The following is a letter sent Feb. 13 by President
William R. Brody to all members of the Johns
Hopkins University community.
Dear Faculty, Staff and Students:
I wrote you late last year about the state of the U.S.
economy and the potential impact of
deteriorating conditions on the university. The situation,
obviously, is still very difficult, nationally
and, in fact, internationally.
Businesses and banks have failed. GDP is down.
Unemployment is up. Many of us have relatives or
friends who have lost work. Given the performance of the
stock market, almost all of us are concerned
about our personal financial situations, at least in the
Johns Hopkins has provided, thus far, an important
counterbalance to the bad economic news.
We remain the major private employer in Maryland and a
significant economic force in the entire
Baltimore-Washington area. We attract considerable federal
research funding into the region, much
of which works its way — through your paychecks and
our vendors — into the local economy. With major
projects well under way in East Baltimore and at Homewood,
we help to insulate the area's
construction industry from the worst effects of
The recently completed Knowledge for the World
campaign has greatly strengthened the
university's ability to withstand these tough times. For
instance, we have not had to impose major
cutbacks in our construction and renovation program; many
large, important projects have been
completed, and many that have not are largely supported by
gifts to the campaign, not by the
Likewise, the addition to endowment of support for 92
faculty chairs and 550 scholarships and
fellowships has made us stronger in the face of financial
adversity. These new endowments will put us
in an even better position once the investment markets
But we cannot pretend that the economic storm has
bypassed the university. It most certainly
For instance, our investments, like everyone's, have
taken a significant hit. In the first six
months of the current fiscal year, through Dec. 31, Johns
Hopkins endowment investments lost about
20 percent of their market value. That is actually a pretty
good performance, under the
circumstances, certainly better than the benchmarks against
which we measure our endowment
performance. But such a loss does hurt. We now project that
the amount of operating cash generated
by the endowment will remain flat in fiscal year 2010 and
will decrease in 2011 and 2012.
Some of the other problems we face: This year's
Maryland state support for independent
higher education has been cut; the state's budget will be
very tight for at least the next two years.
Federal research funding, especially in the life sciences,
has been constrained for several years, as
have the facilities and administrative overhead
reimbursements that accompany that funding. Though
our alumni and friends are loyal, committed and very
generous — more than 250,000 of them
contributed to Knowledge for the World — the
immediate future of philanthropic support is uncertain.
Insurer reimbursements to the School of Medicine for
patient care also are under pressure.
And, universitywide, we must be even more sensitive than
ever to the possibility that the financial
circumstances of our students and their families will
change during the course of their time at Johns
We have not been idle in addressing these challenges.
Some divisions have postponed searches
for faculty positions. Some are leaving staff positions
unfilled. Some units have frozen or cut
operating budgets. Some have adopted new money-saving
energy conservation programs.
Recognizing, as we traditionally have done at Johns
Hopkins, that each unit's situation is unique,
the deans, directors and vice presidents have worked hard
to cut expenses within their own areas of
responsibility. This approach has served us well and has
helped us reach most of the budget targets
we need to reach in the current fiscal year, which lasts
until June 30.
Looking ahead to fiscal 2010 and the years that
follow, we will continue that approach to our
problems to the extent that we can. Our decentralized
governance is a great strength of our
But the problems are very large. We now project that
university revenues during fiscal 2010
and fiscal 2011 will be a total of more than $100 million
short of previous estimates. I believe it is now
clear — much clearer than even a few months ago
— that we will have to take some unified, across-the-
university measures in response to those challenges. The
deans and directors have been working with
central administration to chart this common approach. Our
priorities are to preserve the excellence of
Johns Hopkins in teaching, research and patient care and to
address, to the extent that resources
allow, changing financial circumstances of returning
students. We also hope very much to preserve, to
the extent that resources allow, our most important
resource: our employees, both faculty and staff.
We believe that the measures we have chosen to take will,
in fact, help us preserve jobs and keep
valuable employees on the payroll.
I have been working closely with President-elect Ron
Daniels on these issues. He has been an
integral participant in our deliberations, supports the
decisions we have made, and will be fully up to
speed when he takes office.
Effective July 1, all members of the executive
leadership — the president, the divisional deans
and directors, and vice presidents — will voluntarily
reduce their salaries by 5 percent. Savings will be
used to fund divisional priorities, including student aid.
Savings from central administration will be
added to undergraduate financial aid budgets.
We are instituting the following three measures in
university administration, the academic
divisions and other non-APL areas of the university.
(Because of its different business model, APL will
operate under different constraints.)
♦ Starting immediately, and effective through
June 30, 2010, we are freezing hiring for
both faculty and staff positions. We are also freezing
staff reclassifications. In both cases, rare and
essential exceptions can be approved by the appropriate
dean, director or vice president.
♦ There will be no salary increases, except
those that are contractually obligated, in the
fiscal year beginning July 1. Exceptions will be considered
by deans and directors only if necessary to
recruit or retain key talent, to reward faculty in the
tenure and promotion process, or to compensate
staff for assuming additional responsibilities as a result
of more effective conduct of our business, or
if the increase is directly related to new revenues such as
♦ Overtime is to be eliminated, except as
approved by a dean or director to fulfill a unit's
core mission. Similarly, there will be no use of temporary
agency employees or independent
contractors to cover unfilled positions, unless approved by
a dean or director.
There are no two ways about it: The years ahead are
likely to be difficult. But this university
has endured heavy weather before. It has a history of
facing challenges head-on, dealing with them
and emerging from troubled times ever stronger. I have no
doubt that will happen again in this
And while this is a time of serious challenges, it is
also a time of important opportunities,
opportunities that we should and will aggressively pursue.
The stimulus package now close to final
passage in Congress will include, for instance, significant
funding that can both advance research on
critical scientific and medical questions and support
much-needed job growth.
There are other opportunities we should seize as well,
including improvements to our business
practices that increase efficiency and eliminate
unnecessary expense. Many of you already are making
excellent suggestions for such improvements. Thank you, and
keep it up.
I am grateful to everyone at Johns Hopkins for your
loyalty and service to the university, in
good times and bad. We must be straightforward and direct
in addressing our problems, but we also
must never lose sight of our strengths. And at Johns
Hopkins, our greatest asset is you.