President’s Annual Address to the Faculty
September 14, 2010
Welcome and thank you for coming. It’s a pleasure to see you back for a new academic year. Let me extend a particularly warm welcome to our new faculty. We are delighted to have you join us, and we wish you every success.
Summer brings at least a different pace for most of us. One of our colleagues and his spouse could not be said to have had a restful summer. Greg Crawford, Dean of the College of Science, and his wife Renate, rode their bikes 2,300 miles from Tucson to Notre Dame in August. I’m told it was hot…
They did this to draw attention and support to Notre Dame’s expanded collaboration with the Ara Parseghian Medical Research Foundation, which seeks a cure for Niemann-Pick Type C, a terrible disease that killed three of Coach Parseghian’s grandchildren. Notre Dame’s Center for Rare and Neglected Diseases is part of the effort, fulfilling its mission of treating illnesses that do not draw as much investment from the drug companies.
I am inspired by Greg and Renate’s dedication, yet I find it to be a prominent and public manifestation of the dedication so many of our faculty here at Notre Dame exhibit in contributing to their field of study, to their students and to the world. You may not have been on a bike in 107 degree heat on a 2,300 mile journey, but in different ways, many of you have made sacrifices, gone above and beyond reasonable expectations, and made remarkable contributions to research and scholarship. We thank you for these contributions.
Looking to the Future
Last year our Board of Trustees renewed Tom Burish and me for another five-year term. John Affleck-Graves, our Executive Vice President, had been renewed the previous year for a five-year term. While gratified by the Board’s confidence in us, we saw this reappointment as a charge to continue to help Notre Dame progress, and I am sure I can speak for Tom and John in saying we will work very hard to fulfill that duty.
In my address today, I will speak briefly about our progress on our central goals in the last five years and discuss plans for the next five years, particularly in light of the current challenging economic situation.
Before I turn to that, however, I want to introduce three important new members of my leadership team.
The Office of Student Affairs is a critical part of our educational effort at Notre Dame. That office oversees student life in our residence halls, which is one of Notre Dame’s most valuable traditions. I am very pleased to announce that Fr. Tom Doyle will take up the leadership of that division as Vice President of Student Affairs. He recently served as executive vice president at the University of Portland, but this is a homecoming for him. A 1989 ND graduate in philosophy (a clear indication of wisdom) and former Student Body President, he spent his early years as a priest as the first rector of Keough Hall.
In coming years, internationality in all its aspects will be a point of emphasis at Notre Dame, and for this reason, Tom Burish created the new position of Associate Provost for Internationalization. Nick Entrikin will lead our effort to enhance the international components of Notre Dame. Nick recently held a similar role at UCLA, where he was also for the last 35 years a professor of human geography with a focus on culture and environmentalism.
In any modern research university, information technology is a critical part of our infrastructure. We are extremely pleased to have Ron Kraemer join us as our new Vice President for Information Technology. Ron comes to us after serving 14 years at the University of Wisconsin, most recently in a similar role as chief information officer. He brings further technological experience from his work in the aerospace industry and at the University of Tennessee.
Other important searches now underway in Tom Burish’s office are for the University Librarian and for the Associate Vice President for Undergraduate Enrollment.
Progress on Central University Goals
Let me speak briefly about our progress in recent years. When I became president, we identified five central University goals.
Our first goal was being a pre-eminent research university and we have made significant forward progress in this area. For the first time this year, we crossed the $100 million mark in external research funding. We also invested $80 million of our own money in priority research initiatives through two rounds of Strategic Academic Planning Committee grants. And the opening of Innovation Park will help turn your cutting-edge discoveries into viable businesses. One confirmation of our progress is our selection to host the Midwest Institute for Nanoelectronics Discovery, one of four centers in the country. Several new state-of-the-art facilities also help Notre Dame to attract highly competitive projects and to recruit top new faculty.
