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A message from Provost Richard McCarty
10/13/2009
6:55 am
 Provost Richard McCarty Dear Colleagues, Over the past year, we have come together as a university community in response to the global economic downturn. Vanderbilt is fortunate to have entered this period of uncertainty in a relatively strong financial position. Our endowment has grown significantly in recent years, but like all university endowments, it has been impacted recently by the market's steep decline. Some of our peer institutions, both public and private, have made difficult decisions recently regarding layoffs and furloughs of faculty and staff, reductions in financial aid commitments, and cuts in academic programs. Thanks in large measure to the consistent efforts of our faculty and staff across the campus, Vanderbilt significantly reduced non-core academic and patient care expenses and as a result, we exceeded our budget surplus projections for the fiscal year ending June 30, 2009. However, we will need to maintain that same fiscal discipline over the next several years if we are to continue to preserve our financial health. We have a deep commitment to covering the full demonstrated financial need of our undergraduates and Development and Alumni Relations is working diligently to raise $100 million for endowed need-based financial aid to defray in part the costs of this program. Our faculty continue their success in securing external support for their research programs, but there are concerns about future growth in budgets for the National Institutes of Health, the National Science Foundation, the Department of Energy and other federal agencies after the expenditure of stimulus funding. These and other challenges demand that we think carefully about our priorities and any permanent additions to our operating budget. As we planned for the FY2010 budget, we made some difficult decisions. As a reminder, we are reducing our expenses and outflow of cash by adhering to the following principles: • Defer all discretionary capital projects until significant funding for a given project has been identified and until we have a clear plan for incorporating the operating costs of those new or renovated facilities into the base operating budget. • Evaluate spending and service levels in all administrative areas. Our goal is to achieve an appropriately high level of service for our faculty, staff, and students that is also cost-effective. We will continue to be extremely cautious in advertising for new faculty and staff positions or filling vacant positions. We will also identify areas where services can be provided more efficiently through greater consolidation across departmental and school lines. • Reduce the number of faculty searches over the next 3-5 years. We have experienced significant growth in the number of faculty positions over the past 5 years and we are already experiencing sharp decreases in faculty retirements and resignations. • Plan for increases in faculty and staff compensation over the next several years that are in line with the external economic situation and our long term plan to enhance the financial health of our university. • Steward gift accounts, endowment earnings, and other designated funds judiciously to preserve operating flexibility. • Develop within schools expense management guidelines for faculty and staff. These plans have been carefully designed by the deans to create expense savings at the school level while preserving the integrity of academic programs. In spite of these challenging economic times, several things are clear. Vanderbilt University continues to attract outstanding undergraduate, graduate and professional students to the campus. Our academic units are hiring wonderfully talented junior and senior faculty members who add to our impressive scholarly community. Financial support for the university from tuition, endowment payout, new gifts, and external grants remains healthy. Our “one university” philosophy allows us to leverage across the strengths of our 10 colleges and schools. Finally, despite the uncertain future, we are formulating exciting plans in the areas of residential education for undergraduates, enhancement of graduate education, and creation of unifying research themes in the Medical Center that will engage the entire campus. Thank you for contributing to a bright future at Vanderbilt. Best regards, Richard McCarty Provost and Vice Chancellor for Academic Affairs |
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