SPU Turns a
Late Start Into
a
Great Start
by Clint Kelly
In 1979, most thriving universities in America had long-established endowments, some dating back to before the turn of the century. Seattle Pacific University, on the other hand, was just beginning to think seriously about putting money aside for future needs.
Historically, Seattle Pacific had banked on survival as a low-cost institution accessible to students from all socio-economic levels, and had embraced a ministry philosophy that God would provide whenever a financial need arose. Following World War II, the school embarked on an ambitious building program to accommodate a large influx of returning GIs, and later, their offspring. It seemed impossible to build an invested endowment when there were so many immediate individual and capital needs.
But by the 1970s, the cost of providing a quality education had soared, and double-digit tuition increases followed. It became all too apparent to some who loved Seattle Pacific that the school's long-term stability in an increasingly complex and costly world depended on God and required astute financial planning.
Among those visionaries were two of the University's chief officers at the time: President David McKenna and Vice President for University Advancement Curtis Martin. "All those urgent needs for buildings and immediate scholarships meant we never had money to put away for later," remembers Martin, who was asked by McKenna to help rectify the situation. "We desperately needed to endow the future of SPU."
Catapulted by investment funds from key alumni, the McKenna-Martin initiative brought the Seattle Pacific Foundation (SPF) into being in 1979. Among those tagged to provide investment expertise for the fledgling organization were Steve Grey, Joel Paget '67 and Mary Williams, all of whom serve on the Foundation board today.
It was a major turning point for SPU: For the first time, the institution could strengthen its academic programs and accommodate an expanding student body through the managed assets of its financial contributors.
None of this would have happened without 1936 alumni Ed and Polly Teel, who provided much of the initial investment money with a generous Wellspring Endowment of $250,000 unrestricted dollars. "Dad hated to see donations spent as fast as they came in," says son Jerry Teel '63, Seattle Pacific trustee and president of Vitamilk Dairy, the family business. "He liked the theory of using the interest while keeping the principal and thereby giving the school some security and stability."
The concept worked and others quickly saw the wisdom in it. Those who invested realized significant tax savings. They also saw that the Foundation managers kept their promises, invested well, paid investors on time and competently dealt with IRS regulations.
Eventually, a forward-thinking policy mandated that the first $150,000 of large, unrestricted estate gifts go to the Annual Fund, the remainder into endowments. Thus, the endowment fund experienced periods of rapid growth. In the last 10 years alone, it has multiplied 560 percent to more than $20 million. The Foundation's total managed assets, including money held in trust for donors and earmarked to eventually pass to the University, are nearing $39 million. The earnings of these funds this year will produce almost $800,000 in support of scholarships and academic programs.
Investors in the SPU endowment have frequently designated their gifts as a memorial to a family member or former professor, and have helped to fund specific scholarships, faculty chairs, academic disciplines or special lectureships. Endowments have also been established in support of athletes, adult learners, theatre majors, Native Americans, future physicians and many others.
The first president of the Foundation, Martin believes the endowment is one of God's ways to help young people from homes that couldn't otherwise afford Christian higher education. "It's a terrific equalizer and I honestly don't know how the University could survive without it."
Still, compared with other colleges and universities, SPU's endowment is relatively small. According to the National Association of College and University Business Officers (NACUBO), in terms of endowment size, Seattle Pacific ranks in the bottom 10 percent among more than 450 schools -- including the large Ivy Leagues with billion-dollar endowments.
Where SPU's endowment shines, however, is in results. NACUBO annually rates return on investments for endowment funds at American institutions of higher education, and the Seattle Pacific Foundation consistently ranks in the top 25-50 percent.
"We may have come late to the party," says Bob McIntosh, vice president for university advancement, "but we are fortunate to have started our endowment when we did. In a relatively brief amount of time, our loyal alumni and friends have made a tremendous financial difference that our students can depend on in a day when federal and state aid continues to shrink. Couple that with the campus-wide cost-cutting we've done and you have a university that has made significant progress in achieving financial affordability.
"But we cannot stop here. With the increased financial pressures on providing quality higher education, we must work diligently to control costs at the same time we are working to increase our endowment base."
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jgilnett@spu.edu
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