Emory and the Economy

Letter to Emory College Faculty and Staff
From Dean of Emory College Robert A. Paul on the State of the College
Distributed by email June 11, 2009

Dear Colleagues,

As another academic year ends and we continue our planning for the next, I want to take this opportunity to follow up on the recent State of the College meetings by briefly addressing the economic downturn, the changes it has brought to the College, and the further changes we can expect it to bring over the next few years. I would also like to describe some of the steps that the faculty and College administration are taking to meet these unprecedented challenges.

The worldwide economic slowdown has affected the operations of every academic institution across the country, and Emory of course is no exception. In this, the most severe fiscal climate we have seen in many decades, both of our primary sources of revenue—tuition and endowment income—seem all but certain to decline in the short term. Among other factors requiring us to find ways to cut costs across the College are financial aid—requests for which have risen dramatically as families of college-aged children respond to the recessionary pressures of rising unemployment, dwindling investment income, and stagnated wages—and our increased level of support for the Emory Advantage program and the Graduate School, both of these commitments representing essential components of our long-range strategic planning.

Every projection of which I’m aware suggests that this economic crisis will be both long and deep, with effects on the University’s endowment in particular extending until at least 2015. This is clearly a very serious situation, and one that we will be facing for, at a minimum, several more years.

In responding to the resulting budget crisis, the College administration is guided by these principles:

• We will shield our core curriculum, the cornerstone of our mission, and so continue to provide our students with an exceptional academic experience
• We will ensure that the best and brightest students can study at Emory regardless of their financial situation
• We will work to advance research of the highest quality
• We will strive to minimize the effects of the downturn on the employment of current Emory College faculty and staff

Under these guidelines, and with the counsel of the Provost and my Senior Associate Deans, I directed this fall that all faculty and staff searches be reexamined. I also asked departments to cut temporary faculty budgets by 50 percent and non-personnel budgets by 10 percent, measures which enabled us to close our budget gap this year. In the coming year (2009-10), additional cost-cutting measures will be necessary. Wages will be held flat—with the exception of salary changes for promotions—and I will be asking for further budget reductions as we move forward.

I should point out that despite the downturn, the College has made some important recent hires. Ten of our original 23 approved searches have been allowed to proceed, with an additional 7 hires approved as well. Nearly all of these have been funded from sources outside the College, plus one or two hires made before the present pause was in place.

In these hires, as in all our strategic thinking, we have been guided by one of President Wagner’s recently articulated principles for University planning: that our goal should be not reduced funding for every project, but rather increased funding for fewer, targeted initiatives. This will serve to consolidate our strengths as we move through the coming years of financial uncertainty.

In light of the long-term nature of this economic situation, we must resolve to think long-term as well. This means, first, recognizing that further cuts are inevitable as the economy takes its slow course through this recession. It also means thinking creatively, and collectively, about how we can nevertheless preserve and even enhance the essential character of the College—its undergraduate experience, its intellectual enterprise, its infrastructure and research support—during such demanding times.

A number of other things are important to keep in mind as we face this crisis. One is that while endowment income has fallen, other sources of income may help offset that loss, including income from tuition, gifts, and indirect cost recovery. While the endowment is an important engine of our shared economic life, it is not the only one.

Fundraising is certainly a revenue source—although this too can undergo stress from economic conditions like these—and particularly the Annual Fund, whose proceeds go directly into our budget. As I announced recently, my four Senior Associate Deans and I have decided to donate 2% of our salaries to the Emory College Fund for Excellence, and I welcome any of you who wish to join this effort. Such a gift has three distinct advantages. One, it leads to direct budget relief for the College, since Fund for Excellence dollars are immediately expendable as financial aid; two, one’s salary base remains whole, so when raises come again, they will be based on current salary; and three, the gift is tax deductible. Furthermore, all such gifts will contribute to the current comprehensive campaign. If you are interested in pursuing this option, please contact Jeff Prince (jprince@emory.edu).

It is also essential to recall that the faster we take measures to address this situation, the faster we will begin to recover from our losses. We now have in place a committee to help us do that. The Financial Advisory Committee will focus on immediate financial solutions—those that can be implemented within the year. This committee, appointed by the Governance Committee, consists of Micheal Giles (chair), Steve Everett, Pam Hall, George Jones, Bobbi Patterson, Elaine Walker and Eric Weeks. I encourage all of you to share your ideas for addressing the budget situation with these colleagues. Their goal, and ours, is to ensure that even in straitened times like these we can maintain our focus on first-rate research and teaching.

With the committee’s help we are weighing such measures as increases in:

• the size of the freshman class, with attendant increased tuition
• the percentage of transfers we accept
• our retention rate, which is currently lower than at many of our peers
• indirect cost recovery—grants for research which can then free up funds for other forms of support

We are also piloting a Pre-College Program this spring, and we will be exploring ideas for innovative Summer School programs, both of which have the potential to generate dependable revenue streams.

As President Wagner urged in his letter this spring, our strategy must be to adopt a kind of “constructive double vision” in which immediate financial problems receive our close attention, but not at the expense of long-range vision. We will need to frame our financial solutions, therefore, by planning not only for next year but for the College of 10, 20, 30 years into the new century.

This is the purpose of the new College Revisioning Committee. I have charged its members—Keith Berland, Huw Davies, Micheal Giles, Leslie Harris, Rosemary Hynes, Michael Moon, Sally Radell, Rick Rubinson, Karen Stolley, John Stuhr, Vaidy Sunderam and Claire Sterk, along with Patricia Bauer, Joanne Brzinski, Cris Levenduski, Kim Loudermilk and myself—with thinking beyond our immediate financial challenges to truly re-imagine what Emory College might be. I look forward to working with both of these committees in their different tasks, in a fruitful and collaborative process articulated by President Wagner’s final principle, that in reshaping the University’s work “decision-making must come from the deepest appropriate levels of the organization.”

We remain committed to an Emory College that is strong, vibrant, and excellent. Through our collective creative energies we will address the financial challenges to be sure, but we will do much more. I am confident that we are poised to put in place the building blocks for a reconfigured College. While the task may seem daunting at one level, it is what we do best: critique, refashion and redesign. Thanks in advance for your willingness to serve as architects of Emory College’s future.

Sincerely,

Robert A. Paul, Dean
Emory College of Arts and Sciences