University of Rochester
Office of the President


JANUARY 13, 2009

As the new year begins, the University is effectively addressing the ongoing economic emergency and continuing to make progress toward its long term objectives.

There should be no doubt, however, that in the past few months we have experienced the most serious economic emergency that our country has faced in the post-World War II period. It already is clear that the economy will affect the University during this and the next academic year for several reasons:

  • Since the academic year began on July 1, 2008 through December 31, the Dow Jones Industrial Average had declined by approximately 21 percent; the investment value of the University of Rochester’s endowment is estimated to have declined by approximately 18 percent. These numbers, although not inspiring, are somewhat better than where we stood the last time I reported to the University community in late November, when the University endowment had declined by approximately 25 percent to that point in this academic year. A reduced endowment will decrease the resources that we have available to support our programs. The immediate impact of this reduction is cushioned by the fact that we calculate endowment payout on a 20-quarter rolling average. But the 20-quarter rolling average also will mean that the impact of the recent negative quarters will endure for some time into the future.
  • After three years of significant growth in philanthropy, including two consecutive record years, during the first six months of this academic year, we have seen a year to year 38 percent decline in cash received. Notably, however, annual giving is up 2.5 percent compared to last year. When both cash and pledges are taken into account, this year we are down by approximately 11 percent from last year. Despite the challenging economic environment, we have added over $40 million in pledges this year and our new business is 130 percent of year-to-date plan.
  • The College anticipates the need to find and distribute more financial aid for our students and to have smaller tuition increases than in recent past years.
  • The New York state budget, with a looming $15 billion deficit, poses particular challenges for the Medical Center, where it seems highly probable that there will be cuts in the growth of state Medicaid programs.

Each division of the University has been involved for some months in belt tightening:

  • All capital projects that have not yet begun are being reviewed. A number of capital projects have been placed on hold. While we have made progress on CTSB and PRISM, for example, these too are being held in abeyance until access to debt markets, full confirmation of state funds, and other predicates are achieved.
  • We are reviewing all vacancies in central administrative operations. Only critical positions are being filled during this period. No final decision has yet been made on the size of the central administration budget, although it is clear that it will be lower than the strategic plan proposal presented to the Board in October.
  • The Medical Center is anticipating potential deep cuts in reimbursement from New York State and the federal government in Medicaid and Medicare programs. In addition there is a need to address a structural budget deficit in the School of Medicine and Dentistry. While the full magnitude of these problems will not be clear for several months, administration, faculty, and staff are engaged in an effort to reduce expenses by approximately $30 million. This cost reduction effort will allow the Medical Center to preserve financial flexibility and to develop new programs as part of its strategic plan.
  • The College of Arts, Sciences and Engineering similarly has begun a process involving consultation with faculty and staff to close a projected budget gap for the 2010 academic year.
  • A program of discussion with University vendors was launched in November with the objective of seeking cost reductions in ongoing contracts. We anticipate that there will be material savings from these discussions.
  • We have convened an energy conservation group to address immediate actions that can be taken to reduce energy costs. We anticipate savings from changes in behavior such as turning off computers and lights when not in use. We also anticipate savings from changes in the cost of fuel purchased through forward purchase contracts that are anticipated to reduce expenses by at least $4 million below the current year’s expense for the same volume of use.
  • No decisions have been made yet by the University to date about a salary program for the next academic year. This is consistent with our decentralized approach to budget initiation. Many senior administrators throughout the University have volunteered to have no salary increase next year.
  • We have established a new electronic suggestion box ( and have received suggestions for energy and other savings ideas from faculty, staff, and students. We have already received close to 100 suggestions, several of which are being implemented.
  • The Executive Committee of the University Board of Trustees is receiving monthly briefings on the University and the economy. While our liquidity remains adequate, Doug Phillips, Senior Vice President for Institutional Resources, has begun circulating to the Board a monthly liquidity report which addresses how the University will fund endowment payout and other expenditures over the next 18 months.

These are serious steps. But we are not in crisis and our University will prove, as it has in the past, that it is resilient and can emerge from this economic challenge well positioned for significant further progress.

What matters today is that we not only take the necessary steps to weather a storm, but that we also keep our focus on our objectives.

