Operating Institutions by William T. Knox

Review and Herald Publishing Association · Takoma Park Station, Washington, D. C. · Feb 20, 1913

Operating Institutions

By William T. Knox

As all our institutions are so closely allied to our evangelical work, being in fact a part of it, they can not be expected to be operated on a purely commercial basis, and yet they must of necessity be so conducted that they will not become a financial hindrance to our missionary effort. This makes it imperative that great care be exercised in the methods and policies pursued in their establishment and maintenance. It would seem unnecessary, therefore, to state that in the founding of these institutions, but very few of which can be expected to possess a money-making power, they should be placed in at least as favorable a financial condition as similar institutions conducted on a purely commercial basis; that they should not be heavily burdened with debt, which can only result in draining their vitality and greatly hindering their usefulness, too many times seriously reacting upon the entire denomination. They should neither be established on borrowed capital nor allowed to be operated year after year in such a manner that an indebtedness will be created, as either course would mean an ever-increasing tax upon the institution, and too many times upon the people of God.

Let us further consider our educational institutions. With the examples before us of the public schools, with buildings and ample equipment furnished by the state, with all operating expenses met from the same source; with almost all the colleges and seminaries of the land not only placed in possession of their complete equipments and plants without any indebtedness, but also heavily endowed in order that they may successfully conduct a work of high standard, how worse than foolish for us to launch our schools, too many times with the most meager facilities, and with the fatal incubus of a heavy debt calling each six or twelve months for its regular toll of interest, when all educational experience has demonstrated that it will require exceptional business management to make an unendowed school entirely free from debt meet its operating expenses from its legitimate income.

The same can be said of our sanitariums. With very few exceptions found in some favorable localities, with the educational work conducted by most of them and the charitable and benevolent work performed, their earning capacity can not be expected greatly to exceed their expenses. In most instances, their limitations from the standpoint of capacity render a more sanguine expectation useless. Therefore, to create a sanitarium with a heavy indebtedness upon it, expecting it to meet the charges upon the same from its legitimate income and to fulfil its financial contracts, is almost invariably to invite disaster to the institution, disappointment to its creditors, and embarrassment to the cause. Where such a policy becomes general in our institutional work, we may look for most serious results to our entire work, evangelical as well as institutional. The time and effort that should be entirely given to the evangelical work by the ministry, will be largely demanded for financial problems and difficulties. Money, in the gifts and offerings of the people, which should be devoted to sending the gospel to the world, will be required for the assistance of the embarrassed institution.

The fact that the indebtedness may all be held by our own people would in no sense modify this. Every note that is issued by us contains a promise to pay, and unless there is a known way by which the promise can be fulfilled, the note should not be issued. This is true, even though the one loaning the money thinks he may never call for its payment. The promise to pay—the issuing of the note—makes future payment possible, in fact, very probable, for unforeseen emergencies may arise, sickness may come, change of plans, that will make a demand for payment seem necessary. When such comes, we must be prepared to fulfil our promises.

The denomination has been remarkably free from financial crises. We have had in our history, however, such experiences of this character as should have placed us forever on our guard against a policy that would make a financial crisis possible. It should not be necessary to repeat such an experience as we had in Christiania, or more recently in Philadelphia, to cause us to heed the instruction so frequently given to shun debt. In the first instance cited, in order to save the publishing house in Christiania from going to ruin and the cause from suffering reproach, the entire denomination was obliged to come to the rescue. In the second case, the sanitarium was so heavily burdened with debt that no course seemed left but to close the doors, and call upon ministers, whose time should be wholly given to the gospel, to take up the task of raising money to liquidate the indebtedness. In addition, thousands of dollars that should have been used in proclaiming the gospel in heathen lands, had to be used to relieve the situation. Why?—Because some board or committee, in establishing the institution, thought they were warranted in ignoring not only plain and well-recognized business principles, but also even plainer divine principles given us by the spirit of prophecy.

The raising of a certain amount of money in gifts for the establishing of a school or sanitarium can be accomplished much more readily than the raising of a like sum to pay off debts. In the meantime, the heavy strain of interest, which of itself is enough to ruin most of our institutions, would be avoided, to say nothing of the great advantage gained by leaving physicians, teachers, and helpers free to give their whole thought and energy to the real work of the institution, rather than to the continual harassment caused by financial obligations. A debt-ridden school, sanitarium, or publishing house can not render the efficient service called for in our work, and it will only be with great and continual watchfulness that such an institution can maintain that missionary spirit upon which all our institutions must be established. Indebtedness is evidently one of Satan’s most effective agencies to cripple the work of God in the earth. Can we wonder, then, that we are instructed to “shun debt as we would the leprosy”? This does not mean that we shall not be progressive; it does not mean that nothing is to be done, but directly the opposite,—that we shall do something, but in the doing of it shun debt, shun it as we would the leprosy. This statement from the spirit of prophecy is a most forceful one. The individual who endeavors to shun the leprosy keeps away from it; does not tamper with it; does not plan to contract it temporarily, with the expectation of getting rid of it later. He shuns the evil thing and keeps away from it. If he should become infected with the dread disease, all his thought and effort would be devoted to ridding himself of it.

Now, it requires no argument to demonstrate that when the providence of God calls for the establishment of some institution, or the material enlargement of one already established, if we are to shun debt as we would the leprosy, we shall first provide the necessary money before launching out upon the contemplated work. We shall not cripple and befoul the denominational body with this leprous and deadly disease of debt, with the thought that later on we may perhaps find some way to heal ourselves.

W. T. KNOX.