November 21, 2008 Dear Members of the University of Delaware Community: Strong leadership and communication are critical to our continued success at the University of Delaware, and never more so than during uncertain economic times. As the turbulent global markets continue to challenge us all, I want to reiterate the importance of maintaining the fiscal health and integrity of our University as we continue on our Path to Prominence. The University's Financial Challenges Mirror Those of the Nation and the World As I stated in my letter to you last month, it is important to underscore that the current world-wide economic stress affects the University community in many ways, but none more important than these:
The concerns of students and their families about the continued affordability of a Delaware education, the ability of the State of Delaware to maintain and grow its investment in the University, and the ability of our valued donor alumni and friends, represented by our invested endowment and all of the programs and services that it supports, to sustain their support of our university. Even as we recognize that our path forward has uncertainties, we are resolute in our commitment to put the success of our students first. Our Commitment to Delawareans is rock solid today, and so it will be tomorrow as well.
While we see challenges ahead, we also see opportunity. In the Midst of Challenge The national and state economic forecasts are consistent and the news is not good. State budget shortfalls may result in a 15 percent reduction in our state funding for fiscal year 2010. We will not know the final decision on this until later in the fiscal year. In addition, the University endowment fund's net return decreased 21 percent as of the end of October a decline consistent with benchmark results reported so far by similar endowments. The S&P 500 index dropped 24 percent over the same period of time. Our challenge is clear. We must work together now to reduce non-essential expenditures, build reserves, increase efficiencies and innovate and continue to ensure that the first and foremost priority remains the success of our students. It is also critical that we make measurable progress in the fulfillment of our strategic plan for the University, our Path to Prominence. Especially during this period of declining revenues, it is essential that we clearly concentrate our attention and efforts on our strategic vision, putting a laser-like focus on our highest priorities, and ensuring that our activities directly support our mission and guiding principles. We must be strategic about how we spend our limited resources and we must build reserves to protect our core teaching, research and service programs. Today's economic situation requires us to make hard decisions. However, if we make these decisions wisely, with discipline, analyses and an eye toward the future, UD will be more efficient and effective in fulfilling our collective vision. It is essential that for this year and next we are especially thoughtful in the positions we fill and the obligations that we accept. In the coming days, we will issue detailed guidelines for spending reductions so that we can maintain a balanced budget while continuing to carry out our mission. We can and must take action now to prepare for a period of financial constraint, but we must also remain nimble to seize emerging strategic opportunities. There is Opportunity As we plan for the next academic year and beyond, we will continue to encourage creativity, innovation and excellence in everything we do. Our most valuable assets at the University are our faculty - the heart and soul of the excellence in teaching and scholarship at UD. As we make the difficult judgments about allocation of our resources, we will place a premium on protecting and improving the most important components of the University's academic core. But that is not enough. Though we face a difficult financial challenge, we should recognize that the current economic environment may create an opportunity for UD to successfully recruit additional high-quality faculty in some of our most important academic disciplines. Again, the thoughtful and strategic application of our resources to take advantage of potential opportunities will be paramount. We have already witnessed some progress on improving administrative and financial efficiencies. Those efforts must be intensified and additional progress must be made quickly. Further, we must continuously redesign and execute operating strategies to improve the quality of services to our students, faculty and alumni communities. We must develop new approaches for generating cost savings and new revenue sources, building upon the ideas and best practices of our faculty and staff. This period of fiscal uncertainty had a beginning and it will have an end. As our plans and economic situation evolve, I will keep the UD Community involved and up to date. Working together, I am confident that our prudent actions now will allow UD to overcome these challenges, and become an even stronger and better positioned institution to move forward on the path to prominence. Sincerely, Patrick Harker
President |