Emory and the Economy
Frequently Asked Questions
Institutional Questions | Personal Questions
Institutional Questions
What are the primary ways Emory is affected by the economic turmoil?
Updated August 2009
Emory’s endowment experienced a negative return of approximately 22 percent for calendar year 2008, before accounting for the 12/21/08 valuation of private equity and other non-marketable investments. We are currently assuming a negative return of between 20 and 25 percent for the fiscal year. The reduction in value of our investment pools has a direct impact on the amount of endowment spending available for the operating budget, the amount of funds available for strategic plan expenditures, and the amount of funding available for capital expenditures. It is clear that we will have significantly lower resources available from endowment and investment income to support each of these purposes going forward. We will need to reduce expenditures and develop new revenue sources in ensuring excellence in all that we do at Emory. The reduction in investments coupled with dysfunctional credit markets will also limit Emory’s ability to borrow money.
At the same time the financial situations of many of our students and families have worsened, which will increase the need for financial aid.
Additionally, tight credit markets are limiting Emory's ability to borrow money for construction and increasing the overall cost of capital. And, of course, the constricted credit markets affect the ability of parents and students to take loans or use home equity to help finance their education.
Since some of our annual operating budget is funded by spending a percentage of the endowment, and expenditures for capital and strategic initiatives are funded in part from interest-bearing cash and long-term investment accounts, we will have significantly less income over the next several years than previously planned for.
How is the institution setting priorities and what are they?
Updated June 2009
Emory is committed to crafting a sound budget for the next several years as we adjust to carry out our financial stewardship responsibly, in the overall pursuit of academic excellence. President Wagner has directed University Administration units to observe zero or slightly negative budget growth and to plan to make any future hires and new investments in operating costs from reallocating existing resources The president also has frozen his salary and that of his Cabinet members.
Ensuring Emory's momentum and positive trajectory will require clear understanding, discipline, and prudent tradeoffs. We will continue to invest in areas essential to achieving our vision. To these ends, budget priorities include:
- Investing in financial aid required to retain and attract the best students, regardless of their economic standing.
- Investing in competitive, merit-based salaries to reward, retain, and attract the best faculty and staff.
- Completing all the construction we have started and reviewing the timing and pace of future projects. (see question below about construction)
- Investing in research and teaching in accord with school-based and University-wide strategies.
- Investing in Campaign Emory, whose success is critical to our future.
- Investing in research compliance and support, an indispensable business function for a University that now competes successfully for more than $410 million a year in research funding.
In an April 29 message to the Emory community, President Wagner outlined three broad principles that the University is applying in addressing the transition to a new economic environment. They include:
- Applying fuller funding to few activities rather than lesser funding to all that we have been doing.
- Enlisting recommendations for decision-making from the deepest appropriate levels within the organization.
- Viewing our current circumstances clearly without losing focus on our longer range vision.
View complete Message from President Jim Wagner to the Emory Community on April 29, 2009
How long will this recession affect Emory?
Updated March 2009
Immediately and at least for the next several years. Income from the University's endowment and investments will fall by at least $60 million per year by FY 2012, based on current market conditions.
Is there a hiring freeze at Emory?
Updated June 2009
No. There is not an across the board hiring freeze, but all departments should think twice before filling any staff position that comes open. This year Emory will have to absorb some attrition to reduce the likelihood of having to make even more painful decisions over the next year. Departments might also reallocate the funding for existing open positions to fund more-critical new positions in the pipeline.
Are there going to be reductions in work force?
Updated June 2009
Given the substantial downturn in the economy, some job loss is inevitable, and some reductions in force have taken place within several colleges, schools and administrative units. Assessment of the need for additional reductions in force is on-going.
Updated June 2009
We do not expect pay cuts at this time, except of course if work schedules and/or responsibilities are reduced/changed. Our goal is to offer market-competitive compensation to an excellent workforce. We will continue to evaluate the market and make business decisions as required.
Are benefits going to be reduced?
Updated June 2009
At this time we do not have any plans to reduce benefits to the University benefit package, other than changes in sick time accrual rates which have been planned for some time, pre-dating the recession. We continue to monitor the economic conditions and the broader benefit market and will consult appropriate groups (ie fringe benefit committee, faculty council, university senate, etc.) if a formal evaluation of benefit changes is needed in the future.
