Chancellor Holden Thorp’s Annual AddressOctober 2011
Thanks to everyone for helping make Carolina one of the world’s great research universities.
After celebrating University Day, now is a good time to look back at the past year to celebrate some successes and to consider future challenges. Carolina is a remarkable place because of what students, faculty and staff have accomplished together. None of those achievements would be possible without the consistently loyal and generous support from North Carolina taxpayers and legislators, along with our alumni and friends.
This past year has been full of some exhilarating highs and, frankly, some disappointing lows. The University’s budget is the #1 issue facing us. Ultimately, we’re going to come out of the economic downturn in good shape because we’ve planned prudently and managed our resources wisely. But it’s going to take some more time and require more patience.
Great things are happening at Carolina.
The Class of 2015 that just arrived includes 4,025 wonderful first-year students from nearly 24,000 applications – a fifth consecutive record.
For the third year in a row and the seventh time in University history, we produced two Rhodes Scholars – Steven Paul Shorkey Jr. and Laurence Deschamps-Laporte.
Times Higher Education magazine in London just ranked us 43rd among the world’s top 400 universities and 28th for all U.S. campuses.
Faculty brought in $788 million in research contracts and grants for research that improves – and saves – people’s lives.
A great example is David Margolis from the medical school, who leads a national team, awarded a $32 million grant to develop a cure for people with HIV by purging the virus hiding in the immune systems of patients taking antiretroviral therapy. He is part of a large, diverse group of investigators on campus who are working tirelessly to find better ways to help people who have this terrible disease.
Then there is Kevin Guskiewicz from exercise and sports science, one of America’s go-to experts on sports concussions. He was selected for a MacArthur Fellowship – better known as the “genius award” – from the John and Catherine T. MacArthur Foundation.
Since research is a way of learning here, the faculty’s success directly benefits undergraduates; more than 60 percent of our graduating seniors conducted original research for coursework last year.
Jacquelyn Dowd Hall, a pioneering scholar in Southern women’s history, was just inducted as a fellow in the American Academy of Arts and Sciences. She is a great example of excellence from the social sciences.
Our Build a Block project, which brought together students, faculty and staff, was selected as campus chapter of the year by Habitat for Humanity International.
We produced the third highest number of volunteers for the Peace Corps among large U.S. universities and moved up to 4th on a similar list by Teach for America of top schools contributing the greatest number of graduating seniors.
Generous donors provided $277 million in gifts, our second highest total, in fiscal 2011 for a 3 percent increase over last year. New commitments – pledges plus gifts – totaled almost $306 million, a 5 percent increase. This is a remarkable statement of support for what all of you do here on campus every day by our alumni and friends.
Those are just a handful of powerful examples that show the University is achieving great things at a fast clip. There are similar examples in literally every part of the campus.
Initiatives for Our Future
We’ve taken strong steps with two initiatives that will position Carolina well when the economy rebounds.
Thanks to the leadership of Professors Bill Andrews and Sue Estroff, we have completed the Academic Plan, which will guide how we teach, invest our resources and strive to be more inclusive over the next decade. This was absolutely the right time for us to have re-examined the University’s academic goals. Together with the Carolina Counts initiative, the Academic Plan already has been helping us make wise budget decisions.
The Academic Plan is now posted on the provost’s website. I encourage you to take a look at the final version, which identifies six major themes to promote and advance:
- Work as an integrated university to attract, challenge and inspire students through transformative academic experiences.
- Faculty: prominence, composition, recruitment, development, retention and scholarship.
- Interdisciplinarity in teaching, research and public engagement.
- Equity and inclusion.
- Engaged scholars and scholarship.
- Extend our global presence, teaching, research and public service.
All of the recommendations tied to these priorities are important and interrelated. Particularly timely is equity and inclusion as we enter the final stages of the search for a vice provost for diversity and multicultural affairs. We have four strong candidates on campus this month for open forums. Provost Carney changed the title for this position to include vice provost to reflect the importance of diversity in his close circle of advisers. I commend that move. It’s very important that members of our campus community know that we’re about working together and celebrating our differences.
We’re also making progress with “Innovate@Carolina,” the roadmap launched a year ago to help us apply more of our important ideas to improve the world. To date, we’ve raised more than $30 million in private gifts toward a $125 million goal to implement the full roadmap. In the past year we’ve affirmed there are plenty of dynamic people here who are making their mark. Now we’re assessing how the University can best provide more support by making the way smoother, helping them find resources and telling their stories to let others know how to become involved. We’ve also learned there are many others who have ideas, but need some guidance in how to apply them outside academia.
One highlight has been the launch of the Blackstone Entrepreneurs Network to help the Research Triangle region emerge as a top entrepreneurial hub. The Blackstone Charitable Foundation’s $3.6 million gift is bringing the Triangle universities — UNC, Duke, NC State and NC Central — together with the Center for Entrepreneurial Development to help identify and mentor 150 start-up teams. Robert Creeden of Boston was just hired as the network’s first executive director, and he’s well positioned to get the initiative off to a fast start. We owe a great debt of gratitude to Ted Zoller, director of the Center for Entrepreneurial Studies at Kenan-Flagler Business School, for his research on dealmakers and entrepreneurial networks. The Blackstone Network draws upon his ideas.
We’re also putting our own mark on Chapel Hill with the 505 Incubator, which will provide space and support for UNC and local startups on West Franklin Street to build bridges with local business and entrepreneurial communities.
There is considerable positive energy around these ideas and early steps. We’re laying a solid foundation here for future innovation.
