The Magazine of The Evangelical Lutheran Church in America


January 3, 2013

Leadership resignations follow seminary deficit

As Luther Seminary, St. Paul, Minn., reported a $4 million funding shortfall for 2012, Luther's chief financial officer, Don Lewis, and its president, Richard Bliese, resigned last November and December, respectively. Both had served since 2005.

The board of directors named an interim president, Rick Foss, and an interim chief financial officer, William Frame. Foss, who took over Jan. 1, was previously the seminary's director of contextual learning. Before that, Foss served as bishop of Eastern North Dakota Synod. Frame's previous positions include chief financial officer for Pacific Lutheran University, Tacoma, Wash., and president of Augsburg College, Minneapolis.

Revenue down $4 million in 2012

As of the June 30, 2012, end of its fiscal year, Luther had $23 million in income, which was "$4 million less in revenue than we had in expenses," said seminary board chair James Lindus. "That included depreciation, asbestos [remediation costs], maintenance [costs for] aging buildings, an investment performance that was lower than we'd hoped and a less-than-ideal expense management."

Seminary leaders are asking " 'How did we get here?' so we don't do it again," Foss said, adding: "We're absolutely sure that the things that didn't go well weren't because someone didn't mean well. Rick [Bliese] brought all kinds of good things here."

The resignation decisions were made "after prayerful deliberation" and the board is working "to restore confidence," Lindus said. "[Frame] has given us a realistic [financial] picture. ... We're thinking we'll have a balanced budget next year." Working with faculty and staff, the seminary's four-person transition team — consisting of Foss, Frame, academic dean Roland Martinson and former Pacific Lutheran University president Loren Anderson—has already put into place new financial controls and management systems and is implementing a plan to strengthen the seminary's finances.

While declining enrollment is a concern, Lindus said the "5 percent decrease in overall enrollment, which is reflected across U.S. seminaries," was less of a factor in the shortfall.

Taking a 'reality-based road'

Though down from a $76.8 million endowment value as of June 30, 2011, "we still have a $70 million endowment and $100 million in assets," Lindus said, emphasizing that the seminary is financially secure. "But key for us is the question: 'How are we going to make theological education sustainable for our students and faithful to the church so we have a long, bright future?'"

For now, Foss said the seminary is taking "a reality-based road to hope," avoiding the ditches of "wishful thinking" and "panic and doom-saying" on either side. Foss said he's cognizant that fear over finances "can carry the temptation of turning inward and [doing] things that are not our best selves." To help prevent that, "we're being as clear as possible about our communication. Many good things are happening at Luther. We have some work to do, but we'll be fine."

Lindus said Luther hopes to begin a presidential search this May. 

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