Normal reviews of individual benefit plans will continue as usual, which may result in changes (such as vendor changes or plan design modifications), as they would under usual circumstances.
Emory Healthcare recently announced that it is cutting matching contributions to employees' 403(b) plans in half. Is Emory University planning to cut retirement benefits as well?
Updated June 2009
The University does not plan to cut its matching contributions to faculty and staff 403(b) plans at this time nor is it under active consideration. It is important to understand that the University and Healthcare benefit plans have certain key differences that are based on differences in their respective employment markets, and one of them involves how the two entities provide for employees’ retirement. Emory Healthcare offers its employees a defined-benefit (pension) plan for retirement. Emory Healthcare’s 403(b) plan offers an extra, optional layer of funding on top of that base. Emory University’s 403(b) plan, on the other hand, is the only employer matching retirement plan the University offers. Based on existing comparative peer information and economic conditions, we do not anticipate a change to the university’s matching contributions.
Overall, Emory Healthcare announced to all employees that it was cutting $30 million in expenses to protect jobs. Why doesn’t the University follow the same set of priorities and slash costs to save jobs?
Updated June 2009
First, the University has already gone through major cost-cutting exercises of its own, as described in the February 10 letter from Ways and Means to the University community. A series of measures over the past four years have squeezed $23 million in annual expenses from administrative budgets. More recently, additional cost-cutting measures have been applied in all of the schools, operating units, and administrative departments.
Second, beyond this, it is – once again – important to recognize that Emory Healthcare and Emory University are very different businesses operating in very different marketplaces. Both entities place their highest priorities on recruiting, rewarding and retaining the best employees at all levels. Because both the operating circumstances and the primary sources of economic constraints are different, there will necessarily be different paths to achieving the shared highest priority focus on recruiting, rewarding, and retaining the best employees. Emory Healthcare had room in the marketplace to reduce benefits and still remain competitive. At present, the University does not have that same room in its competitive marketplace as it relates to retirement contributions.
In addition, the University – like other top-tier national research universities – relies on annual spending distributions from its endowment and other investments to support its operating and capital budgets. The worldwide equity market collapse beginning in September 2008 reduced the value of Emory’s endowment by at least 20 percent, resulting in a significant reduction in income from these sources beginning in FY10. Emory Healthcare, by contrast, has very little endowment and does not depend on endowment income to any important degree; The recessionary forces affect each side of Emory differentially and the responses will necessary vary with respect to content and timing.
Will there be a university-funded merit raise program?
Updated March 2009
No, not for the 2010 fiscal year.
Will there be changes to the alternative transportation program?
Updated April 2009
All transportation programs are being evaluated and some elements will be adjusted (see Emory Report's Cliff Routes, Schedules Changing) but we want to avoid changes that could have a dramatic impact on the community. In light of the economy, we may have to assess subsidies for some programs. View more at Transportation Services at Emory.
Will there be more emphasis on contract labor?
Updated June 2009
There is not an emphasis on contract labor. Using temporary staff for specific projects or short-term work is an option managers should consider. Emory has a successful and robust internal temporary placement service. For assistance in placing a temporary hire, please contact Emory Temporary Service (ETS). Regardless, all efforts should be made to more effectively deploy labor resources and reduce expenditures overall.
How can we help Emory community members? Does Emory Gives or Volunteer Emory help?
Updated June 2009
Programs available through the Faculty Staff Assistance Program (FSAP) can assist Emory employees and their immediate families. Please contact the Faculty Staff Assistance Program.
Through programs such as Emory Community Giving and Volunteer Emory we can provide financial resources and personal time to various organizations that strive to meet the needs of the community.
The Employee Council is researching the possibility of a voluntary emergency hardship fund.
What services are provided by FSAP that may assist community members?
Updated March 2009
Response consolidated below.
How should we be managing employee performance issues with unemployment so high?
Updated June 2009
It is important to continue to set clear goals, make sure expectations are clear, and provide frequent feedback to help employees perform most effectively. Managers should also promote and maintain clear and consistent communication through the organization. Employees should know where they stand, as well as where the department and university stand. Managers should not excuse or overlook performance weaknesses nor lower performance standards. During this period of hardship, however, managers would do well to pay close attention to feelings of stress and insecurity and the resulting performance disruptions that can occur during a slump. Divisional directors for employee relations in Human Resources are available to assist managers with these issues.