Our work today at the University of Rochester and at other leading research universities in our country matters in terms of the creation and transmission of knowledge, new paradigms of thought, clinical care, artistic performance, economic development and championing a social climate that is inclusive and democratic. In the past few years, a series of government and private studies have highlighted how the type of scholarship conducted at our leading research universities is a substantial comparative advantage of the United States and is likely to be more contested by other nations in the years to come. For these types of reasons, I anticipate that there will be a reinvigorated effort to strengthen the ability of our leading research universities to conduct cutting edge research in areas such as science, technology, engineering and medicine. I anticipate that this effort will focus on basic, clinical, translational and applied research with respect to a number of our greatest 21st century social challenges, including climate change, energy, and cures for diseases such as cancer, heart disease, and Alzheimer’s.

Significantly, President-elect Obama has articulated priorities consistent with this view. During his campaign, he:

  • Recommended doubling federal funding over the next decade for basic scientific research through such programs as the National Institutes of Health (NIH) and National Science Foundation and also made clear his intent to permit the NIH to fund embryonic stem cell research.
  • Focused on energy, proposing significant investments in clean, renewable sources of energy such as biofuels and investments in climate-friendly energy supplies and efficiency.
  • Proposed that the United States lead the global effort to combat HIV/AIDS, tuberculosis and malaria.
  • Supported creating American Opportunity Tax Credits to help pay for $4,000 of college education in exchange for community service and increasing Pell Grants for our least economically advantaged students.

Since his election, President-elect Obama has selected a number of outstanding scientists to help lead his administration. These include the University of Rochester’s Steve Chu ’70 who was nominated to be Secretary of Energy, Harvard physicist John Holdren as Director of the Office of Science and Technology and former NIH Director Harold Varmus and MIT scientist Eric Lander as co-chairs of the President’s Council of Advisers on Science. It is inspiring that Steve Chu is the first nominee to a Cabinet position to have won a Nobel Prize. We also are delighted that Heather Higginbottom ’94 has been named Deputy Director of the Domestic Policy Council, and that Chris Lee ’87 was elected to the United States Congress representing New York State’s 26th Congressional district.

Indeed, as 2008 concluded, the University of Rochester had much to celebrate.

The individual achievements of our faculty continue to dazzle. For instance, Eastman School of Music Professor Paul O’Dette was nominated in December for a Grammy Award for Best Opera recording where he will compete against two Eastman graduates – Renée Fleming, MM ’83, and Anthony Dean Griffey, MM ’01.

Biology Professor Vera Gorbunova and her team have designed a gene that produces 1,000 times more protein in cancer cells than in healthy cells. The findings may help address the prime challenge in anti-cancer therapy: developing treatments that target cancer cells selectively and effectively.

Astronomer Alice Quillen predicted in 2006 that a planet of a particular size and orbit must lie within the dust of a nearby star. That planet recently was photographed by the Hubble Space Telescope, making it the first planet observed after an accurate prediction since Neptune was discovered 162 years ago.

This academic year I anticipate that we will create nine new professorships at the University:

On October 28, 2008, Dr. Francis Gigliotti was installed as the new Lindsey Chair for Pediatric Research.

During the spring semester we anticipate ceremonies for eight new professorships. These include three in the Simon School: The Michael and Diane Jones Professorship, the Edward and Agnes Ackley Professorship, and the Janice M. and Joseph T. Willett Professorship; two in the Medical Center: The Dr. Laurie Sands Distinguished Professorship of Families and Health and the Louis S. Wolk Distinguished Professorship in Medicine; and two in the College of Arts, Sciences and Engineering: the Arthur Miller Professorship in History and a Professorship in Optical Engineering established by John H. Bruning in honor of Brian Thompson.

Professor Allen Orr, Shirley Kearns Professor of Biology, earlier was named University Professor in honor of his outstanding contributions to both his own scholarly field and the University itself. In February 2009, Orr will receive the Darwin-Wallace Medal, awarded by the Linnean Society every 50 years to recognize seminal contributions to evolutionary biology.

Student achievements similarly were remarkable.

DMA student Michael Unger won two prestigious organ competitions this fall: first prize and audience prize in the American Guild of Organists National Competition in Minneapolis in June; and first prize and Toyota Mayor’s Award in the International Organ Competition Musashino-Tokyo in September.

In December, Eastman student chamber music group the Arabesque Winds won the 2009 Arthur W. Foote Prize from the Harvard Musical Association. In June the Arabesque Winds had won the Grand Prize in the 2008 International Chamber Music Ensemble Competition, presented by the Chamber Music Foundation of New England.

