Robert J. Zimmer and Andrew Alper responses to media inquiries about University finances
In response to questions last week about the University's financial planning process, the aims of that planning and the trajectory of the University, President Robert J. Zimmer and Andrew Alper, Chair of the Board of Trustees, provided the following statements to Crain's Chicago Business:
Statement by Robert J. Zimmer, President of the University of Chicago
August 15, 2013
Eminence in research, education, and impact drive and inform every major decision at the University of Chicago. In particular, all financial analysis, evaluation, and consideration of financial alternatives are driven by, and contextualized by, a singularly focused commitment to academic excellence in the special culture of rigorous inquiry that defines the University of Chicago.
As part of a rigorous planning process essential to strong governance, leaders at the University of Chicago prepare and provide regular projections for the Board of Trustees about the framework for financial choices facing the University in coming years. These projections provide a large amount of information, laying out the broad financial landscape in which their future decision-making will take place, including a wide range of contexts, options, and scenarios that reflect the uncertain potential economic environment of the coming years.
Trustees received the latest scenario projections in June, in the Financial Framework Update. The trustees’ review of the Financial Framework Update does not provide authorization for any individual expenditure or other transaction; any major element in the Framework Update that University leaders move forward is considered on its own merits by trustees before formal approval. Every such step will be driven by its contribution to academic eminence.
At the University of Chicago, faculty and deans play an essential role in setting the academic agenda. Every major initiative, whether it is the construction of a laboratory, the creation of a new institute, or a direct investment in our faculty or students, reflects academic needs or aspirations expressed by our faculty and deans. With the trustees and their approval, the University seeks to provide appropriate support — financial and otherwise — for those academic priorities, now and in the long-term. The University continually re-evaluates its academic priorities and reallocates its spending as appropriate to foster the exceptional culture of rigorous inquiry, analysis, and challenge that have defined the University of Chicago both in research and in education and that will continue to define it in the future.
In recent years that support has led to milestones, including a historic expansion of the faculty that has attracted outstanding scholars from around the world, and across disciplines; the opening of Joe and Rika Mansueto Library, the Center in Beijing, and the Reva and David Logan Center for the Arts; the creation of new approaches to fields of study in the Institute for Molecular Engineering and in the Neubauer Family Collegium for Culture and Society; and substantial increases in financial aid for undergraduates and financial support for graduate students. The University has built on its commitment to the South Side and the City, with efforts such as the Urban Education Institute. Applications to the College have more than tripled since 2006, investment returns on the endowment have averaged 9.6 percent per year over the last decade, and University fundraising continues to grow.
Before, during, and after the Great Recession, University trustees have supported continued investments in the University’s ambitious initiatives and priorities. We well understand that borrowing for some of these investments entails risk. Prudent financial risks are necessary. We cannot, however, scale back our academic and programmatic ambitions in a way that risks our future excellence as a University.
This process of investment, at once bold and painstaking, has set the University on a trajectory that will help ensure its success in world-class research, education, and engagement with the challenges facing our society for years to come. Even as they continue to make these investments in the core mission, University leaders and trustees work to ensure that the institution will be in a position to support that critical work for generations that follow.
Statement by Andrew M. Alper, Chair of the Board of Trustees, University of Chicago
August 15, 2013
The role of the Board is to provide support for the University’s academic mission and priorities for the benefit of our scholars, our students, and our community, today and into the future. Our shared goal is to maximize the University’s eminence, not its financial wealth.
The Board of Trustees has supported an ambitious set of investments to provide our faculty and students with programmatic opportunities and facilities that make their work possible. We can be both ambitious and prudent because the University’s scholars have clear goals and University leaders have provided and consistently executed plans to achieve those goals with the resources available and accessible.
The University administration provides trustees maximum transparency and information, which allows us to fulfill our governance role carefully and strategically, balancing opportunities and risks through a thorough and ongoing long-range planning process. This transparent, rigorous planning process was highlighted by Moody’s Investors Services again this year in determining the University’s credit rating and is noted as a clear counterbalance to our debt levels: “The Aa1 rating reflects the University of Chicago’s market position as a leading national research university, its management and governance with a demonstrated track record of successfully executing its strategic vision combined with heightened fiscal stewardship, and a strong fundraising profile.”
We believe in the mission of the University, the priorities of its scholars, and the trajectory it is on. This is an important period for the University. We have a strong leadership team in place and significant momentum. We are proud to be the world-class university Chicago deserves; our continuing, ambitious agenda is the best way to sustain and improve the University of Chicago.
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