How will the economy affect key stakeholders? (Students and donors)
Updated March 2009
We remain committed to our undergraduate twin policies of need-blind admission and meeting 100 percent of demonstrated need. Emory's financial aid program is experiencing higher demand and increased costs for the institution.
For donors, the economic downturn may affect the amount or timing of a gift, the payment method (cash, securities, estate gift), and the length of the schedule of pledge payments. We remain committed to the campaign as Emory needs the support of its friends and alumni more than ever.
What is Emory doing to cut costs?
Updated June 2009
In order to pursue excellence in the context of fewer resources than previously planned, every school, college and administrative area has and will need to reduce activities and costs, ensuring that investments remain in the critical and highest priority areas (see "How is the institution setting priorities and what are they?")
Over the past four years, Emory has generated approximately $20 million in cost savings annually by restructuring debt, renegotiating virtually all major commodity contracts, consolidating and streamlining support services, improving technology systems and their delivery, eliminating land lines in residence halls, and other efforts.
Going forward, we will continue these efforts and focus on a wide range of new ideas and approaches. Emory is also encouraging all community members to conserve utilities and water and to recycle whenever possible.
Can we offer incentives to implement cost-containment initiatives?
Updated March 2009
We offer annual Sustainability Grants as well as Bright Ideas awards. Beyond that, the incentive is to help ensure that Emory remains an excellent institution with a sound financial footing. We hope that this will be incentive enough for every person to take the opportunity to contribute to Emory's success.
What is the current status of Campaign Emory?
Updated June 2009
The campaign has been underway for three years now, and we have already realized $927 million in gifts and pledges -- more than half of our goal. The current economic conditions do not warrant suspension of our campaign. If anything, now is the time to redouble our efforts to secure private funding and to offer opportunities for donors to invest in ways that produce dividends of the sort not available in financial markets. Just as the University has a strategy for navigating the new economic realities, we have a plan for managing the campaign through these times, and will continue to assess leading indicators and make appropriate adjustments along the way.
Why is DAR hiring when other departments are not hiring?
Updated June 2009
New revenue through private philanthropy is critical to Emory’s future, and investing in DAR by encouraging DAR leadership to continue to selectively hire talented staff who will generate greater levels of private funds and resources is necessary to increase the level of sustainable annual support to the University. During the next several years we will continue to grow new revenue sources, especially as other revenue sources contract.
Why are we building new facilities?
Updated March 2009
We are completing facilities for which we broke ground before September 2008. We are re-evaluating the timing for all other capital projects. Emory is committed to completing building projects that are currently under construction, i.e., "out of the ground." The timing of future construction will depend on funding and overall economic conditions.
Projects that the University has already started (including the new Rollins School of Public Health Building, the new admissions center and bookstore building on Oxford Road, and the next phase of the freshman residence complex near Eagle Row and Asbury Circle) will be completed as planned. The Woodruff Health Sciences Center has announced the temporary suspension of its major clinic and hospital construction projects on the Clifton Road and Midtown campuses, probably at least through the end of 2009.
Personal Questions
My spouse/partner has lost a job and I have financial problems.
I need to borrow money or I have a cash emergency and don't want to go to a pawn shop.
I am behind on my bills.
I am facing foreclosure.
I have creditors calling me.
The Faculty Staff Assistance Program (FSAP) offers individual counseling, career counseling, basic budgeting classes, and emotional support, 404.727.WELL
In addition to the FSAP there are many local resources available to community members, including:
- Angel Food Ministries, 770.267.7015, 888.819.3745, www.angelfoodministries.org
- Avvo.com: ask a real lawyer about foreclosure, credit or bankruptcy issues
- Buckhead Christian Ministries: 404.239.0058, www.buckheadchristianministry.org
- Care One Credit Counseling: www.careonecredit.com
- Catholic Charities: contact Carolyn Gilliard, 404.978.2763
- Christian Ministry Center USA - Operation Blessing: provides limited financial assistance for rent or mortgage payments, emergency needs in situations of catastrophic loss, and utility bills. Requests will be considered only if a letter is attached from a pastoral or agency representative. Payments will be sent directly to creditors, 678.986.2041, cmc-usa@juno.com
- Consumer Credit Counseling Service: call to get help stopping the phone calls, preventing foreclosures, reducing interest rates, and lowering monthly payments, 800.251.2227, www.cccsatl.org
- Emory Alliance Credit Union Member Express: emergency hardship loan up to $750, 404.329.6415
- Homeownership Preservation Foundation: call 800.995.HOPE (4673) to receive free counseling when you're facing foreclosure
- HUD website has valuable information on steps related to avoiding foreclosure: Help for Homeowners Facing the Loss of Their Home; Avoiding Foreclosure
- Jewish Family & Career Services: 770.677.9300, 404.873.1345
- Midtown Assistance Center: provides financial assistance to the working poor of downtown and Midtown Atlanta, 404.681.0470, www.midtownassistancectr.org
- National Foundation of Credit Counseling: www.nfcc.org
- Resource Service Ministries, Inc. - Salvation Army: contact Lynn Westergaard at 404.728.1341
- Sullivan Center: 404.753.0531, www.thesullivancenter.org
- St. Vincent de Paul Society, 770.458.5415, www.svdpatl.org
- United Way: 404.527.7200, or dial '211'
I am experiencing stress and it is affecting my work. Where can I go for help?
