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Economy update

Posted Wednesday, January 28, 2009.

To Members of the Vanderbilt Community:

As Vanderbilt’s community of faculty, staff and students advances its work in the new year, I want to update you on how our institution is doing during this ongoing economic downturn and ask for your continued support of the decisions and actions that must be made and taken to steward Vanderbilt through the immediate and unpredictable challenges we face.

I have been inspired by your many expressions of support and your willingness to sacrifice to help Vanderbilt through this difficult period. I have always taken great pride in being a part of the Vanderbilt family, and I hold that feeling with even greater conviction during this time of economic challenge. I am humbled and honored to serve as your chancellor, and I assure you I strive to do what is best for this remarkable institution and its greatest asset – you, our faculty, staff and students.

Vanderbilt is not alone as a great institution and preeminent university in needing to act with prudence. Every one of our peers continues to take actions to weather these strong financial storms. While I am confident of our ability to continue to excel in our core mission and in our financial strength, it is time to be prudent and to prioritize.

In the last quarter of 2008, the world, financial markets, and the great American universities were almost overnight confronted with a series of unprecedented events. The locking up of credit markets, the freezing of the funds we and more than 300 other colleges and universities held in the Commonfund, and the gross distortion of interest rates of various kinds were all factors that demanded the very best of our community. There were trying times, but we managed with patience, skill, and compassion to meet all of these challenges.

We now find ourselves continuing our hard work, and I am so thankful and am buoyed by your dedication and the uniquely Vanderbilt sense of community and shared sacrifice. We are indeed even stronger financially and bonded collectively to continue our mission and serve Vanderbilt.

Despite the disruptive economic climate in which we find ourselves, there is much to celebrate here at Vanderbilt. Just last week, Vanderbilt’s 21,000 faculty and staff helped the institution land a coveted spot on FORTUNE magazine’s Top 100 best employers in the country, marking the first time a university has made the list. Our faculty continue to engage in cutting-edge research, bringing us national recognition; our students are thriving in the best undergraduate environment in the country; and a record number of more than 19,000 students has applied for admission for the next academic year.

Thanks to generous donors, we are already nearly half-way toward the fundraising goal for our ambitious financial aid initiative. Our medical center is performing strong financially even in this challenging period, and though we anticipate negative returns on and a marked decline in our endowment, the decline will be competitive relative to those previously announced by peer institutions.

We are a solid and enduring institution that rises to meet challenges in a collective and constructive way, and there is no doubt that as we move through this period of economic uncertainty, we will continue to be tested and challenged. As we forge our path, I want to outline the steps that have been taken or are being taken to ensure that Vanderbilt remains on solid footing:

  • Discretionary spending in travel, entertainment and other areas, including that of the senior executive team, has been reduced substantially and requires prior approval from the highest levels of management.
  • A general hiring freeze on staff has been implemented throughout the university and medical center. Exceptions are positions that are directly essential to teaching, patient care and research.
  • Searches for tenure-track and tenured faculty during the 2009-2010 academic year will be focused on extraordinary opportunities and on the support for our academic programs within the various schools.
  • Many departments and areas throughout the university have been asked to reduce expenses by approximately 5 percent for the remainder of this fiscal year and by an additional 3 to 5 percent for the following year.
  • Faculty and staff salary increases will be determined based on specific market information. Given the university’s overall strong competitive wage position, it is possible some salaries will be frozen for the 2009-2010 fiscal year.
  • All major construction projects that were not too far along to stop have been put on hold for the next two years. Modest capital projects and repairs that are necessary for safety and the maintenance of current facilities will continue.

While taking these budget actions, it is my hope and intention to avoid major lay-offs, and your dedication to our mission means that in certain areas critical to patient care, research and teaching, we are still hiring and will continue to hire.

We are working daily to address, and even stay ahead of, this financial crisis. Vanderbilt will endure, of that I am certain. As we move forward, I remain committed to honest and open communication with you, and I am deeply grateful for your commitment to Vanderbilt.

Sincerely,

Nicholas S. Zeppos

Chancellor