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Remarks by President John J. DeGioia

Faculty Convocation -- Spring 2004

Georgetown University

March 23, 2004


I look forward to this convocation each year, representing as it does a special occasion for the University -our opportunity to honor those who have served us long, served us with distinction, served us with honor. We take this time each year to reflect upon the character of this community - of the values and commitment, the achievement and the engagement of the women and men who comprise this Georgetown community.

There is much for us to acknowledge in the 215th year of the history of this university. Dan Sedmak is completing his first year as executive vice president for health sciences. We are very pleased to have his leadership. This is also the first year for Chris Augostini as the University's senior vice president, chief financial officer, and treasurer, after serving brilliantly as CFO for the Law Center. I am very pleased that yesterday Provost O'Donnell announced the appointment of Dr. Todd Olson as vice president for student affairs and dean of students.

We share in the satisfaction of many faculty achievements. Judith Feder, dean of policy studies at GPPI, has been elected to the Institute of Medicine of the National Academies. Robert Gallucci, dean of the Walsh School of Foreign Service, has assumed the presidency of the Association of Professional Schools of International Affairs.

Mark Tushnet, Carmack Waterhouse Professor of Constitutional Law, is serving as President of the Association of American Law Schools.

Jane McAuliffe, Dean of Georgetown College, is President-Elect of the American Academy of Religion.

Ken Dretchen, professor and chair of pharmacology, has been named sole consultant to the Infrastructure Protection Division of the Department of Homeland Security for all issues concerning biological and chemical agents. David Lightfoot and Raffaella Zanuttini presented their work on counting the number of languages that exist in the world during the annual meeting of the American Association for the Advancement of Science last month.

We inaugurated a number of new chairs this year. Dr. Peter Phan has been named to the Ignacio Ellacuria, S.J. Chair in Catholic Social Though in the Theology Department. John R. McNeill now holds the Cinco Hermanos Chair of Environmental and International Affairs. Prem C. Jain is the new Elsa Carlson McDonough Chair in Business Administration.

This year, we celebrate the inauguration of the African American Studies minor, which draws on the interdisciplinary strengths of many departments. We share in the pride of our Government Department, ranked 16th out of more than 400 such departments in universities around the world by the London School of Economics. In January, new rankings by The Financial Times ranked the full-time MBA program of the McDonough School of Business 12th in the nation and 17th worldwide.

John McNeill published The Human Web, a Bird's Eye View of World History, co-authored with his father, the distinguished historian William H. McNeill.

Victor Cha, associate professor of Asian studies, co-authored Nuclear North Korea: A Debate on Engagement Strategies.

Ariel Glucklich, associate professor of theology, has written a novel entitled Climbing Chamundi Hill: 1001 Steps with a Storyteller and a Reluctant Pilgrim.

Law Professor Jane Stromseth edited Accountability for Atrocities: National and International Responses, a groundbreaking book examining the challenges of holding human rights adversaries accountable for genocide, war crimes, and crimes against humanity.

As always, Georgetown is in part, defined by the accomplishments of our students and alumni. This year, we take pride in many achievements. Senior Iga Wegorzewska, a biology major, is one of 11 students nationwide to win a Churchill Scholarship for advanced studies. This year's Medical School graduating class learned last week on Match Day that they'd been accepted into 217 residencies, including outstanding programs at Harvard, Duke, Hopkins, Mayo, and other top schools. And General James Jones, 32nd commandant of the U.S. Marine Corps and a member of the SFS class of 1966, assumed responsibility for the combined military forces of NATO, as supreme allied commander in Europe.