The women’s basketball team is now 11-0 and is ranked Number 1 in the country by, a national small college basketball Web site.

For the seventh consecutive year, the men’s and women’s soccer teams received the Team Academic Award from the National Soccer Coaches Association. The award is given for cumulative grade point average. Rochester is one of 65 schools out of roughly 800 schools to have its men’s and women’s teams honored in the same year.

The support of our Board of Trustees continues to inspire all of us. Our Board Chair Ed Hajim ’58 announced in October a $30 million gift commitment to the School of Engineering and Applied Sciences. This was all the more impressive, coming as it did, at the depths of an economic emergency.

The Board of Trustees took the lead in joining the George Eastman Circle, our University-wide annual fund leadership and recognition society. The George Eastman Circle completed its charter phase on December 31, 2008, with 1,063 Charter Members who have made five- year commitments totaling nearly $21 million. This is more than four times the original goal of 250 charter members.

In the College of Arts, Sciences and Engineering, undergraduate applications have grown; the College anticipates that we will have the largest applicant pool and most competitive freshman class in the University’s history. Early Decision applications were up by 25 percent.

The Faculty Council has approved three new majors in Epidemiology, Health Policy, and Bioethics and one revised major in Health and Society. These new public health majors result from a collaboration between the College of Arts, Sciences and Engineering and the Medical School and will be available pending final approval by New York State.

The College of Arts, Sciences and Engineering welcomed 15 new faculty members in 2008-2009, including Robert Clark, the new Dean of the School of Engineering and Applied Sciences, and Professor Thomas Slaughter, formerly the Andrew V. Tackes Professor of History at the University of Notre Dame.

Earlier this academic year, we announced that, beginning in fall 2009, qualified veterans may attend the College and the Eastman School of Music undergraduate programs as well as the School of Nursing RN completion programs tuition free. Their tuition will be funded through a combination of benefits under the revised GI Bill, federal and state aid for which they are eligible and the recently announced Rochester Pledge Scholarship.

The Medical Center continues to make substantial progress toward its two most significant facility projects. In October, 2008, the New York State Department of Health approved the Medical Center’s Certificate of Need for the PRISM project, which will allow Strong Memorial Hospital to add 83 urgently needed beds now, and up to 123 subsequently based on demand, expand Imaging Sciences, and modernize pediatric services in conjunction with the Golisano Children’s Hospital at Strong.

In October 2008, we held a ceremonial ground breaking for the Clinical and Translational Science Building (CTSB) attended by New York Assembly Speaker Sheldon Silver and Dennis Mullen, Upstate President of the Empire State Development Corporation, who represented the Governor. Later in 2008, the Empire State Development Corporation formally approved the process that will lead to funding $25 million of the earlier voted $50 million in New York State support for CTSB.

The Institute of Medicine announced its new members, including David Guzick, Dean of the University of Rochester School of Medicine and Dentistry and Director of the University’s Clinical and Translational Science Institute, and Ira Shoulson, the School of Medicine’s Louis C. Lasagna Professor of Experimental Therapeutics and professor of Neurology, Pharmacology and Medicine, who has pioneered research methods that have led to new treatments for Huntington’s disease, Parkinson’s disease and other neurodegenerative illnesses. Institute of Medicine membership is one of this nation’s highest honors in medicine and health.

The University of Rochester School of Medicine and Dentistry received an $11.5 million National Cancer Institute grant to support the expansion of lymphoma research and clinical trials at the James P. Wilmot Cancer Center. The Wilmot Cancer Center is the only upstate institution to earn coveted Specialized Programs of Research Excellence (SPORE) funding, which is awarded to institutions conducting collaborative, novel cancer research programs. There are only four other lymphoma SPORE grants in the country.

The Medical Center’s Eastman Dental Center was awarded a $3.9 million state grant to increase access and capacity for Rochester's underserved residents.

The School of Nursing began this new year by welcoming Kathy Parker as its fourth Dean and four other new faculty members. The School received a record number of applicants for this year’s accelerated baccalaureate class. The Robert Wood Johnson Foundation recently recognized the success of this program when in September it awarded the School $150,000 to fund the pursuit of nursing degrees by those with bachelor’s degrees in other fields.

