Bienen offers realism, optimism about economy in final State of the University speech

    Bienen addresses the audience in the Forum at the McCormick Tribune Center. Photo by the author.

    In his final State of the University address before he steps down from office at the end of the year, President Henry Bienen offered a frank assessment of Northwestern’s financial constraints but didn’t dwell on the weak economy. The address, which began at 9 a.m. Wednesday, took place at the McCormick Tribune Center Forum and had its own live webcast. Bienen was joined on stage, for the first time in such an address, by a panel of six administration officials.

    “The economy obviously continues to be on all of our minds,” Bienen said. He reiterated the steps (outlined in a letter to the university from Feb. 25) that the administration has taken to manage the economic downturn. The steps include a “three percent cut in operating expenses across the University,” a tuition increase of 3.6 percent and an expansion of the financial aid budget by 10 percent.

    But Bienen emphasized that, in tough economic times that offer “no place to hide” for any university, Northwestern is in “relatively good shape” for the coming years. The university raised $270 million in new financial commitments during fiscal year 2008, and there are no plans to make university-wide cuts in personnel, he said. He promised to “limit the amount of funds that we draw from the endowment, preserving our endowment as much as possible in a very difficult time.”

    In fact, Northwestern’s history of using its endowment to cover only a small share of its operating costs has allowed it to make fewer budgetary changes than universities who depend more heavily on their endowments, Bienen said. He praised the university’s tradition of “prudent fiscal management.”

    But Bienen warned that care, prudence and luck would only go so far. “If the economy remains in the doldrums and the markets continue to fall, the cushion that we’ve tried to create for next fiscal year will disappear,” he said.

    Moving away from the economy, Bienen announced that, in two days, he would visit Doha to “participate in a ceremony, sponsored by the Qatar Foundation, celebrating the opening of Northwestern University in Qatar.” Applications are up by 50 percent for the second class of Northwestern in Qatar.

    Although the Evanston campus didn’t see that kind of rise in applications, Bienen did report a new record for undergraduate applications, with 25,395 in total. He added that the university “also took several steps in an effort to increase the enrollment of minority students in the incoming freshman class; the results so far are very encouraging — a 53 percent increase in applications from Latino students and a 26 percent increase in applications from African-American students.”

    Acceptance letters go out next week, he said.

    The economy came up again when Bienen addressed plans for construction and renovation.

    “The economic downturn has had a significant impact on our capital program going forward,” he said. “We’ve deferred $90 million of projects including renovations of the Admissions office in Evanston and animal care facilities in Chicago.”

    The 50-year plan to overhaul the campus has also been revised and reworked to reflect the new economic conditions, he said.

    As he has traditionally done, Bienen acknowledged students and faculty who won awards or scholarships during the year. These included Tony Award-winning faculty members Todd Rosenthal and Anna Shapiro, the four students who won scholarships to study at Oxford and the seven headed to Cambridge, and the record 29 Fulbright recipients.

    Bienen expressed pride in the athletic programs as well, something he has done more often in recent addresses. “We continue to enjoy unprecedented success in intercollegiate athletics,” he said. “For the fourth straight year, Northwestern finished among the top 40 universities in the country in NACDA’s Directors’ Cup standings, which measures overall athletic success.” Bienen even had a rare piece of advice for incoming president Morton Schapiro, after one question speculated that Schapiro was watching the webcast. “Morty, if you’re there,” he said, “you’d better be rooting hard for [the men’s basketball team] tonight.”

    There was not a lot of reflection or discussion of transition in the speech, but Bienen closed by saying “I hope that I, too, have made contributions to Northwestern. It has been an honor and pleasure to serve as president of this great university.”

    Questions for Bienen and the panel after the speech generally returned to the economy or the transition to Schapiro’s presidency.

    Bienen and Pamela Beemer, Associate Vice President for Human Resources assured the audience that, to their knowledge, TIAA-CREF, a financial services company that the university employs, was not linked to the failed insurance giant AIG, as some recent stories suggested.

    One audience member asked if the administration planned to increase the traditionally small involvement of faculty in decision-making. Bienen rejected the notion that faculty has played a small role in important decisions, but acknowledged that, when decisions, especially financial ones, become increasingly complicated, “it’s hard to have a participatory democracy.”

    The outgoing President continued to offer measured optimism, both about the University and about the economic crisis, in the question and answer session. “I take a biblical view of the markets,” he said. “‘This, too, shall pass.’”


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