Lexington seminary declares financial emergency

From the Louisville Carrier-Journal:

Lexington Theological Seminary has declared a financial emergency due to a "tsunami of economic disasters," and it plans to cut staff and reorganize to ensure survival after nearly a century and a half of operation.

The school, the oldest denominational seminary in the Indianapolis-based Christian Church (Disciples of Christ), started the school year with 120 students and took the emergency measures after seeing its endowment shrink from $25 million to $16 million since July 2007.

"Though this is a painful process, it does provide an opportunity for the seminary to sort of re-imagine and reinvent itself at a time when it's absolutely essential for the future of this kind of education," President Jim Johnson said today.

Johnson said he's still studying how many positions the seminary will cut, but layoffs are essential for the school to stop spending out of the endowment principal.

The seminary has 10 full-time professors and 21 other full-time staff members, plus part-time instructors.

By declaring a financial emergency — an official declaration that the seminary's survival is at stake — the seminary board of trustees authorizes the seminary to cut tenured faculty positions.

Johnson said many of the Lexington seminary's plans are still in flux because of the sudden impact of a "tsunami of economic disasters that we have not seen in our lifetimes."

"It's hard for people who don't live in this kind of institutional environment to understand how fast this occurred" during last fall's global financial meltdown, he added. "It was 30 days and just devastation, and it's really hard to respond."

He said the seminary would "look different, act differently and be better positioned to serve students and congregations when we come out of this."

The seminary will now emphasize practical training for clergy in areas such as financial management, conflict resolution and the use of technology, Johnson said, rather than its current emphasis on theology and Biblical studies, though that still will be part of the curriculum.

Also, while the seminary traditionally required students to spend three years as a residential full-time student, it expects to offer more flexible scheduling and online courses, Johnson said.

The board asked professors to report this fall with ideas for a smaller but reinvented format. Some of the staff cuts, however, will take place sooner, Johnson said.

Lexington's is the latest of several seminaries to retrench nationwide, particularly in the wake of fall's financial meltdown. Colleges and universities also have suffered.

Southern Baptist Theological Seminary in Louisville, one of the nation's largest seminaries, is reviewing ways to plug a deficit of as high as $3 million this year. It recently launched a study of the future of its School of Church Music and Worship.

Another large school, Southwestern Baptist Theological Seminary in Texas, also announced cuts last month.

Salt Lake Theological Seminary, a small evangelical school in Utah, has announced it will close.

Even before the 2008 meltdown, many seminaries have struggled.

Seabury-Western Theological Seminary, an Episcopal school in Illinois, stopped admitting students last year, while Episcopal Divinity School in Massachusetts sold seven buildings to stabilize finances.

Union Theological Seminary in New York City leased out three buildings and transferred its library to neighboring Columbia University.

Seminaries rely heavily on endowments and usually have to cut jobs to cope with deficits because most of their costs are in salaries, according to Eliza Smith Brown, spokeswoman for the Association of Theological Schools. And financially strapped donors also may be giving less, she said.

Also, many seminaries already were low on reserves and even running deficits before the meltdown, Smith said.

Mary Jeanne Schumacher, spokeswoman for St. Meinrad Theological School in Southern Indiana, the nearest Catholic seminary for many in Kentucky and Indiana, said the school plans no cuts but is watching expenses closely.

Calls to two other Kentucky seminaries, Asbury Theological Seminary in Wilmore and the Louisville Presbyterian Theological Seminary, were not immediately returned today.

Lexington Theological Seminary traces its roots to 1865 when it was known as the College of the Bible, part of what later became the separate Transylvania University.

Its denominational affiliate, the Disciples of Christ, dates back to revivals in nearby Bourbon County. The 700,000-member denomination has long blended a simple evangelical worship style with liberal social stances and the promotion of church unity.

Steve Monhollen, faculty representative to the trustees, said in a statement that the faculty learned of the pending decisions several weeks ago and already have begun discussing ways to redesign and enhance the curriculum and the learning process.

"The faculty has been energized by the possibilities of being on the forefront of a totally new seminary curriculum," he said.

Johnson said he doesn't expect the cuts to affect the Baptist Seminary of Kentucky, which rents space and shares the library at the Lexington seminary's campus on Limestone Street.

"We support them in the process of reinventing their seminary and are hopeful for their success," said Baptist Seminary of Kentucky President Greg Earwood. He said his school is prepared to look for new space if that becomes necessary, but that "we are really pulling for them" to succeed.