The Eastman Theatre Renovation and Expansion project, which broke ground in July 2008, continues at a brisk pace. The new facility will be fully open in 2010 and will include a 230 seat recital hall, faculty artists studios, a central recording control room and a large new rehearsal hall.

In October, Eastman and the Rochester community celebrated the installation and dedication of the Craighead-Saunders Organ at Rochester’s Christ Church, the end of an eight-year research- and historically-informed construction project to replicate a beautiful 1776 instrument in Vilnius, Lithuania.

The Simon Graduate School of Business continues to meet its ambitious enrollment targets, with total enrollment this year near an all-time high for the School. Applications for next year are materially higher than last year. In the latest BusinessWeek rankings, the Simon Graduate School of Business ranked 9th as most improved, 10th best for accounting and 14th for innovative curriculum. The Simon School also was rated by BusinessWeek as the first private business school and the fourth United States school in terms of return on investment provided for its students. In December, Dean Mark Zupan was reappointed in recognition of his creativity, enthusiasm, and leadership skills that have substantially strengthened the Simon School.

In 2008, the Warner School celebrated the 50th anniversary of the creation of a school of education at the University. Alumni, friends and supporters of the Warner School, faculty, staff and students convened for a formal celebratory event that took place Friday, November 7. A few days earlier, the University Board of Trustees Facilities Committee approved the planning and design phase that potentially will lead to a new facility for the Warner School.

On September 22, the Memorial Art Gallery announced a gift of $1 million from Helen H. Berkeley to renovate the second-floor antiquities gallery and establish a fund for art conservation. The antiquities gallery will be renamed the Helen H. Berkeley Gallery of Ancient Art and showcase objects from Egypt, the Mediterranean, and the Near East. The Gallery also received professional reaccreditation from the American Association of Museums in January 2008. Fewer than 20 percent of American museums have received such accreditation.

The total number of underrepresented minority faculty (defined as African-American, Latino, Native American and Pacific Islander) grew by 27 percent from 41 on September 30, 2007 to 52 on September 30, 2008. During that same period, the total number of women faculty grew by 13 percent from a total of 439 to 496.

In the 12-month period ending September 2008, we also hired 26 additional underrepresented minority professional staff.

The University’s growth has continued to support job creation and economic development in the greater Rochester community by adding 770 new faculty and staff Full Time Equivalent jobs to increase our total from 18,671 in December 2007 to 19,441 this past December. As the economic emergency began to affect the University late in 2008, however, hiring has significantly slowed.

The University’s Center for Electronic Imaging Systems announced a record breaking $134.5 million economic impact in New York State for the 2007-2008 fiscal year.

In October, the University of Rochester was named one of the best places in the nation for scientists to work, according to The Scientist magazine. The University was rated among the top 10 non-profit institutions in the nation in the magazine’s annual ranking of Best Places to Work for scientists in the life sciences, which includes medical research and related areas such as biology.

A few days ago, Kiplinger’s Personal Finance Magazine also recognized the University of Rochester on its 2009 “Best Values in Private Colleges” list for delivering “an affordable, high quality education.”

In my view, the most important event of this academic year occurred in October 2008, when the Board of Trustees unanimously approved the strategic plans of the Medical Center; the College of Arts, Sciences and Engineering; the Eastman School of Music; the Simon School of Business and the Warner School of Education; and also approved the University’s Campus Master Plan.

Our objective is clear. By 2016-2017, we aspire to be one of the 20 most outstanding research universities in the United States; with a material growth in our tenured and tenure track faculty, particularly in the College of Arts, Sciences and Engineering; a student body which has grown from approximately 8,300 students to approximately 10,000 students; and a long-term investment pool, including endowment, that has grown to approximately $3 billion. Within the Rochester community, we will be the leading employer and an engine of economic development. Our campus by 2016-2017 will be amplified by College Town developments both in Brooks Landing and along Mount Hope Avenue between Elmwood and Crittenden. Our Medical Center will have completed a substantial expansion of clinical care and research facilities, beginning with the PRISM and CTSB projects.

Let me rearticulate that these goals are consistent with what I believe may prove to be a particularly significant period for research universities.

There were two great transformations in the history of the University of Rochester during the 20th century. The first involved the impact of George Eastman and his work with Rush Rhees to transform a relatively small college in 1900 into a national university by the time of Eastman’s death in 1932. Much has and should be made of Eastman’s extraordinary munificence.

