November 3, 2008
Office of News and Information
Johns Hopkins University
901 South Bond Street, Suite 540
Baltimore, Maryland 21231
Phone: 443-287-9960 | Fax: 443-287-9920
Johns Hopkins Community
President William R. Brody sent a broadcast e-mail message to Johns Hopkins University faculty, students and staff on Monday, Nov. 3, regarding the impact on the university of the national economic situation. Here is the text of that message.
Dear Faculty, Staff and Students:
All of us have followed with great concern in recent weeks the cascade of bad news from global markets and the economy.
I suspect that, for many of you, the apprehension you feel may be intensified by uncertainty about how all this has affected the university. For faculty and staff, in particular, Johns Hopkins is, after all, your employer and the source of much if not all of your family's income.
The good news is that — at least in the near term — the university's financial position is strong. We beat our bottom-line budget goals for the fiscal year that ended June 30. Only a very tiny fraction of the university's investments were with institutions that have failed or been taken over in recent well-publicized government actions.
Likewise, we have good access to the cash that is needed to pay our bills and meet our expenses. We have, for instance, no money invested in several short-term funds for colleges and universities that recently have been frozen by their managers. We have enough easily liquidated investments to fund our planned endowment payout and to meet other anticipated demands for cash.
That said, there are significant threats on the financial horizon, threats for which we must prepare in a careful, measured and prudent way. Among them:
The markets. If stock markets remain bearish for an extended period of time, the decline in value of the university's endowment will reduce the operating income the endowment generates.
State support. Maryland is traditionally generous in its support for independent higher education, but this year's appropriation has been cut twice already, by about 18 percent in all. Even with these and many other cuts, including others that affect Johns Hopkins, the state still has some distance to go before its 2009 and 2010 budgets are in balance. More cuts affecting the university are possible.
Research funding. I have no doubt that our faculty will remain more than competitive in winning grants. If overall federal budgets for research remain constricted, however, we will win more than our share, yes, but a share of what will be, in inflation-adjusted terms, a shrinking pie.
Philanthropy. No one can predict how economic conditions will affect private giving to the university. Our alumni and friends have been extraordinarily generous to Johns Hopkins. Their continuing support remains critical to our success.
The outlook is sobering. I have asked the deans and directors and the officers of the university to take a hard look at their budgets for fiscal 2009 and succeeding years. I have asked them to think seriously about what adjustments might be necessary.
We will act carefully. We will act responsibly. We will not act precipitously. But the hard truth is that we will have to act. We will have to make difficult choices. We are confident, however, that we can make those choices in ways that adhere to our mission and strengthen our great university.
This period of uncertainty arises at what is also a time of transition. I will be stepping down as president at the end of the year. The board of trustees and its Presidential Search Committee have been working diligently to identify my successor. In the meantime, it is important for you to know that I have complete confidence in the senior leadership of this university. Working with me and then with whoever succeeds me, I know that Provost Johnson, Senior Vice President McGill, the deans and directors and the vice presidents will come to the right conclusions and steer The Johns Hopkins University skillfully through whatever waters lie ahead.
We will keep you informed, of course. Thank you, as always, for your support of and dedication to Johns Hopkins.
William R. Brody