Wednesday, October 15, 2008

President Susan Hockfield's Fall "State of MIT address"

Per the significant interest in my post about the CitiAssist and MEFA student loan cancellations, I'm posting MIT President Susan Hockfield's letter that directly addresses how the financial crisis is impacting MIT's operations. The letter also covers a few other issues, such as MIT's role in advising both parties on a number of issues in the upcoming elections and a new fundraising campaign.

To the members of the MIT community:

As I write my customary autumn letter, the hopeful, bustling start of the new semester stands in sharp contrast to the ongoing turmoil in the world's financial markets. I am convinced, however, that the wisest thing we can do, individually and as a community, is to keep our focus on the extremely important work at hand. At MIT, our responsibility to build a better future by advancing knowledge and educating students to serve the nation and the world retains its enduring value.

Having said that, however, across the MIT community, market upheavals are understandably causing concern. Economic conditions have real impacts in the lives of our students, faculty, and staff. Although no one is in a position to predict the future, I want to start this letter by reassuring you that MIT enters this period from a position of strength, that our priority is to minimize the impact on the members of our community, and that we remain steadfast in our commitment to undergraduate financial aid.

We are closely monitoring the rapid changes in the financial environment. For now, we do not foresee making any dramatic changes to our budget plans for this year. Our budget is responsible and balanced, with a reasonable margin of safety. Given the uncertainties that lie ahead, however, it is simply prudent for all of us to look for opportunities to control spending wherever possible, with the goal of preserving flexibility we may need.

For faculty or staff with specific concerns, please don't hesitate to contact your dean or Human Resources. And for anyone interested in understanding more about the global financial crisis, I recommend the webcast of last week's campus forum with six senior MIT economists.

A position of strategic strength

We enter this unsettled period from a position of both academic and operational strength. At the State of the Institute Forum on September 29, the Provost, the Chancellor, and the Executive Vice President and Treasurer joined me in providing a snapshot of MIT as we embark on a new academic year. (Summary and webcast)

At the Forum, I outlined recent changes to MIT's financial framework that would be positive in any context, and that will be especially helpful in weathering economic uncertainty. Efforts over the last two years to rebalance the use of funds from the endowment and from the general institute budget have given departments, labs and centers an increase in funds in the last two budget cycles, have provided greater financial flexibility and, perhaps most importantly, have produced a balanced budget for the current year. We also recently adopted a new endowment spending policy designed to make endowment contributions to the budget more predictable. Fluctuations in the value of the endowment will still affect our operating budget, but the new spending policy will smooth out those variations and give us more time to prepare for any needed changes. The endowment last year returned 3.2% on investments, a good result in turbulent times.

These improvements to our financial framework permit us to plan more strategically and to harness all of our financial resources more effectively to support our mission. While such advances would be welcome in any financial environment, they are particularly timely and important now.

National political contests call on MIT's expertise

The upcoming political transition has also captured much attention this fall. Together with many members of the faculty, I have focused on making a powerful case for the importance of national investments in science and technology research and education.

We have reached out actively to provide both presidential campaigns with information on the critical role of education and research in fueling this nation's fundamental economic growth. I have also engaged with national organizations (the American Association of Universities, and the Council on Competitiveness) to communicate our agenda to the campaigns. Here on campus last week, MIT hosted an energy debate between the campaigns; in Washington, MIT faculty have served as witnesses for 23 Congressional hearings on energy issues. As a new Administration takes shape, we will continue this kind of aggressive outreach.
As we know well at MIT, in any scientific or technical field, innovative solutions that reach the marketplace represent the flowering of research seeds planted years or even decades before. In the last quarter century, America has reaped the rewards of two innovation revolutions, in information technology and biotechnology. These revolutions launched entirely new industries, created millions of jobs, vastly improved our overall productivity and produced virtually all the technologies that account for our modern quality of life.

Where did those revolutions spring from? From the seeds of basic, federally funded research. Today, America badly needs another innovation revolution -- perhaps more than one -- and funding basic research will once again pave the path to the goal. These arguments are obviously in the interests of MIT, but I believe they are absolutely central to restoring America's long-term prospects as well.

Increasing MIT's great strengths

To a large extent, my role outside MIT is to make the case for science- and engineering-focused education and basic research as the essential building blocks for innovation and economic growth. As I make that argument in different venues, I am struck over and over by how much the world counts on MIT for breakthrough research, for innovative solutions to daunting problems and for the balanced insights of an honest broker.

And given the kind of extraordinary work going on across all of our schools, at the Lincoln Laboratory and in our research labs and centers, it is easy for me to make that case. Even the shortest list of the latest discoveries and inventions, or of recent awards and honors to our faculty and students, would run to several pages.

Central to this mission of innovation and discovery is supporting our students and securing our commitment to them. With that aim, last week we formally launched the Campaign for Students. In its two-year nucleus phase, the Campaign has already raised more then half of its $500M target. It will increase support for undergraduate financial aid and graduate fellowships, for the undergraduate educational commons and for student life. In the Campaign's early phase, funding for graduate fellowships has enjoyed great success, which is particularly important in these times. The Campaign will conclude in 2011, as a birthday present for MIT's 150th anniversary.

The Campaign for Students stands as only one of many efforts to strengthen the Institute as a place to live, learn and work. The MIT community has engaged actively to increase the number of women and under-represented minorities among our students, faculty and staff. To amplify the many important projects and programs now in place and to accelerate our progress, the Diversity Leadership Congress on November 18 will bring together more than 300 of MIT's academic, administrative and student leaders to inform, inspire and support those most responsible for creating a culture of diversity and inclusion. At MIT, an aspiration for the highest level of excellence is woven deeply into our values and culture; that excellence depends on welcoming into our community people with a passion for MIT's mission from different backgrounds and with diverse points of view. The participants will bring the work of the Congress to the whole MIT community.

We recognize together that these times will challenge us on many fronts. Yet MIT has withstood serious tests before, always by continuing its important work during times of national and international turmoil. We should continue to be optimistic about the future, even while we are prudent about the present. Drawing on our extraordinary resources of talent, intellect, commitment and creativity, MIT will once again help chart a course that serves the country and the world.

I remain entirely confident that by the time we turn 150 in 2011 we will together have written an important new chapter in MIT's legacy of service.

Sincerely,
Susan Hockfield

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