Steady in rough seas: McCormick's response to economic challenge
We have been fielding a lot of questions recently about how McCormick is managing in the present national economic downturn. Here are some answers to the more common questions.
How is McCormick’s financial health now that the economy shows signs of recovery?
We are pleased to report that our financial situation continues to improve. The endowment has rebounded significantly from the lows of last March so that at the end of December, the value of the endowment stood at approximately $78 million. Some of this is due to the general stabilization of the markets and continued low interest rates over the last nine or 10 months. Much of it is also due to critical steps that the Finance Committee and the Board took in the earliest days of the crisis to rebalance our portfolio, increase liquidity, and reduce expenses.
If McCormick’s financial situation has improved, do we still need to sell the 5460 Building?
Yes. Notwithstanding the welcome uptick of the markets and the stabilization and growth of our endowment, the markets and the economy as a whole remain fragile. Although we continue to benefit from historically low interest rates, those rates will not remain at this level for the long-term. Over the last decade, McCormick has been forced to devote increasingly large percentages of its financial resources to real estate-related costs, including debt service and capital improvement costs on buildings we do not own. As we engaged in discussions throughout the seminary about the concept of “economic equilibrium,” it became increasingly clear that real estate was actually getting in the way of mission.
As we have said all along, however, we are in no rush to sell the building. In fact, it may well be a matter of years before we find the right buyer at the right price. That is why we are excited about the prospect of better utilizing our space by creatively reconfiguring storage and other under-utilized spaces in our building for classroom, meeting, and program use.
Are the stated values and mission of McCormick changing?
No. In fact, the impetus behind the four-phase plan to reach financial sustainability is an unwavering commitment to our mission to prepare leaders for Christ’s Church. McCormick’s brand of theological education remains uniquely Reformed, urban, ecumenical, and cross-cultural.
When I make a gift to McCormick, how is my money used?
Every dollar McCormick receives in the form of a gift goes to supporting the educational experience of a student. Clearly, this can mean many different things. It may mean supporting the annual fund, which is that source of money needed for the annual operations of the seminary, which includes everything from salaries and benefits to weekly worship, community meals and academic programming. A gift may also be made to the pool of need-based financial aid, enabling gifted students called to ministry to attend seminary when they could not otherwise afford it.
As a donor, the most important thing to know is that you have the opportunity to support theological education and the future of the Church. There are different forms of giving available and our Development staff looks forward to working with you to identify the form of giving best suited to your sense of vocation. We recommend that you visit our giving page to learn more or call the Office of Seminary Relations & Development at 773.947.6349.
Is McCormick considering the sale of its student housing?
McCormick has not committed to selling any of its housing. The Board has commissioned a Working Group to explore the full range of options relative to its real estate holdings, which includes its two residence buildings. The seminary is committed to nurturing and sustaining a rewarding, community-based student experience and recognizes in its urban surroundings different ways of achieving this end.
The Working Group, which has representatives from the student body and Student Affairs Committee of the Board, is scheduled to deliver a report in early to mid-2010. If the Board were to elect to sell one or the other of the residential properties, rest assured that students would have adequate access to alternative housing and adequate time and assistance to secure alternative housing if it became necessary.
Will McCormick remain a seminary of the Presbyterian Church (U.S.A.)? McCormick has proudly claimed its Presbyterian roots since the 19th century, but it is the seminary’s contemporary context that argues most persuasively for its ongoing affiliation with the PCUSA. Relative to reports from other sectors of the country, PCUSA membership in the Upper Midwest is strong as is the need for ordained and lay leadership. As the only standalone PCUSA seminary in the region, McCormick’s presence is critical.
Faithful to its great Presbyterian heritage, McCormick has established itself as a fundamentally ecumenical institution capable of bridging diverse traditions in a time when peaceful alliances between different traditions are very important.
If McCormick relocates, where will it go?
McCormick believes its home is in Hyde Park. The seminary’s move from Lincoln Park in the 1970s was more than a change of scenery – it was a response to God’s call to embody its commitment to social justice and community life in a new way. McCormick has deep roots in Chicago’s South Side and among its Presbyterian counterparts represents the only seminary whose mission is inextricably linked with the urban community in which it resides.
In light of its financial pressures, how does McCormick intend to help students with the cost of their education?
McCormick is very concerned about enabling its graduates to minister in the world unencumbered by large student loans and other forms of debt.
In all of its efforts to reach financial sustainability, which has included significant sacrifices by staff and faculty, McCormick has offered a consistent level of financial support to its students in the form of scholarships, need-based aid, and opportunity for on-campus employment.
McCormick believes theological education is a partnership, and so the seminary encourages students to play an active role in funding their education by exploring the full range of possibilities. These include support through their home churches and support from their denominations. McCormick’s Office of Student Financial Planning is ready to assist current and prospective students in developing a sound strategy for funding their education.
What does this all mean for McCormick’s relationship with LSTC?
We, of course, cannot speak for LSTC, but they are dealing with many of the same issues and questions that we have tackled in recent months. In fact, our conversations with LSTC initially focused on how we might merge or otherwise develop a completely integrated administrative and academic structure. For a variety of reasons, it became clear that such a merger was not a viable alternative for either LSTC or McCormick. LSTC, as part of the Lutheran church-wide system of theological education, has other partners with which it can and does work. They have a wonderful educational program and good leaders, and it is our expectation that LSTC will also emerge from all of this a better and stronger institution.
McCormick and LSTC remain in partnership, most notably in the joint ownership and operation of the JKM Library. JKM is a nationally recognized resource for theological study that continues to serve students of the University of Chicago Divinity School and all members of the Association of Chicago Theological Schools. Through this and other resources, McCormick and LSTC continue their proud legacy of developing leaders for the Church.