Facilities and faculty are also fundamental to our second goal: offering an undergraduate education that is unsurpassed. In the last five years, we have opened two new learning facilities – the Jordan Hall of Science and Stinson-Remick Hall for engineering. We have added two new residence halls – Ryan and Duncan – to maintain our tradition as a residential campus. We have improved our scholarship programs by expanding the Glynn Family Honors Program and establishing Hesburgh-Yusko scholarships to attract top students. And we have achieved a new ranking that reflects our ambitions – BusinessWeek’s #1 spot for the Mendoza College of Business. Most importantly, we hired and supported all of you – the talented and dedicated teachers to instruct our undergraduate students.
Although listed as a separate goal, our Catholic mission is really a commitment that informs all our endeavors. Whether it is the quality of our undergraduate residential life, our research in rare and neglected diseases and environmentally friendly technology, or our superb theology department and strength in Dante studies, these efforts and many more reflect our distinctive Catholic mission. There are, nevertheless, several especially noteworthy initiatives in support of our Catholic mission.
We recently opened Geddes Hall to house the Institute for Church Life and Center for Social Concerns. We have launched an interdisciplinary Peace Studies Ph.D. program to deepen our understanding of violence and how to promote peace. We established the Keough-Hesburgh endowed chairs for top scholars who will advance some aspect of our Catholic mission. The Alliance for Catholic Education launched new initiatives to promote leadership, Catholic education and Latinos in Catholic Schools. And we have acted on recommendations from a Task Force I formed last year to consider ways in which the Notre Dame community can deepen the respect for life from conception through natural death.
Although we are committed to diversity at Notre Dame for many reasons, it is also part of our Catholic mission. This is the inaugural year of the Moreau Academic Diversity Postdoctoral Fellowship Program, which offers superb scholars from underrepresented groups a two-year research, teaching and mentoring experience. Eleven fellows, representing a wide range of disciplines, will be with us for at least the next two years with the support of the colleges, the Office of the Provost and my office.
Another goal was to provide operational excellence. We have used the ImproveND and ND Renew surveys to evaluate and improve our service and compensation systems. We created the Office of Sustainability to reduce waste and lead our conservation efforts, and we have constructed all new buildings to meet the highest environmental standards. We launched the Office of Operational Excellence to improve efficiency, and we ran a successful capital campaign that helped us, among other things, increase financial aid.
The final goal was strategic communications. In that area, we improved our online presence by upgrading the home web site and launching a Pray@ND site and a new Gameday site for football weekends. We started new promotional campaigns to publicize everything from our local Irish Green festivities to the national NBC commercials on our research efforts. We also won national public relations awards in crisis communications and magazine excellence.
We all have much to be proud of as we look back over the past five years, and I am grateful for the efforts of so many that made these achievements possible.
The accumulation of these accomplishments gives the University something more, something of great value for any organization. We have—and are seen to have—positive momentum. We are not only a respected institution holding its own, but one that is on the move.
If we are to maintain and even increase that momentum, we must do so in an uncertain, and possibly very difficult, economic environment. This environment will be perhaps the most important factor in shaping our plans for the future.
The four major sources of revenue for our initiatives at the University are endowment returns, tuition, benefaction and externally sponsored research funding. We expect each of these to be under some pressure in coming years.
I recently spoke with Scott Malpass, our chief investment officer, who believes that we are still riding through a financial crisis despite some economic growth this year. High unemployment, high debt as a percentage of economic output and low levels of bank lending despite a zero percent Federal Funds rate are all signs of that crisis. Scott believes that capital markets will remain volatile in the short-to-medium term throughout the global and domestic economy. Our endowment performance remains uncertain, and we cannot rely on it as a source for growth. There is the possibility of another severe economic downturn, and if that happens, we will have to take aggressive steps to reduce costs.
Second, because families are feeling the same pinch from this turbulent economy, we must keep tuition increases low. This chart Student Charge Increase shows the tuition, room and board increases over the last five years. We have trimmed total student charge increases by more than a third between the 2007 and 2011 fiscal years.
