Nothing is immune to the economic crisis, not even the palm tree'd oasis in Coral Gables known as the University of Miami. After many alumnus expressed their concern, president Donna Shalala sent out a letter to all alum today addressing the impact on UM.
Here's the highlights:
- UM has made a lot of aggressive investments in the past few years. They're confidant they'll play out in the long run, but in the meantime are slowing growth and narrowing focus. That means the previously reported hiring freeze, salary freeze, and delaying almost all current construction plans.
- Tuition? It's still being increased by 3.89 percent, which is actually a small increase for UM, though Shalala hopes the stimulus bill will increase the College Work Study program.
- The endowment is down by over 25%, but that only translates to a $3 to $4million dollar cut to next years budget.
- Alumni giving is slightly up actually from last year, but *hint* *hint* give more.
Dear
University of Miami Alumni:
The
economic crisis impacting our nation and the world has implications for
all of us--including the University of Miami. I appreciate that many
of our alumni have taken the time to express their concerns, and I am
grateful for your suggestions.
I want
to assure you that our top priority continues to be ensuring that all of
our students succeed academically and that we maintain the high quality
of our core teaching, research, and clinical care programs.
The
following Q&A addresses the most common questions I have received
about how the economic downturn is affecting the University. You'll
see that your University is being proactive in how it responds to the
crisis.
Overall,
how is the University addressing the crisis?
In recent years, the University has been in a strong investment mode, and
while our strategic investments will more than pay off in the long run,
for now we are slowing our growth and narrowing our focus. Declines in
the stock market, coupled with a drop in philanthropy, have negatively
impacted our cash position at a time when there is limited access to
credit. So we need to take some time to strengthen our balance
sheet--hold onto our cash and minimize additional debt--while
ensuring that costs and revenue are in line with our current operating
environment. The steps we are taking include:
- Instituting a hiring freeze and
reducing expenditures for travel, supplies, and other miscellaneous
expenses; only positions meeting crucial University needs are being
filled;
- Freezing employee salaries for the
next academic year;
- Delaying almost all construction
projects except for those that are well under way, including the
Robert and Judi Prokop Newman Alumni Center.
How
are you reaching out to current students and their families who might be
affected by the crisis?
We have been working with students who need help to complete their
studies at the University and graduate on time, and will continue to do
so. Students and families with financial concerns have been told to contact
our Office of Financial Assistance Services and utilize the resources of
our counseling center staff and University ombudspersons. In addition,
students and alumni can use career counseling services available at the
Toppel Career Center as well as other college- and school-based
resources.
Will
tuition be increased?
Undergraduate tuition for the academic year 2009-2010 will increase 3.89
percent, which represents the smallest increase in 15 years. In addition,
the College Work Study program may be increased as a result of the
recently passed federal stimulus legislation.
How
is the downturn impacting the University's endowment, fundraising,
and sponsored research?
Like most major universities, our endowment has lost more than a quarter
of its value due to market declines and spending distributions.
Fortunately, endowment income represents less than 2 percent of our
operating budget--far less than many of our peer institutions. As a
result, the impact to next year's budget will be a relatively
modest $3 to $4 million.
In
times of crisis, history has shown that communities rally together to
provide assistance and support. We have experienced the same. At
mid-year, Alumni Annual Fund giving in dollars is slightly up from last
year, with a 38 percent increase in the number of Web-based gifts through
the alumni giving site www.miami.edu/alumni/giving. Parent giving has
increased significantly as well. In these difficult times, we are
thankful that our alumni and parents are continuing to support the
University and its students. So far this year, overall University
fundraising has declined by 6 percent. In this economy raising dollars to
support critical needs is a challenge, thus giving from alumni, parents,
and friends of the University is needed more than ever. Our history of
fundraising success reinforces our belief that in the long term the
University will continue to enjoy broad philanthropic support.
Sponsored
research at the University faces major challenges from federal, state,
and private funding sources. For example, the National Institutes of
Health has funded the current year at 90 percent of the awarded amount
due to the absence of a new federal budget, and state budget problems
have caused cuts in existing research grants from the Florida Department
of Health. On the other hand, we are preparing to take advantage of $10
billion in new National Institutes of Health funds earmarked for higher
education and infrastructure in the federal stimulus bill. Additional
funds also are available from the National Science Foundation.
What's
the outlook for the University's future?
We are fortunate--education and health care are generally good
businesses to be in during difficult economic times. No one knows
precisely how the economic crisis will play out, so we are building plans
that are conservative and that have the flexibility needed to respond to
a rapidly changing environment.
Over
the last 83 years, the University has made great strides in becoming a
world-class teaching and research institution--while repeatedly
weathering adversity--and in the past seven years it has risen
dramatically in the national rankings. We will not lose the momentum we
have built or step back from the significant gains we have made, but we
must use all our creativity and discipline to meet today's
challenges. .
As
University alumni, you are an integral part of the UM family, and I look
forward to hearing more of your suggestions, questions, and concerns. You
can e-mail me at [email protected].
As always, I extend my deepest thanks for your support and trust in our
University.
Sincerely,
Donna
E. Shalala
