Text of President Brodhead's Email to the Duke Community
Thursday, October 23, 2008
Dear Members of the Duke Community,
The continuing news about the economy has made this a time of uncertainty and painful prospects for virtually every family in America. I want you to know how these developments are affecting Duke.
We enter this challenging period with a strong financial foundation. The university’s economic situation is stable and secure thanks to a long period of positive investment returns, record support from alumni and friends, continued growth in research support, and prudent and creative management of our resources.
Duke’s endowment has been one of the most successful among all U.S. universities. For the fiscal year ending June 30, 2008, the endowment recorded a 6.2 percent increase in market value – this at a time when many comparable funds actually declined in value. Indeed, though the past few months’ results have not been positive, over the past ten years the Duke University endowment has grown at an average annual rate of 15.6 percent, which places it among the top performers of all university endowments.
In real terms, that growth has created significant new resources for strategic investments in financial aid, faculty, programs, and facilities, all of which have fueled Duke’s continued momentum.
The performance of the endowment is due in large part to smart and prudent stewardship by DUMAC, the university’s investment office, which has put together a diversified portfolio that limits our exposure to wild gyrations in the market. In addition, the university’s policy of spending a fixed percentage of the value of the endowment, averaged out over several years, ensures that noticeable drops (or increases) in the value of the endowment will not lead to dramatic, year-to-year changes in the amount of money available for operations and investments in strategic priorities.
First among these priorities is ensuring that a Duke education is affordable for all students, regardless of their ability to pay. Duke’s longstanding commitment to need-blind admissions, and to meeting the full demonstrated financial need of all students admitted and enrolled, remains unchanged. Indeed, it is in times of financial stress that this promise is most important. The imminent completion of the $300 million Financial Aid Initiative is tangible proof of our dedication to this promise. Likewise, we will continue to work closely with our current and future students to address sudden changes in their financial circumstances that might threaten their ability to be at Duke.
Duke has always been a place of outrageous ambitions, and we must sustain our forward movement, even in what we hope will be a temporary dislocation in the global economy. Given the uncertainty of this time, we will continue to carefully monitor the flow of revenues and expenses and make needed adjustments, and we will move cautiously on long-term facilities commitments. At the same time, by using the university’s resources wisely, we will be able to make continued progress toward our most crucial goals. Our recently completed strategic plan will help us identify the highest priority areas for building and maintaining the university’s excellence.
At times like this, it can be useful to have a sense of history. Duke University was born on the eve of the Great Depression and began its rise in the midst of this country’s deepest economic crisis. Through recessions, wars, and other times of challenge, Duke has continued its mission of teaching, learning, research, and service. And by making wise choices in both good times and hard times, this university has reached a position of national and global leadership beyond what its founders could ever have imagined.
The strength of the Duke community will help us meet these current challenges and continue to advance Duke toward its highest goals.
Sincerely,
Richard H. Brodhead
President