The second transformation has received less attention. This transformation concerned the impact of sponsored research on our science, engineering and medical programs. In 1938-1939, for example, the University received a total of $78,000 from outside support. By 1953-1954, total outside research support had grown 11 fold to $827,000.

During the next 55 years, in contrast, total research funding at the University grew over 470 times so that by the 2008 academic year University of Rochester research funding equaled $389 million. Taking inflation into account, in real dollar terms, this represents a 61 fold growth. By either measure, sponsored research is the fastest growing dynamic in our University and in research universities generally during the past 70 years.

Underlying this growth has been a powerful partnership largely involving research universities and the federal government. This partnership was significantly advanced by the World War II Manhattan Project and by the creation of the National Institutes of Health and National Science Foundation.

At the forefront of our national effort to address our greatest research challenges has been a comparatively small number of research universities. In 2005, for example, there were 4,391 universities and colleges in our nation. In 2007 our University was ranked 27th in terms of federal support for science, including medicine, and engineering research and development.

There are enormous advantages to being among this select group. Our University has been able to attract and retain some of the leading academics in the world today and to build best in class or outstanding programs in pivotal areas of research including optics, physics, bioengineering, neuromedicine, vaccinology, clinical and translational research, orthopedics, dentistry, and our Laboratory for Laser Energetics. This has not only benefitted faculty and the greater Rochester community, but has been a particular advantage to our students, who often attend our University because of the caliber of the faculty in specific areas of interest to them.

None of this has been by accident. Throughout much of the 20th century, the University has focused on building outstanding programs that strengthen our research base. We can be justly proud, for example, to have been the first University to create an Institute of Optics in 1929 or of the championing by President Sproull during the 1970s of the Laser Lab. Tom Jackson’s presidency saw the addition of 380,000 square feet of new research space to the Medical Center to create the Kornberg Medical Research Building and the MRBX facility. During my three and one half years here, we have completed the new Robert B. Goergen Hall for Biomedical Engineering and Optics, the Aab Cardiovascular Research Institute, and the James P. Wilmot Cancer Center and have begun planning the new Clinical and Translational Sciences Building.

While there are enormous advantages to our strength as a research university, there is also an enormous challenge involving the balance with the rest of the University. Federal and foundation support has been extraordinary for medicine, the life sciences, engineering and cognate areas in the post-World War II period. In contrast, support for the humanities, social sciences, performing arts and professional programs such as business and education has been less generous.

Our aspiration to be a great research university requires strength in all parts of our University. We take enormous pride in the hallowed place of the Eastman School of Music, the signature achievements of the Simon School and the Warner School, and the extraordinary faculty who have taught throughout all domains in our University. The College of Arts, Sciences and Engineering’s undergraduate programs are based on a liberal arts ideal with the aspiration of exposing our students to the humanities, social sciences, and life sciences regardless of their major. The College encourages intellectual curiosity through the Rochester Curriculum, which gives students the freedom and responsibility to design their course of study within the flexibility of the College’s distinctive cluster system. The College of Arts, Sciences and Engineering has become a home of the double and triple major. We celebrate our commitment to the liberal arts ideal through our Take Five program, which provides selected students the opportunity to take a fifth year of study without cost, typically in an area outside of their majors. At the University of Rochester we stress “the whole student” experience, including athletics, leadership, and performing arts as well as academic programs.

Pivotal to the development of our strategic plans and recent experience here has been a focus on how to enhance the balance among our academic, clinical and performing arts programs and the student experience here. In the recent past, we have initiated new humanities and multidiciplinary funds focusing on faculty research and opened a new University Health Service and the Riverview Apartments to enhance the student experience. As our strategic plans are implemented, we will add faculty to the College of Arts, Sciences and Engineering to continue its amplification of its programs, potentially address new facilities for athletics and performing arts, and add new facilities to Eastman and Warner. Our commitment to the community remains unwavering. We have made substantial progress in Brooks Landing and look forward to developing the Mount Hope corridor.

In sum, there should be no question that the current economic crisis is unprecedented in the post World War II period and will slow implementation of aspects of our strategic plans. But the larger point is this. We remain on track. Our aspirations have not changed. We will continue to progress.

Last modified: Wednesday, 18-Mar-2009 17:08:17 EDT