President’s Annual Address to the Faculty

September 15, 2009

Welcome and thank you for coming. It is a real pleasure to see you back for another year. And I want to welcome most warmly new faculty to Notre Dame. It is great to see you all.

My favorite time of the year at Notre Dame, I confess, is the summer. I particularly enjoy early August, when the campus is empty and I can take a reflective stroll taking in the beauty of summer. That experience abruptly ends with the return of the students, and that empty campus becomes a hive of activity. That is alright, though, because my second favorite time of year is the beginning of a new school year with the energy, excitement and renewed purpose of a new academic year. And it is with that sense of excitement and renewed purpose that I address you, the faculty, at the beginning of the 2009-10 academic year. No group is more important to Notre Dame, for you do the University’s central work of teaching and inquiry.

Last academic year, 2008-09, was probably the most challenging and most rewarding of my tenure as President. We faced a world financial crisis that continues to have an enormous impact on higher education in this country. We also had a Commencement that may have been watched by more people than any Commencement in the history of American higher education.

I will have more to say about our financial situation later. Regarding our Commencement, I hope you all felt as much pride as I did at the way our students carried themselves, both those who agreed with the invitation to the President and those who did not. Both groups acted according to their convictions, engaged in serious discussion and did not let the frenzy outside of campus undermine the respectful interchange that should characterize any university, and particularly a Catholic university. To my mind, our students were the real stars of Commencement. And their commendable behavior was a reflection of you, their teachers. So I congratulate you too.

And I also want to say a word to those of you who disagreed with the decision to invite the President. I know that your disagreement arose from sincerely held and carefully considered principles and from a desire for Notre Dame to live up to its highest ideals. I thank you for giving reasoned expression to your dissent. Our University is richer because of your presence here.

Regardless of your position on the invitation, I believe the commencement itself illustrated Notre Dame’s unique place in higher education. Where else would such an event create so much passion? What other campus could be the trigger for such a vigorous discussion of morality, faith, and public life? We recognize our role both as a source of opportunity and a weighty responsibility.

I thank all of you. Through your efforts, we have built a reputation for seeking intellectual excellence and are rightfully considered among the nation’s top schools. Through your contributions, we also have a reputation as a place for serious discussion of moral and religious matters.

So, even though 2008-09 was a challenging year, it was also a rewarding year. And I hope this year will be the same; well, maybe not exactly the same.

Today, I will speak about our progress on our three central goals of offering an unsurpassed undergraduate education, becoming even more preeminent as a research university, and ensuring that Notre Dame’s Catholic character informs all that we do. I will not attempt to be comprehensive, but will simply bring to your attention some timely issues and initiatives. I will begin with our financial situation and efforts in strategic planning, both of which are important for the achievement of these goals. I will also highlight some of our wonderful faculty research, our efforts to improve our diversity and relations with the local community.

I. Finances

The financial situation of the world, the nation and the University shapes the possibilities open to us and influences our strategies. The core message today is that Notre Dame is in a strong position relative to our peer institutions, but we are not out of the financial woods yet. That means we can, unlike many others, make progress toward our goals. Still, we must also watch our spending and make cuts where possible.

Like everyone else, higher education faces a raft of challenges in this economy: rising student financial assistance, Congressional pressure to restrict tuition increases, competition for research dollars, and declining financial markets. We have seen a drop in endowment values and donor giving.

Other top research universities have been forced to make all kinds of budget adjustments: layoffs, salary and hiring freezes, retirement incentives and delayed capital spending. Some public systems, such as California’s, are struggling. And a recent survey of independent colleges and universities found that 61 percent are planning to freeze or cut salaries across the board.

What Notre Dame has done is different. There have been increases in faculty salary, endowment payout and student financial aid. We have filled open faculty positions and instituted voluntary savings. We have made plans that include programs to reduce expenses and raise revenues. And we have continued progress on new facilities and renovations, including completion of another addition to dorm life, Ryan Hall. The new Stinson-Remick Hall of Engineering, which will house state-of-the-art nanotechnology research and energy centers, opens early next year. The Law School greatly expanded its facility, but a more important addition is the new Dean, Nell Newton. Dean Newton specializes in American Indian law and brings a wealth of experience from positions as dean at the Hastings College of Law of the University of California system, the University of Connecticut and the University of Denver.

We have been able to continue our progress largely because we have adhered to a conservative financial policy. This approach includes a sustainable rate of payout on the endowment and a Trustee-established building policy that requires a building to be funded before we begin construction. Most importantly, we are blessed with a superb financial team. Scott Malpass and his team make up one of the very best investment offices, which can be objectively measured by rate of return on investment. John Sejdinaj and his team just last week refinanced $146 million in variable rate debt to take advantage of current low fixed interest rates. The bonds sold for a 4.28% yield, close to a 30 year low, which will save the University millions of dollars that can be directed to our most important priorities. And John Affleck-Graves oversees finances so effectively and directs funds to central University goals and academic priorities.

Our efforts are getting noticed. Partly because our financial situation makes us more attractive, we had an excellent year in hiring across the University. We hired 48 teaching and research faculty. And in Arts and Letters, a remarkable 85% of our first choices took positions offered. We are fortunate to be joined by such a talented group of new colleagues.

