Economics are always a problem for theological schools in the Majority World due to various historical, cultural, and structural issues. In addition, factors such as lack of resources, little financial support from churches, and enrollment of mostly poor students make the management of a theological school particularly challenging.
Schools must consider internal factors, such as program efficiencies and the total cost of training a student in any given program. Smith (2015) has detailed these well in his article. However, external factors are also important. In economic terms, schools need to understand the market demands and how their product — the training programs they offer — meets those needs. This is not to commodify the training we do for ministry, but rather to better understand some of the economic forces in play for theological schools today.
As an example of internal economic ramifications, schools offering residential programs that require housing on campus or nearby will incur greater costs as student numbers increase. However, schools with programs that do not require housing may strengthen their sustainability with increased numbers of students, unless the increases necessitate acquiring more buildings or hiring more teachers. These schools may improve their ratio of expenses to revenue by offering more programs and services, again, without personnel or infrastructure changes. This happens only because the fixed costs do not grow in proportion to the number of students. Of course, these assertions are simplistic because administrative considerations differ for each type of institution and program, and for each context.
Consideration of What We Produce
What catches my attention is that theological education is a delicate enterprise in which one must consider the product. How do we define the product? Would it be the teaching of some particular content or model? Would it be the formation of leaders or clergy for the church? Would it be the formation of citizens based on Christian values?
We must also ask, “Who decides what is the appropriate product?” Would it be the institution itself? — its customers? — the church? — God? Should this decision be made unilaterally or dialogically? Once a decision is made, would it be static or dynamic, with respect to time and context? We must consider factors that directly influence how we respond to these questions.
In the case of theological education, we cannot forget that this product will necessarily vary. For each theological stream or tradition, we will have a different particular output, even though these outputs may share common elements and purposes. Historically, every evangelical denomination has started its own school with its characteristic product. Only in rare exceptions has there been consumption by customers from another denomination.
As denominations and independent communities have multiplied, nondenominational schools have also appeared, enabling the offering of a different product, attracting new customers, and at the same time, facing resistance from others. One of the biggest challenges for these schools is offering a product that meets the needs of the greatest number of potential customers. Without the a priori guarantee of customers, these schools will require skillful management to remain competitive and sustainable. The leadership at these schools must understand factors such as efficiency, effectiveness, quality, and market perception.
From the business perspective, there are some typical situations that affect companies. For instance, managers may decide to offer a “basic need” product that all customers want. Therefore, they will not need to worry too much about quality or customer relations. They can assume they have something that will always be in demand. Such a company will only be concerned with quality and customer loyalty when a competitor arises, offering a similar product and threatening its business.
I am not saying that the products of those who fit this model are of a poor quality. What I am suggesting is that concern for quality is not a major factor in their business operations. In a way, denominational schools have historically followed this model as they have a more-or-less built-in market preparing pastors for Consideration of What We Produce existing (or newly planted) churches. On the other hand, non-denominational schools will always have to attract customers by convincing them of the quality of and need for their product. To do this well, they should formulate a clear pedagogical vision and recruit appropriate faculty.
There are also companies that have a product that no one else produces and that many customers want. In market language, these companies are “sailing the blue ocean.” However, this does not seem to apply much to theological schools, particularly non-denominational schools that do not have a predetermined clientele. These theological schools face the most common type of marketplace scenario: free competition with similar institutions. Survival in the marketplace depends on administrative actions that differentiate their product, either by quality or by association with some other benefit or service.
The current scenario faced by theological education does not allow schools to continue as though they were in the Middle or Modern Ages. It is critical to understand that theological education is no longer the simple transmission of a fixed content. In the Middle Ages, theological education was structured to transfer the tradition of the church, mainly represented by the Apostolic Fathers’ writings and the ecumenical creeds. Later, during the Modern Age, theological knowledge was divided into a group of disciplines that tried to systematically explain human and divine phenomena. Following the Enlightenment paradigm, theology was treated as any other science, expected to propose objective, mechanistic, correct, and final laws concerning God and his revelation.
As we move through a new time, challenged by Postmodern paradigms, theological schools must consider this new environment. The church is already facing a multiethnic, multicultural, pluralistic, Non-Western-dominant world. She is also dealing with a growing urban, virtual, and cyber reality in which new generations are willing to speak, dialogue, and participate in constructing human knowledge.
In order to survive and maintain relevance, each school needs to understand its market and customers, which vary for each context. Each school needs to understand the demands of its context and discern trends in order to adapt its product to new realities. As churches increasingly invest in the in-house training of their leaders, schools need to think creatively about how to establish partnerships and offer new products that match this new reality. Distance learning programs have become a very interesting, flexible, and attractive way to address this challenge. With a small investment in equipment and faculty training, a school can offer diverse courses varying in subject, enrollment size, and length. Course material can be conveyed using videos, text, and other resources according to the needs of clients and partners, or to the creativity of the faculty.
Economic awareness and administrative astuteness are needed to address the issues treated above. Here, we have a very delicate situation. What I observe about theological schools in the Majority World, particularly in the Latin American context, is that they are led mostly by well-intentioned people who are passionate for the gospel, but have little skill in management. Many financial problems are caused by naïve administrative approaches that disregard resources and techniques related to planning, budgeting, quality control, efficiency, productivity, evaluation, and the like. When weak management skills meet the structural economic difficulties of particular countries, the result is catastrophic, threatening institutional survival.
Assessing and accounting for the variables involved in providing theological education (distinctive output, product quality, market demands, management, finances, etc.) is an interesting and complicated task for which there are no easy and ready formulas. It relates directly to the mission and calling of the school and responds to external economic factors, which include the demands of the marketplace, the church, and the broader body of Christ. As the context changes, so must the leadership be constantly aware of how to adapt the school in response. The adaptation process should include the contribution of many minds from all levels of the administrative hierarchy. Structural changes also require flexibility and timeliness. If we look around in Latin America, the schools that are still open and healthy are those that have paid attention and responded to contextual demands. Shrewd management requires a careful and collaborative approach aimed at the future and sustainability of theological schools.
Smith, Larry A. “Olive Oil, Theological Education, and Economics.” InSights Journal for Global Theological Education 1 no. 1 (October 2015): 31-33.