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Southwestern Seminary Blames $140M Deficit on Overspending

Over 20 years and two presidencies, the school went millions beyond its budget while enrollment continued to decline.
Southwestern Seminary Blames $140M Deficit on Overspending
Image: Southwestern Seminary

A new report from trustees at Southwestern Baptist Theological Seminary in Fort Worth, Texas, details two decades of fiscal mismanagement, including a $140 million operating deficit.

According to an overview of the seminary’s finances released Wednesday, Southwestern ran an average deficit of $6.67 million per year from 2002 to 2022. During that time, the number of full-time Southern Baptist students at the school dropped by two-thirds (67%) while expenses went up by a third (35%).

The decline of SBC students was significant—since the tuition for them is subsidized by the Southern Baptist Convention’s Cooperative Program, which helps fund the denomination’s six seminaries.

Overall, the school’s enrollment declined from the equivalent of 2,138 full-time students (including non-SBC students) in 2003 to 1,126 full-time in the fall of 2022, according to data from the Association of Theological Schools. (The ATC counts full-time equivalents using a different standard than Southern Baptist seminaries.)

As a result, the school also collected less tuition money from students.

To offset the deficit, the school spent from its reserves and took distributions from its endowment.

“The failure of SWBTS to navigate internal and external headwinds has resulted in a prolonged season of deficit spending that has depleted cash reserves,” according to the summary released by the trustees, who also released two decades of audits.

Much of the overspending occurred during the tenure of Paige Patterson, who was president of Southwestern from 2003 to 2018, when he was fired for allegedly mishandling sexual abuse.

The report, however, does not detail any of the spending patterns during Patterson’s tenure. Instead, the report included a few select details about former President Adam Greenway, who resigned in 2022, less than four years after taking office. Greenway cited enormous “reputational, legal, and financial” challenges the seminary was facing in his resignation letter but offered few details.

Wednesday’s report was a response to ongoing questions among trustees about Greenway’s tenure. Last fall the board of trustees appointed a task force to review spending by Greenway on personal expenses and on his seminary-owned home and office, after concerns were raised about spending during his tenure.

That led to a dispute among trustees that spilled into the Baptist media, with allegations of financial misconduct by current staff, causing the trustees to call a special meeting to address those allegations.

That meeting led the board to issue a statement saying allegations of misconduct by current staff were unwarranted and promising to release selected details of Greenway’s spending and the school’s past audits. The seminary found no misconduct on Greenway’s part but alleges he made questionable spending decisions.

“The task force concluded that Adam Greenway engaged in a pattern of spending that the task force believes did not reflect proper stewardship of seminary resources,” according to Tuesday’s statement. “This pattern of spending occurred without deference to financial controls and seminary financial policies.”

The seminary did not release the entire task force report and has no plans to do so, according to board chair Danny Roberts.

According to the report, more than $1.5 million was spent on the on-campus presidential home, including renovations and furnishings. That included an espresso machine costing more than $11,000, about $60,000 for Christmas decorations and more than $25,000 for artwork.

“These expenditures were made at a time when the seminary was making significant budget cuts, including the reduction of faculty personnel and positions,” according to the report.

The report also found that Greenway spent nearly $10,000 on first-class tickets to fly him and his family to last year’s SBC annual meeting and spent $920 on a Florida Gator head decoration. (Greenway is a fan of the Gators football team.)

Roberts said no budget was approved by the board for spending on the president’s office and the house.

“Although there were conversations with a few board leaders recognizing the need for some work to be done on the President’s home, expenditures on the President’s home and office were made at the discretion of the President,” Roberts said in a statement.

The seminary’s bylaws give the president full authority over the school’s finances. While the board did approve an annual budget, not all of the school’s spending was included in that budget. That has changed, the board chair told Religion News Service.

“The annual budget approved by trustees in recent years has not included a budget for capital expenditures,” Roberts said. “Under the new administration, trustees are now presented a capital expenditure budget, in addition to the annual operating budget, for their review and approval.”

The board chair also now reviews the expense reports of the president and other leaders at the seminary. Other guardrails have now been put in place, according to the board.

The report released Wednesday does not discuss the trustees’ role in overseeing the school’s finances over the past two decades or why the long-term pattern of deficit spending was allowed.

“The compilation and overview demonstrate that the financial challenges at Southwestern are longstanding,” the trustees said in their report. “Unfortunately, the trustees’ hopes of correction in this financial trajectory in the 2019 election of Greenway were not realized.”

Greenway told Religion News Service he has no plans to comment on the report at this time.

Once one of the nation’s largest and most prominent seminaries, Southwestern has experienced a series of challenges since Patterson’s departure, including a court battle over a foundation meant to support the school. Former staffers and Patterson supporters attempted to wrest control over that foundation. That attempt failed after Southwestern and Baylor University, which was also supported by the foundation, sued.

Patterson was also accused in the official SBC annual report from Southwestern of taking seminary property, including artwork and a confidential donor list. He was also accused of trying to divert donations from the seminary to his own ministry.

Patterson has denied any wrongdoing.

David Dockery, a longtime leader in Christian higher education, was named the school’s new president in April. He had been acting as interim. Longtime Baptist pastor and leader O. S. Hawkins was named the school’s chancellor.

“Although we must be candid to note that significant financial challenges remain, the new administration has made difficult decisions to reduce spending, including in overall staffing of the institution, while prioritizing the educational mission of the seminary,” the trustees said in a statement.

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