How did the position of ‘financial exigency come about?
The Association of Theological Schools, as part of its accreditation performance standards, sets out financial governance requirements. One of these standards is that member institution draw down no more than 5% of the interest on its investment portfolio towards operating costs in any given year. When it became clear that Vancouver School of Theology was withdrawing more than 5% annually, the VST Board of Governors exercised its fiduciary responsibility to maintain its position with the Association of Theological Schools and declared financial exigency, thereby protecting the status of its accreditation. Financial exigency is a process that permits academic institutions to move through financial restructuring with greater flexibility than is generally available in the academy.
What are the measures that VST has taken to restructure its operating costs and increase the revenue stream?
There have been numerous actions taken to reduce operating costs, and as well to increase the revenue stream. These include:
- Since the Fall of 2011, 4 staff/administrative positions have been eliminated, and 1 full-time faculty position has been eliminated. Since 2006, numerous other positions have been eliminated through resignations and retirement.
- Employer contributions to staff pension plans have been reduced from 8% to 3%.
- Budget restructuring: All administrative and program areas have undergone extensive budgetary analysis to determine areas of potential costs savings for the current and upcoming fiscal year. A number of small but significant savings have already been made and VST is running as a tight, team committed operation.
- Guest rooms at VST are being converted to 100% student housing, which will result in a significant increase in revenue.
- A major fundraising campaign to endow four chairs of study at VST has been initiated and is in the planning stages. A professional fundraising consultant has been contracted by VST to spearhead the initiation of this campaign. The endowed chairs will focus on four central components of the life and teaching at VST: Spirituality and Social Action (Anglican), Pastoral and Public Leadership (United Church), Indigenous Studies, and Inter-religious Studies.
- A strategic plan to increase visibility and engage alumni of VST is being undertaken, along with numerous other communications and development initiatives.
- Ongoing efforts continue to maintain and increase enrollment in VST programs.
What is the focus of VST for going forward from this point on?
Currently VST is experiencing its highest ever enrollment numbers, and student satisfaction is rated as very high by the current cohort of students. VST has positioned itself as one of North America’s leading edge theological institutions in its academic programs. Additionally, the recent restructuring of its academic units into three centres of study (Centre for Christian Leadership, Indigenous Studies Centre and the Iona Pacific Inter-religious Centre) has significantly increased its visibility and status as a forward-thinking and innovative liberal theological institution. As the campaign for the four endowed chairs takes root and progresses, the financial status of VST will stabilize, enabling VST to continue offering world-class educational programming and opportunities.
When will the status of ‘financial exigency’ be removed?
The status of financial exigency will be removed when the Board is satisfied that the School is solidly on the road to full financial stability.
How will the status of ‘financial exigency’ affect VST students to either enter into, or complete their course of studies?
With confidence, we can assure all current and incoming students that they will be able to pursue their chosen course of studies towards completion. While the financial situation is serious, there is well thought out and carefully considered strategy in place to address the current financial position of VST. In addition, VST has put together a team of highly respected, competent administrators, fund-raising consultants and community leaders to spearhead the development campaign, all of whom are motivated towards a successful outcome. Please contact the communications office at 604-822-9427 if there are any further questions or concerns regarding how the state of financial exigency affects student life at VST – we welcome the opportunity to bring clarification to this matter!
Recent financial history
In 2000 a property development project was undertaken through which much of VST’s land was sold to developers with 99 year leases. The proceeds from the property sales were used to pay back old debt, refurbish the Iona building, build a new student residence, build an archives for the housing of Anglican and United Church records, and to keep the school running in transition times. VST also established a small property fund to add to the existing Specified Trust Fund and the H.R. MacMillan fund – the school’s core investment funds.
By 2008 VST had regained solid financial footing and was operating with a balanced budget. However, when the last of the leases were sold and construction was largely finished the school did not cease to have costs associated with the project. VST has continued to pay several hundred thousand dollars to UBC toward the final costs of completing the development project. The bulk of the residual of those costs will be paid in 2012.
Combined with some enrollment challenges in 2007-8, the market disaster of 2008, the loss of government support (the BC government eliminated all funding for theological schools and seminaries in 2002) and United Church core funding in 2010, the school has continued to struggle. While these factors have resulted in a serious financial setback for Vancouver School of Theology, the Board of Governors and administration remain confident that VST will not only weather the current state of financial exigency, but rise above these circumstances to a position of financial stability within the foreseeable future.