Are the fund’s managers in congruence with the equity/fixed income ratios set by the Trustees? Is the asset allocation, the risk/return objective, and the income objective clear on both sides? The question of the moment is how quickly managers should re-balance portfolios when the equity side is depressed. This may be an opportune moment to add to equity holdings since they are likely to be undervalued in the asset mix at present.

Most institutional investors, though quite aware and alert to the current market, have developed the virtue of patience. They know, in the old Wall Street axiom, “you can’t fight the market.” A diversified portfolio has some defensive characteristics, but the guiding principle is the fact that these are permanent funds. The trustees can wait for the recovery, which always comes, albeit slowly. Apart from some temporary, or working capital funds, these assets, especially in the minds of original donors, are there forever. It is thus most prudent for trustees to invest for the long run and for total return.

In addition to being actively in touch with the fund’s managers, trustees should annually review the draw rate taken from the funds. This rate should not be driven by the school’s needs, but rather by long-term trends in the return on the portfolio adjusted to reflect inflation rates. While providing a fair return for school operations, many endowment portfolios have grown more from internal gains than from fund-raising additions.

Long-term investors know that markets go down. But historically they go up more than they go down. Pay attention, monitor, adjust, but the most important attribute will be patience.

Richard E. Ice
Alameda, California

Richard E. Ice is the chair of the business and investment committee at Graduate Theological Union, Berkeley, California, and a trustee and past chair of the board of American Baptist Seminary of the West, Berkeley, California.