Budget = #1 Challenge
Our most important challenge is the University’s budget. Once again, I wish there were more positive things to say about where we are on this topic right now.
We’re managing the University’s budget as responsibly as we possibly can. That’s been happening because of outstanding work by Provost Bruce Carney, Vice Chancellor for Finance and Administration Dick Mann, and their colleagues. Dick is retiring in a few weeks after making enormous contributions to Carolina. He will be succeeded by Karol Gray, a highly skilled veteran of higher education finance, from Stony Brook University.
By necessity, the budget approved last summer by the General Assembly was austere. As a result, Carolina – like every campus in the UNC system – faced dramatic cuts. Our final permanent reduction in state appropriations this fiscal year was $100.7 million, or 17.9 percent. That reduction was offset by an additional $20 million transfer of funds from UNC Health Care to help the campus and the medical school deal with this year’s cuts and put off that same level of reduction until next year.
Since 2008, we’ve absorbed more than $231 million in total cuts.
We’ve had no choice but to eliminate positions.
Centers and institutes have taken 31 percent in cuts overall, and the University Library has sliced its acquisitions budget and canceled subscriptions and journals.
The budget pain is very real across campus. I recognize and appreciate that you have made significant personal sacrifices to study and work here.
Aside from the budget, the fact that we’ve had to make big changes on campus doesn’t lessen our resolve to provide a quality workplace environment for our employees. That includes Housekeeping Services and redoubling the efforts to implement the PRM consultants’ report. I’ve pledged my absolute commitment to making things right in Housekeeping Services.
We’ve Done Our Part
We’ve all done our part to help North Carolina cope with budget shortfalls.
We’ve met our responsibility to the taxpayers of North Carolina and the General Assembly.
Working closely with UNC President Tom Ross, we’ve taken a greater share of cuts this year to help soften the blow for our sister UNC campuses.
We’ve made deep cuts to administration. Our state funding reductions to Finance and Administration alone have totaled 32 percent over four years.
Even before the downturn, an anonymous donor made it possible for the University to conduct the Bain & Company study that resulted in Carolina Counts, our campus-wide initiative to make operations more efficient. Over the last three years, those efforts have enabled the administration and units to streamline procedures and reduce bureaucracy and layers of supervisory management. To date, we have completed more than 70 projects and identified nearly $50 million in savings from permanent state dollars. Without Carolina Counts, we’d be in far worse shape. Compared with other universities, we’re fortunate to have such a rigorous process to guide budget decisions.
Until now, our focus has been on protecting the classroom. But we can’t do that now because there is nowhere else to cut.
Danger Zone Ahead
Looking ahead, there are some red danger signs blinking brightly.
This academic year, we’ve lost 556 course sections, making 16,000 fewer classroom seats available to students. In the College of Arts and Sciences, where most undergraduate instruction happens, the number of classes with fewer than 20 students has decreased by more than 18 percent. Classes with 40 to 49 students have increased by 22 percent. Classes with more than 100 students have increased by 17 percent.
Even more sobering is what’s happening to our ability to support and retain faculty – the University’s most valuable asset. Until this year, we had successfully kept about two-thirds of the faculty involved in retention cases. That trend reversed last year. Over the past two years, 110 of the 201 faculty who have received external offers have left Carolina.
Last month, the University fell 12 spots among top private and public universities in faculty resources, as measured by U.S. News & World Report. That calculation is based on undergraduate class size, two years of average total faculty compensation, student-faculty ratio, and the percentage of full-time faculty who hold their terminal degree. Now we rank 59th overall in a tie with the University of Michigan. Last year, we were 47th, and two years ago we were 35th. We believe next year’s number, which will then reflect this year’s budget cuts, will be even worse. The word is out in higher education that UNC and some other flagship public campuses are vulnerable to faculty raids.
Carolina is a great university because we have world-class faculty who inspire our students.
If we’re increasing undergraduate class sizes while we’re losing our best faculty, we can’t remain Carolina.
The Case for New Revenue
A lot can happen with the economy between now and the next state budget cycle. We can all hope the economy will improve. But we can’t take chances with the quality we’ve spent over 200 years building.
So while students and families are a last funding resort for us, we have to engage in challenging discussions about tuition, and we have to work with the General Assembly to ensure that the revenue stays on campus and is not offset by additional cuts.
We also need to maintain our historic commitment to provide financial aid for our students. It’s admittedly a delicate path, but one I’m convinced we must explore vigorously to do what’s best for the University in both the short and long term.
Taking these steps will enhance our classroom experiences and expand our groundbreaking research programs. If we don’t, the University could suffer permanent damage to academic quality. We have to protect the value of a Carolina diploma and our influence in the nation and the world.
We have the people of North Carolina and the North Carolina General Assembly to thank for investing in and believing in our University for 218 years. Because of their sustained support, we’re a great research university that benefits the entire state of North Carolina. To remain so, we must keep the faculty strong. They prepare our students to become the next generation of leaders and to tackle the most pressing problems facing the world.
A Word About Football
We can’t talk about the past year and not acknowledge the NCAA investigation of our football program. I believe we have responded in the way you would expect of this University. We have accepted responsibility, and our focus now is on moving forward. We continue to look into the academic issues that were raised by the investigation, and we will do what it takes to correct any problems.
America and North Carolina have never needed higher education more – to help students attend and complete college, secure the jobs of the future, access health care, and keep our country safe.
The best way you can help Carolina and our state is to keep doing what you do best – educating the world’s leaders, creating the future and serving the people of North Carolina and beyond.
Because of our students, faculty and staff, Carolina will be more than OK.
We’ll still be great.