Once again this year, we did what we do well and do often, to serve as a forum for the great issues of our time. We welcomed President José María Aznar of Spain, World Bank President James D. Wolfensohn, and CIA Director George Tenet. The Graduate School's Distinguished Lecturer Series continued to bring stimulating speakers to campus, including Louise Arbour, Canadian Supreme Court justice, former chief prosecutor of international war crimes and recently named UN High Commissioner for Human Rights, and Samantha Power, author of the Pulitzer Prize winning book, "A Problem from Hell, America in the Age of Genocide." Human rights leaders Cherie Booth of Great Britain and William Schultz of Amnesty International were among our Pacem in Terris speakers. We hosted our second meeting on recovery and reconstruction in Afghanistan, a conference to support faith-based organizations responding to the HIV/AIDS crisis in Africa and the Caribbean, and a conference of the Council of Women World Leaders.

Next week, we will welcome Dr. Rowan Williams, the Archbishop of Canterbury and his 3rd international "Building Bridges" conference. This is the first time that the conference, which is devoted to strengthening interreligious dialogue between Christians and Muslims, has been held in the United States. I hope you will be able to attend Dr. Williams' address, "Analyzing Atheism: Unbelief and the World of Faiths," at 6 p.m. next Monday here in Gaston Hall. You are also invited to talks by distinguished Muslim and Christian scholars at 9 a.m. on Tuesday, Wednesday, and Thursday in the ICC Auditorium. This is an incredible opportunity for our community to be engaged in this wonderful process.

Law Dean Judith Areen has received the Equal Justice Works 2003 Outstanding Law School Dean Award in recognition of her efforts to make public interest law an integral part of our law curriculum. I would also like to take this moment to acknowledge that this is her last faculty convocation as Executive Vice President and dean. Judy Areen has been inextricably linked to our excellence at this university during her 15 years of leadership. We will have other opportunities this Spring to formally and enthusiastically celebrate her achievements but I don't want this particular moment to go by without acknowledging her commitment to this institution.

And this year, we made institutional history by completing our $1 billion Third Century Campaign. More about that later. So this day is our time to acknowledge the achievements and the example set by the members of our community. This is also an opportunity to reflect on some of the challenges, some of the work that characterizes this moment in our history.

Three Challenges

I realize that we all have the highest expectations of Georgetown. In fulfilling such expectations, every organization has to attend to underlying financial dynamics that are not its mission but nonetheless affect its mission. We have to address the financial undercurrents that characterize this moment for us so that the University continues to support the academic values and expectations that define us as a major research university.

There are three major challenges that we face as a university. These are not new challenges. They have been present for us for many years. But there are new dynamics that we face at this point in time that require our attention.

But let me begin by establishing a context for these challenges by talking about the trajectory of growth and development that brings us to this present moment.

This is Georgetown's 215th year, and financial challenges have been a reality for most of those years. But a sea change occurred for us beginning in the 1970s. Despite a tiny endowment, as a University community, we decided to take Georgetown to a new level of academic excellence. This collective decision took the form of many defining actions: we adopted a full-need financial aid policy for our undergraduates, which enabled us to support our effort to recruit a truly national student body. We greatly increased the size of the faculty and raised the expectations for scholarship as a condition for tenure. We transformed the physical campuses, adding Henle, Villages A and C, Alumni Square, as well as ICC, Yates and Leavey. Through a brilliant series of five year planning processes, we built the Law Center academically and carved our own unique niche among the nation's leading law schools.

At the Medical Center, we significantly enhanced our research portfolio and expanded our overall mission in medical education.

We financed this investment in academic excellence by using our financial flexibility in creative, even unprecedented, ways. We raised undergraduate enrollment to our threshold and raised tuition to a level consistent with our new peers. In 1978, our tuition was roughly three-quarters that of the schools we now compete with. We closed that gap. At the Medical Center, we placed a greater emphasis on sponsored research. Overall, Georgetown had the capacity to borrow and so we did. We also launched our first capital campaign in 1981.

With this extraordinary level of investment, always grounded in the animating vision of John Carroll and of all who saw Georgetown's potential for greatness, we became one of the few schools in American history to enter the highly competitive top 25 without the advantage 'without the cushion - of old money.

