The Outlook for 2009-10 at Tufts

September 15, 2009

Dear Friends,

The start of the academic year is always a time of hope and promise. To our newest students, welcome to Tufts! We hope your time here provides opportunities for great personal and intellectual growth. To our continuing students, I hope you have returned for another academic year renewed and invigorated. And to our faculty and staff, I hope your summer has been productive and that you each found time for a much deserved vacation. Summer was slow to arrive in New England this year, but August was truly beautiful.

As you all know, the last academic year was particularly challenging. The economic crisis affected everyone—individuals, families, and institutions. While it is still premature to declare the crisis over, I think we have a clearer view of where we stand than at any time in the past 12 months.

Despite the extremely difficult environment, Tufts ended the fiscal year in relatively good shape. When I last wrote you in March, we were anticipating a 30 percent decline in the endowment and a sharp decrease in annual fund giving. Fortunately, by the time the fiscal year ended in June, the endowment was down "only" 25 percent. While this is not good news by any stretch of the imagination, we had feared worse.

We also had some terrific news as the year came to an end: Thanks to the support of our alumni, parents, and friends, the annual fund was actually up by more than 6 percent. And last week, we announced that Trustee Emeritus Bernard M. Gordon made a wonderful commitment to invest $40 million over a number of years to Tufts School of Engineering. Dr. Gordon and all of the donors to our Beyond Boundaries campaign have shown remarkable leadership and generosity in supporting the university during a time of economic uncertainty. We are grateful to each of them for gifts that are more important than ever to our students and faculty.

As a result of our mid-year belt tightening, we ended the year with a balanced budget, and we also enter this fiscal year with the budget balanced. I want to thank everyone for their hard work in making this possible. Every member of the faculty and staff has sacrificed both by working harder—we have left many open positions unfilled—and by foregoing significant wage increases during these difficult times.

Our collective efforts have paid off in two very significant ways. First, we have largely insulated our students from the impact of our budget reductions. Where other schools have cut back on financial aid, the instructional budget, athletics, and other student services, we have not. And second, we have avoided the large-scale layoffs that have afflicted some of our sister institutions.

What about the future?

As I indicated previously, we were able to absorb the full impact of the endowment decline into our budget this year. Many of our peers have spread this pain over three years so they are anticipating two more years of budget cuts to bring their budgets into line with current endowment values. We are not.

Federal stimulus money is helping budgets, especially on our Boston health sciences campus. Congratulations to our faculty who submitted additional grant proposals to NIH and NSF and who have received funding.

We were able to restore nearly 50 percent of our state appropriation for the Cummings School of Veterinary Medicine in the legislature. While we are enormously grateful that the legislature and governor recognized the singular contributions of the Commonwealth's only vet school, the current appropriation still represents a $3 million decline in state support.

While I am cautiously optimistic that the worst of the economic crisis is behind us, our budget is likely to remain tight for some time to come. Thus it is premature to predict when we are likely to move forward with any major new capital projects. Fortunately, we were able to complete a number of important construction and renovation projects this summer on all three campuses. For a full description of them, please see http://president.tufts.edu/ConstructionUpdateFall2009.

I believe that one long-term consequence of the economic crisis will be even greater pressure on higher education nationally to control costs. Personally, I believe this is healthy and long overdue.

Unlike many industries where competition tends to put pressure on firms to control costs, in higher education the market often does exactly the opposite. Competition for students has led some institutions to invest in lavish athletic facilities, opulent dormitories, and concierge services in residence halls. It is my hope that Yankee frugality will reemerge as a virtue in higher education as a consequence of this economic crisis.

While we have continued to invest in our physical plant at Tufts, and still have more to do, we judge every single resource allocation decision by how it helps us to create a nutrient-rich environment that supports great students working with great faculty. We must resist the temptation to add glitz for glitz' sake.

Similarly, we must look hard at every expenditure to ask how it contributes to our educational and scholarly mission. Our challenge will be to find ways to curb the growth in the cost of a Tufts education without losing all that makes Tufts special—small classes, lots of student-faculty contact, and an intimacy that I think we all value. I believe we are up to this challenge.

One other subject is on my mind as we start the year—the threat posed by the H1N1 virus. Predictions from the Centers for Disease Control and Prevention are sobering: Perhaps 25 to 40 percent of the population may contract the virus during the upcoming flu season, and college-age students are particularly susceptible. Fortunately, most of those who have come down with H1N1 have been able to recover without medical treatment.

The university has been planning for a possible pandemic for the last few years. In order to keep our community healthy, we are facilitating access to the seasonal flu vaccine for students, faculty, and staff on all three campuses. We will do the same for the H1N1 vaccine when it is available. We have also created a limited number of places in the residence hall system where we can isolate resident undergraduates who are particularly sick.

We need everyone to work together to minimize the impact of this virus on our community. When people get sick, they need to stay home from work or school until they are free from symptoms. We don't need heroes dragging themselves into class or work only to infect others. Those who are healthy also need to help those who are not. Dining Services has made arrangements to deliver meals and fluids to sick students in the residence halls. I hope classmates will take notes for those who cannot make it to class. Faculty need to be especially understanding of students who need accommodations due to illness. I am convinced that if we work together as a community, we can get past this challenge as we have so many others.

As always, it is a privilege to lead an institution where people work together for the common good. Wishing each of you good health for the year ahead!

All the best,
Larry

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Lawrence S. Bacow
President
Tufts University