The executive committee of General Theological Seminary's board of trustees said April 19 that the school may have to sell some of its property to raise enough money in order to pay its bills after mid-November.
The Rev. Canon Denis O'Pray, chair of the trustees, said in a news release that the committee considered merger or collaboration with other entities, as well as the likelihood of "immediate philanthropy," before coming to the conclusion that selling property was the "most reasonable source" of money. He did not say what property might be sold.
The executive committee concluded that the school's "first priority" must be to "develop a source of immediate cash relief so that seminary operations can continue and debt be serviced until a long-term strategic financial plan can be designed and implemented," O'Pray said.
"Should the sale of assets or significant philanthropy ease the seminary's immediate cash shortage, the longer term need to reduce the cost of debt service remains a significant challenge and must still be addressed," O'Pray said.
The committee said it had also assigned trustees to meet with other Episcopal institutions to "understand more clearly the level of willingness" of those institutions to discuss "consideration of financial cooperation, program collaboration, merger, or other mutually beneficial relationships."
The April 19 news followed a more general warning about the school's financial future issued by the entire board after a March 29 meeting when it said it needed cash to service its debt and pay for the 2010-2011 school year. O'Pray told faculty, students and administrative staff that day that the seminary needed between $2 million and $4 million, seminary spokesman Bruce Parker said at the time.
The committee recommended that the entire board reconsider its decision at the March meeting to suspend the search for a successor to Dean and President Ward Ewing who had announced in December that he would retire when his successor was hired. Instead, the trustees had decided to hire an interim executive.
However, the executive committee recommended that the board hire an interim dean and president who would have the authority of the office and who would serve for one to three years. O'Pray said that the committee thinks an interim dean could be found in the next several months.
The April 19 news release said that the executive committee affirmed its gratitude to Ewing "for his tireless efforts to lead the seminary through its current financial crisis, and commended his continuing pursuit of philanthropy for the seminary."
Earlier in March a consultant for the search process told the trustees' executive committee that the seminary faced a projected shortfall in operating funds, a news release from the seminary said.
After the March meeting, Parker told ENS that General had the money to cover operating expenses for the near future, but will require an influx of revenue to cover the 2010-2011 school year.
Ewing told ENS at that time that General's financial situation did not come as a complete surprise to him and the trustees. "We have been aware and even have had a special task group working on the reality that our income for a variety of reasons will not presently cover our operating costs and the costs on our loan payments," he said.
The seminary earns income from its annual and capital fund raising, endowment, tuition, housing, food service and other fees and pre-school payments as well as from the Desmond Tutu Center, recently opened on campus, according to Ewing and Parker.
Ewing cited unexpected delays in opening the Tutu Center as a major factor in the changing forecast. General lost $1 million in anticipated revenue from the center last year because it did not open as predicted, he said. The school expects to make $400,000 from the center this year and expects to net $2.5 million annually within three to four years, according to Ewing.
"The problem is how we get from here to there," he said.