Thus, the financial challenges we face today are the logical and largely anticipated result of a 35-year investment in academic excellence. We found ourselves in new, highly competitive company. Which brings me to our current reality.

Today, I'd like to talk about three elements of our picture: (1) the continued transition of our Medical Center in the face of changing conditions in our society; (2) the financial challenge of competing as a leading American research university without the history of financial strength that characterizes our peers; and (3) the challenge to ensure that this university, with its unique identity-- the oldest Catholic and Jesuit university, located in the heart of the capital of the most influential nation on earth, an institution that is global in scope, and one of the top 25 universities in the nation-- that with this identity, this promise, we adapt and imagine and ensure that our collective actions enable us to fulfill our mission at this moment in our history.

Let me begin with the Medical Center. I'm certain that you know that this has been a challenging few months. This also has been a time of achievement. Dr. Richard Schlegel has developed a preventative vaccine for human Papilloma virus, e precursor to cervical cancer. Dr. Paul Aisen, an expert on Alzheimer's, revealed research results this fall showing that the use of common anti-inflammatory drugs does not slow the progression of Alzheimer's disease, hardly good news, I realize, but significant nonetheless. This work is evidence of the kind of important research done at this institution.

We take great pride in the quality of the 170 students we accept of the 7,500 that apply each year. And pride in the school's consistent ranking among the top 50 medical schools in the country. With our $120 million of sponsored research activity, we are 45th in the nation in terms of the size of our research mission among medical centers. With more than $50 million of that research supported by the NIH we are ranked 61st among medical centers in NIH funding.

Since the Second World War, the moment in American history where our government formally entered into partnership with our universities, the most significant portion of federal support has gone into life science research. Our ability to be considered a research university is inextricably linked with the volume of bioscience research that takes place at our Medical Center. 70% of the sponsored research activity that takes place at this university is conducted at our Medical Center.

Our current reality is that academic medicine has been in a 25-year process of transformation, a transformation that began when universities all around the country grew both their research portfolios and in many cases their clinical operations. Elements of our own growth phase included such steps as substantially expanding the scope of the Lombardi Cancer Center, constructing new research facilities, expanding the clinical business in the late '80s and early '90s, and developing new programs in graduate education.

But outside forces changed the landscape. For Georgetown and many other universities embarking on growth strategies, the 1990s brought the managed care revolution that dramatically cut patient care revenues. Many of the sophisticated therapies provided by teaching hospitals like Georgetown were no longer reimbursed at earlier levels. The federal government also reduced support for teaching hospitals. The financial risks were shifted from insurance companies to those who provide the care.

As a result of these changes, the clinical mission of the University became imperiled. We lost nearly $200 million in our clinical operation from 1996 to 2000. This had two consequences: We lost key financial resources, and we developed a need for new revenue for our research enterprise, which had been subsidized by profits from our clinical mission.

Six years ago, our community faced the wrenching decision to sell the hospital, a hospital we had operated for a century. But doing so was necessary both for our academic mission in the life sciences and to protect the University as a whole. Thus in the second phase of our transformation, we sold Georgetown Hospital to MedStar Health, the largest provider in the mid-Atlantic region, a nonprofit with a Catholic hospital in its system.

The sale eliminated our exposure in the most volatile dimension of the Medical Center but it did not bring closure to all of our financial challenges. After the sale, we no longer were engaged as a University in the mission of clinical care, but we still sustained our missions in education and life science research.

Research is expensive and it requires a subsidy from the institution engaged in that research. Even the best kind of research-- NIH-supported and peer-reviewed-- requires support from the host institution. Virtually no sponsored research covers all of the associated costs. Historically, the source of subsidy for research in the Medical Center came from the revenue produced by the Hospital. The challenge for Georgetown in this third phase of transformation was to find new sources of financial support for research at our current level.