We were also able to announce this past July that we had reached our $1.5 billion dollar goal in the Spirit of Notre Dame fundraising campaign. This makes our campaign the largest for any Catholic institution of any sort anywhere. Congratulations to Lou Nanni and his team, and thanks and congratulations to many of you who have worked hard to secure important gifts for the University. Still, like all universities, we saw a marked downturn in giving after the recent financial crisis, and we do not expect this to come back immediately.

The University’s sources of revenue are diverse, as you can see. We would like to increase the research portion, which is on the low end among our peer institutions. Right now, auxiliary sources, which include football, are offsetting this. You can also see that the bulk of our resources go to our core mission, teaching and research.

The endowment, most of you know from meetings last Spring, was about $7 billion before it dropped substantially. It has now rebounded to about $5.5 billion, which is still the third highest close ever for a financial year. We implemented a voluntary savings plan in response to the economic downturn. I want to thank all of you who have contributed to its success. And our financial team prudently created detailed contingency plans in case the figure drops below $4.5 billion or $4 billion. We do not expect such a decline of value to occur, but we are prepared in case it does.

Though we are pleased with our relative position, we must all realize that the budget situation remains serious. Our biggest concern is not this year but next, because there could be a cumulative effect of the crisis on the endowment and on giving. As a result, there is pressure to hold the line on tuition and keep increases below that of previous years. We budgeted for a 9 percent increase in student financial aid, but the rise in need is coming in at about 15 percent. We can’t continue this rate of growth without other cuts or new funding sources, but continuing our need-blind admissions policy is a priority. We must look for external funding to grow research, and we must be willing to reallocate funds to take advantage of opportunities and grow where we need to grow.

There is an important aspect to Notre Dame’s financial picture that goes well beyond finances—the generosity and commitment of so many of you. Thank you to those who regularly donate back to the University. At Tom Burish’s address, a faculty member volunteered to give up his salary increase so that the funds could be distributed to lower-income employees. The Officers and Deans also took no pay raise this past year. I want to acknowledge and thank them. I want you to know these funds were valuable to us. But more valuable than any amount the University realized was the expression of a generous dedication to this University and this community.

II. Strategic Planning

Strategic planning is always important, but it is particularly crucial when resources are more scarce and decisions more difficult. Every ten years, the University engages in a strategic planning process. The last one was completed in 2004, and this prepared the way for a development campaign. We are now five years into the current plan. As we know, a lot changes in five years, and new opportunities and new challenges arise. Thus I have asked the members of the Officer Group and the Deans to update their plans, and they have drafts of these updates.

In the past year, I have also reorganized the Office of Institutional Research into an Office of Strategic Planning and Institutional Research and appointed Erin Hoffman Harding to direct it. Its task is to assist the entire University in evaluating opportunities and threats and engaging in innovative planning for our future. At great organizations of any kind, strategic planning is not episodic, but continual. We must continue to make informed planning part of the culture of the University.

With this financial environment in the near future, we cannot count on additional resources to begin worthy new initiatives while continuing all previous efforts. If we want to take advantage of opportunities, we will be forced to reallocate funds. Those decisions will no doubt be difficult. But they will be better accepted and more valuable for the University if they are based on careful thought and discussion about the opportunities before us and our plan to take advantage of them. We must continually evaluate our progress on central goals and revise our strategy with an eye to emerging opportunities and challenges.

III. A Premiere Research University

While we should not be complacent with our position as a research university, we are justifiably proud of our progress. Over the last decade, we have led the nation in National Endowment for the Humanities Fellowships. We have also focused on increasing the number of science and engineering grants and realized great success in both. The amount of research grants fluctuates from year to year, but the University’s total research expenditures continues to climb steadily and now approaches $100 million per fiscal year from nearly 500 grants.

I cannot mention all the noteworthy research achievements in this address, but I will describe just three as representative of the work our faculty does.

Professor Christian Smith, director of the Center for the Study of Religion and Society, was awarded a $5 million grant from the John Templeton Foundation to study “The Science of Generosity.” A multi-year project that began in January, it is the largest grant ever received by a faculty member in Notre Dame’s College of Arts and Letters. Current academic studies on generosity are a scattered constellation of research projects operating under different terms – such as philanthropy, giving, charity and altruism. We anticipate a more unified field will develop around the Notre Dame initiative and we will be situated at the forefront.

Professor Kasturi Haldar, director of the Center for Rare and Neglected Diseases, and her team seek to meet a need in health care arising from the economics of the market. You may have seen Professor Haldar in an ad during the last football game. We should apologize for making her a reluctant TV star. The center is focusing on diseases that cause suffering and death across the globe, but that unlike cancer, have been largely ignored by pharmaceutical companies because they do not promise the same potential profits. Notre Dame is uniquely positioned to fill this hole in health care.

