Feb 24, 2009

Falwell addresses future financiers

by Natalie Lozano

Before Chancellor Jerry Falwell Jr. became the face of Liberty, he played a vital role in bringing the institution out of its birthing debt. He was able to share from those experiences with Liberty’s Financial Management Association (FMA) last Thursday night.

Falwell began by putting the current economy in perspective with a background on Liberty’s financial history. In Thomas Road Baptist Church’s early days, there were no financial institutions providing loans to churches and similar organizations, according to Falwell. Thus church bonds sold door-to-door initially funded his father’s entrepreneurial spirit, meaning the university began in the red.

By the time Falwell began practicing law in the late 1980s, the school’s debt was headed toward its high of $82 million. Although he had not taken any business classes, Falwell knew from studying law that there were alternatives to bonds.

“It gives you a unique perspective on business, if you know what the legal consequences are,” he said.

With his legal knowledge of real estate, Falwell started several private companies that purchased and developed the land that is now Candler’s Station Shopping Center and many other properties along Wards Road. He also spent many years helping the school sell its surplus land along Wards Road to Wal-Mart and Sam’s Club and assisting the school restructure and reduce its indebtedness.
The transactions eventually brought the debt down to about $20 million, but Liberty did not become debt free until after Jerry Falwell Senior’s death, when the insurance proceeds from policies on the founder’s life were received.

The leftover money was added to donations to begin Liberty’s first endowment fund. While other universities lost large sums of money in 2008 riding the stock market, Liberty’s fund is safe and providing an unexpected cushion for the school, Falwell said.

“We’re in a position where I think we can ride out the storm pretty well,” he said.

Falwell assured students that he and his advisers are going to continue to watch the economy for its effects on students and their families, a fact the students in attendance appreciated.

“It was very interesting hearing about the financial future of Liberty, as well as hearing where Liberty has come from,” junior Taylor Webb said. “Also it’s cool to see Jerry Falwell Senior’s vision in Jerry Junior and how that’s carried out.”

Falwell sprinkled tidbits of practical and humorous advice throughout his address.

“When you’re an entrepreneur, you’ve got to live frugally, you can’t live high on the hog,” he said.

During a question-and-answer session, FMA members asked about everything from the future of the school to advice on applying for jobs.

“Look for the growth sectors of the economy,” Falwell responded to a graduating senior.
One student asked about balancing the American view of success, which is measured by wealth, with the Christian ideal of living like Christ.

Jesus did not call his followers to imitate his lifestyle, otherwise Christians would be single and without kids, Falwell responded. However, he said that Christians should live by Jesus’ teachings. By making and investing money wisely, as Jesus taught in the parable of the talents, Christians will be able to help the poor.

The students enjoyed the frankness of the evening.

“It is exciting to see how Chancellor Falwell is pouring into students in every aspect of Liberty University, not just religion majors, not just lawyers, but business majors (also),” senior Sean Philpott said.

 


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