At the same time, the economy is also forcing our students to seek more financial aid to pay for their education. Since we decided to pursue a need-blind admissions policy and pledged to cover the full demonstrated need of every accepted student, our financial aid numbers, seen in this graph Increases in Financial Aid, have increased substantially. We are approaching $100 million this year and expect financial aid requests to continue increasing.
Our University Relations Office continues to do truly superb work to support our efforts. The Spirit Campaign, which will end in July of 2011, has been extremely successful. We are approaching $2 billion and, should we achieve that mark, we will be the first university in the nation without a medical school to do so in a seven-year campaign—a remarkable accomplishment.
But in this uncertain economy, even those who have resources are reluctant to make commitments. According to the Chronicle of Philanthropy, gifts of $1 million or above to universities are down 64 percent this year as a national average. These transformational gifts to Notre Dame have also slowed considerably with the economic crisis, decreasing by 53 percent between the 2008 and 2010 fiscal years. Though we have beaten the average, we have still felt a major impact on giving to Notre Dame at all levels.
Externally sponsored research funding has grown as our research activity has become stronger and broader. We believe this will continue, although we expect overall federal research funding will decrease as government stimulus funds are depleted.
Any decisions we make in coming years at Notre Dame must be informed by the realities of the current economic situation. One of my central principles as President is to deliver to my successors the same strong financial position that I inherited when I took office. That position was achieved through prudent, far-sighted financial policies, and those are the kind of policies that I will insist we maintain.
That said, and despite these serious financial challenges, there are opportunities for Notre Dame to make progress in the current situation. While all of higher education is facing difficulty, Notre Dame’s financial position is relatively strong. As some departments witnessed last year, our ability to hire in a year when a number of prestigious institutions had frozen hiring put us in a strong position in attracting excellent faculty. Our relative strength may enable us to identify and capitalize on a range of opportunities in coming years.
Reallocation and Investment
Because it will be more difficult to fund new initiatives from the University’s major sources of revenue, it is likely that to a large extent we will be able to invest in academic programs insofar as we are willing to reallocate current resources. In the past year, the University has been successful in reducing spending in certain areas so that funds can be directed to higher priorities.
Last year we asked you to take steps to limit discretionary costs—and you responded. Some examples are the following.
- Your efforts to purchase standard computers through the Lenovo agreement have had a significant impact on expenses. In the academy alone, these purchases have saved $348,000 in costs over the past 18 months. The average cost of a computer purchase has dropped 25 percent during that time period.
- You have been extremely cooperative in purchasing laboratory supplies through our preferred supplier, resulting in $200,000 in annual cost savings.
- Travel and entertainment expenses are a discretionary spending area where we’ve dramatically reduced costs. Two years ago, we reduced expenses in this category by $1 million. This past year, we doubled that, reducing expenses an additional $1.5 million.
- Finally, we asked you to reduce the consumption of electricity in your offices and laboratories and you’ve responded with resounding enthusiasm. This is an area that is especially important to me because it reflects not just a way we can control costs, but a commitment to stewardship of our natural resources that is an essential component of Notre Dame’s Catholic character. I’m pleased to report today that we’ve reduced our electricity consumption significantly for two straight years, as shown in this chart. This is something that hasn’t happened at Notre Dame since the 1970s. And there’s more to this story. Not only did we decrease our electricity use, but we did so at a time when the campus significantly expanded. The shaded area in the background of this chart shows the gross square footage of campus over time, with the red line reflecting electricity consumption.
Each of these efforts frees up precious budget dollars that can then be directed to areas of priority for our central mission.
If we can, on one hand, identify opportunities for Notre Dame, and on the other hand, be prudent and disciplined in reallocating funds to central priorities, we can make significant gains not only despite – but perhaps because of – the current challenging environment. Such progress will require both shrewd identification of areas of opportunity and tough fiscal discipline to redirect resources.