- Faculty Staff Assistance Program (FSAP): call 404.727.WELL to schedule an appointment
- The divisional directors for employee relations in Human Resources are available to assist managers with these issues
- The Emory Psychological Center: 404.727.7451 (Diane Brower, Manager)
- Emory Pastoral Care Services: during business hours, call 404.778.4691; after business hours and on weekends, call 404.712.2000; Ask the operator to page the on-call chaplain
- Emory University Department of Psychiatry - Outpatient Psychotherapy Training Clinic: 404.727.0399
- United Behavioral Health
- Emory University School of Medicine Mood & Anxiety Disorders Program: 404.712.MOOD
My child comes to Emory. Will the courtesy scholarship or aid be affected?
Updated June 2009
There currently are no plans to change the courtesy scholarship. It is possible that some minor adjustments will be necessary in the future if financial conditions continue to worsen, as is possible with all benefit programs. More generally, the University continues to be committed to Emory Advantage and the basic principles of need-blind admission and meeting demonstrated need for dependent, undergraduate students. University programs remain sound, and we are exploring alternative options for families with exceptional circumstances. However, we do expect the Federal Stafford Loan and Parent /GRAD PLUS loan programs to remain options for many, given the legislation noted below.
With the 2009-10 academic year approaching, students should apply for financial aid early so that we can provide the best review and financial aid package possible. Any changes in family financial circumstances should be noted and documented during application. Families are encouraged to be creative and review external scholarship sources as well as consider part-time student employment.
Congress introduced legislation to ensure continued access to student loan programs. This legislation (Ensuring Continued Access to Student Loans Act) signed by the President on September 27, 2007, instills liquidity into the student lending market and allows the Department of Education to purchase FFELP student loans.
Can I get an advance on my salary?
No. Emory does not allow advances on employee salaries.
Can I cash out my vacation and sick leave?
Not if you work for Emory University rather than Emory Healthcare. According to Emory's Leave Policy a University employee can receive compensation only for accumulated vacation leave at the time of separation with a minimum of 6 months of consecutive service in a benefits-eligible position. Emory does not provide compensation for accumulated sick leave. (Review the policies.)
What happens if my bank is in trouble? (FDIC increase)
The Federal Deposit Insurance Corporation (FDIC), or the National Credit Union Administration (NCUA) in the case of credit unions, has raised the insurance limit for individual bank deposits, from $100,000 to $250,000. If you have $250,000 or less in an IRA, checking, or savings account, and your FDIC-insured bank fails, you would be covered against any loss. Joint accounts, owned by two people who have equal rights to withdraw money from the account, would be covered up to $500,000 ($250,000 each).
What is Emory doing to help me reduce my costs?
Emory offers several programs that can help you reduce costs or save money through discounts. Examples include: Sparkfly, Alternative Work Arrangements, and Emory Moves, the commuter options program.
What should I be doing with my 403(b) investments? Should I draw down from my retirement plan or decrease my deductions?
Updated June 2009
For information regarding retirement benefits, go to the Emory Human Resources Web site.
Emory's retirement vendors -- TIAA-CREF, Fidelity and Vanguard -- all provide access to individual counseling, to help you make decisions about your investments and savings. To make an appointment, contact your vendor.
- Fidelity: 800.343.0860
- Vanguard: 800.523.1188
- TIAA-CREF: 800.842.2888