Professor Peter Burns directs the Energy Frontier Research Center, which was established with an $18.5 million grant from the U.S. Department of Energy Office of Science. The Department selected Notre Dame from a pool of 260 applicants for one of 46 centers that will impact the future of energy in the nation. Research in the center seeks to understand and control materials that contain actinides at the nanoscale, an area where we have excelled. This research aims to lay the scientific foundation for advanced nuclear energy systems that may provide much more energy while creating less nuclear waste.

These, then, are some examples of large projects with significant external funding. But I want to emphasize that the work of each and every one of you in scholarship, research, and creative expression is deeply valuable to Notre Dame and the world. As a scholar of medieval philosophy, I know that not all scholarly work is supported by large grants nor can it be readily connected with some widely recognized contemporary problem. Yet all this work is part of the University’s essential mission of seeking a deeper understanding of truth, and it is cherished for that reason.

IV. Diversity

We are committed to building an intellectual community that is more diverse in ethnicity, socio-economics and gender. Over the last decade, Notre Dame has made some progress. The percentage of faculty that are women has grown from 19 percent in 1999 to 24 percent last year. The percentage of minorities has increased from 12 percent to 14 percent in that period. This is a start, but we can do better. Working together, we can build a fully diverse community. We recognize that a more diverse faculty and student body is a richer community for learning, discussion and inquiry, and one whose graduates are better prepared to live and work in a world that becomes flatter and more global each year.

Don Pope Davis, vice president and associate provost and professor of psychology, directs University efforts related to faculty of color. Susan Ohmer, William T. and Helen Kuhn Carey Associate Professor of Modern Communication, has been appointed assistant provost and coordinates oversight efforts relating to women faculty. Pope-Davis and Ohmer will work closely with deans, department chairs and others involved in faculty recruitment, hiring, retention, mentoring and development.

This fall the Provost’s Office will launch the new Moreau Academic Diversity Postdoctoral Fellowship program. The initiative is intended to attract scholars from historically underrepresented groups in American higher education and, more broadly, those in any discipline whose teaching and research engage issues of multiculturalism and diversity. These two-year fellowships will develop a pool of candidates who can be considered for more long-term appointments. They will also serve to publicly identify Notre Dame’s efforts to foster serious dialogue about the importance of cultural diversity within a liberal education.

V. Relations with the Local Community

We have also made investments of time, effort, and resources in the local community. Notre Dame needs a thriving local community to reach its highest potential. Our students, faculty and staff are a part of that community, and we will attract faculty and students to Notre Dame only if our community is thriving.

The most visible signs of our commitment are two major developments just south of campus. Eddy Street Commons, opening up stores as I speak, is literally building a commercial bridge between the University and the city. This collaborative effort of Kite Realty, the city and the University creates new restaurants, stores, banks, apartments, hotels and offices during a time of recession, when new investment is most welcome. I think it will provide an element of commercial life within easy walking distance that has been missing for our students and employees. And I hope Innovation Park, opening in October, will become a launchpad for new tech businesses to develop in a region that very much needs new businesses. Research parks associated with other universities have helped move exciting discoveries from initial concept to commercial opportunity. I hope we will create a path to turn intellectual property into products that can improve people’s lives.

We also have made significant financial commitments to invest in the community. This summer, we announced a pledge of $5.5 million over ten years for South Bend and other local governments that are experiencing an extraordinary financial situation. The Robinson Center and Notre Dame Downtown continue to enhance the lives of children and seniors and everyone in between with a broad range of outreach programs.

As an expression of our commitment to maintaining strong community relations, we have recently hired Tim Sexton as associate vice president for public affairs. Tim grew up in this community, attended Notre Dame, and comes to us from a successful career at St. Joseph Medical Center. He will bring with him strong connections with our local community.

Many of you also contribute your personal time and resources generously to local charities and civic groups. I want to thank you and encourage you to continue to support and strengthen this community. You provide important leadership.

Conclusion

I began this address by talking about Notre Dame’s distinctive role in higher education. The heart of that distinctiveness is to strive to achieve three central goals which can sometimes be in tension—superb undergraduate education, preeminence in research, and ensuring our Catholic mission informs all our endeavors. Other great universities have recognized the tension between a commitment to research and to undergraduate education, and I am proud of the way you have continued to make the education of undergraduates a cornerstone as we strive to be even stronger in research. Our commitment to our Catholic mission creates its own set of challenges and tensions. Yet it is precisely because we hold these goals simultaneously that we have such a special mission and play such a distinctive role. And our achievements are due to the efforts of you and many others.

For me, one of the memorable moments from our Commencement this year was waiting in line. I happened to be standing alongside and chatting with the President of the United States. As we chatted, his youngish aids would come up and rattle off instructions about when he was to sit, stand, and talk. After one such interchange, he turned to me and said, “This is how it is. You are elected President of the United States, head of the free world, and your life consists of taking orders from young people in their 20’s and 30’s.” That remark was a reminder to me that, in any position of leadership—even one as exalted as the President of the United States—one is still part of a team and relies on the direction and efforts of so many. I know I rely on your direction and efforts, and I feel blessed to call you colleagues.

Thank you, and let’s make 2009-10 another great year for Notre Dame.

Rev. John I. Jenkins, C.S.C.
President