If we are to identify and take advantage of opportunities, we will need the highest level of strategic thinking and planning. For this reason, last year we asked the major units to review and update the strategic plans created before the launch of the current Spirit of Notre Dame campaign, and I asked Tom Burish to review and update the university-wide academic strategic plan. Tom and I, along with John Affleck-Graves, have met to discuss these plans.
We must, at the level of the central administration, the colleges, and the departments, ensure that we make incremental progress on our central goals. This requires, for example, that we continue to improve library resources; that we strive to make faculty salaries competitive with the best universities; that we increase support for graduate students; and that we do all we can to provide superb facilities for teaching and research.
Yet there are also investments we can and should make that will sustain and create new areas of excellence. We want to make possible not simply incremental progress, but also transformational change at Notre Dame, such as the centers of excellence the two SAPC funding processes helped create.
There are many areas worth considering for such investment. One suggestion is that we develop a major longitudinal survey of religious belief and practice. Another is that we create a research institute with a translational focus, such as a center to develop the next generation of ultra-efficient aircraft engines through the work of our stellar aerospace faculty. Or, create an interdisciplinary team from across several departments and colleges that could help developing nations strive for political stability and economic prosperity. A third suggestion we have discussed is to fund new faculty positions strategically targeted to create programs and departments that are pre-eminent.
These are some examples of possible transformative initiatives. We will continue to gather information and engage in discussions that will enable us to make sound decisions about possible initiatives.
As we consider these or others possibilities for transformational investment, Tom Burish has formulated several criteria for evaluation of them.
- Impact: Is the area an important one that the world cares about?
- Distinction: Is the area one in which Notre Dame can reasonably assume it can make an important, valued and distinctive contribution, within a reasonable length of time?
- Sustainability: Is the area one in which we have the resources to launch or bolster the program and sustain it at a high level over time?
- Mission: Is the program consistent with, and preferably contributing to, the two other components of Notre Dame’s three-part mission?
The challenge for Notre Dame in coming years will be to recognize the pressures of the current situation, to anticipate potential threats, to make fiscally prudent and far-sighted decisions, and, at the same time, to reallocate resources and seize opportunities that continue the momentum we now have on our central goals.
A recent study of businesses in a recession found that 20 percent of businesses failed, 54 percent of businesses survived and stayed the same, and 6 percent of businesses became stronger.
I am confident that Notre Dame will not regress in the current situation. The question before us is whether we will respond to the current challenges by remaining static, or, through innovative plans and tough decisions, we become stronger. My commitment, and the commitment of those who work with me, is that we will do everything we can to seek opportunities and take advantage of them so as to become stronger, even while remaining fiscally prudent.
We cannot lose our momentum simply because the economy is uncertain. There is too much at stake in the world today. The struggle to be a great Catholic research university in a world that has become both increasingly secular and more radically religious has placed Notre Dame in a unique position at the heart of the most complex issues facing our society.
A glance at newspaper headlines shows that religious strife can complicate efforts to spread peace around the world. We read about pastors threatening to burn Qurans, protests over the site of an Islamic Center near Ground Zero and the potential for backlash against our troops overseas. There is plenty of rhetoric but little dialogue.
Notre Dame has lent, and must continue to lend, its voice to this discussion. We have not just an opportunity, but a duty to think and speak and act in ways that will guide, inspire, and heal.
Building on our tradition, Notre Dame will provide an alternative for the 21st century – a place of higher learning that plays host to world-changing teaching and research, but where technical knowledge does not outrun moral wisdom, where the goal of education is to help students live a good human life, where our restless quest to understand the world not only lives in harmony with faith but is bolstered by it.
In this effort, our most valuable assets are the talent, creativity, and dedication of you – our faculty – and all those who work at Notre Dame. In the end, those are the resources that have made Notre Dame the great University it is. They are the riches on which we will rely most in coming years. You and all who work at Notre Dame are the treasure that will sustain us – maybe not on a journey of 2,300 hot miles on a bicycle — but in the work of building a truly great and distinctive university. I look forward to working with you in the coming year.
Rev. John I. Jenkins, C.S.C.