In the summer of 2000, our Board of Directors approved a "restaging" plan for the Medical Center. It called for a greater focus in our research efforts. It was a growth plan that focused on increasing support from philanthropy and from sponsored research-- especially NIH-sponsored research, the best kind.

Earlier this year, we confronted the reality that a growth strategy alone will not get us to break-even by 2007, which was the original goal. And thus we must now adjust our plans. We are now implementing, under Dr. Sedmak's leadership, an effort to bring expenses in line with anticipated revenue. The intent is to complete this effort and get to break-even by July 1, 2006, which is FY 2007.

This is important because the university as a whole cannot subsidize Medical Center research losses indefinitely. We will sustain our research focus, and we will go through the always-difficult work of reducing expenses. To be concrete, we will have to reduce the numbers of non-tenured researchers and staff involved in our research mission at the Medical Center. We're doing this expeditiously with faculty engagement, honoring our established governance mechanisms and with clear priorities that sustain academic excellence.

Moving through these processes of change-- the last two stages lasting more than a decade-- has required determination and tenacity and fortitude of the members of this entire community. This is difficult work. I appreciate the commitment of everyone at the Medical Center and the leaders of the University community as we embark under Dan's leadership on this necessary third stage of the transformation.

Second Challenge

The second of the three challenges is exacerbated by Medical Center financial picture, but it is one we'd be facing even if our Medical Center could break even today. The simple fact is, we don't have the financial strength of the institutions with whom we compete. The most significant indicator of this is the fact of our $650 million endowment-- which is 78th in the nation. That doesn't correlate with being a Top 25 institution. While we raised more money in this past year than in any other in the university's history, and while we are one of only 20 universities in the country that have completed billion dollar campaigns, our endowment is an anomaly in the world of Top 25 universities.

But that is not the whole story. In the early '80s, when we made the decision to build for academic excellence and compete with the finest educational institutions, we began investing in students and faculty, but also in the infrastructure that I mentioned earlier. We transformed the physical campuses over a 20-year period, and we did it by borrowing money. It wasn't until we built the Southwest Quadrangle that we were able to raise substantial donations for a construction project. Today, we carry debt in excess of $600 million, obtained largely to finance critical construction projects on our campuses.

So these financial facts bring us to the present moment, when we sometimes sense that Georgetown doesn't have the resources of the institutions with whom we compete.

Let me be clear, that is exactly right. Our endowment is less than one-fifth of other universities in the top 25. This is our historical legacy as an institution that broke into a new competitive arena against all odds, with staggering aspirations but not staggering wealth. Our investment in excellence worked. The investment that defined our trajectory in the 70s and 80s brought us to a new playing field. Other institutions are richer than Georgetown. But they are not more interesting. They are not better. They do not have some of our unique assets. They do not have our people. They do not have our promise.

We don't have the cushion provided by a big endowment. We don't have the ability to borrow large new sums of money. We don't have the ability to increase undergraduate enrollment. We need to be world-class at managing our precious resources. This will enable us to be sure that we maintain our commitment to our academic priorities and that we can sustain our trajectory of excellence.

The work is demanding but our fiscal realities are not new. We have the right leadership at this time. With Chris Augostini we are benefiting from the finest financial leadership we have ever had. Jim O'Donnell, Judy Areen, and Dan Sedmak are ensuring that our three campuses are managed in the most efficient and most effective manner possible. I am grateful to the leadership of our faculty on all three campuses who are working with Jim, Judy, and Dan to manage our finances in ways that address the particular needs and priorities of each campus.

I am often asked how the University could be facing financial constraints when we just finished raising more than $1 billion. It is important to acknowledge a few facts of campaign math.

Much of the campaign total reflects future commitments that will be made over the course of the next five years. Of the $1 billion that we raised, we have received about 2/3 in cash at this point. The rest will be collected over the next five years.

Of the $664 million we have received so far, more than $300 million was spent over the past 8 years by all of us for current uses in each of our schools on all of our campuses, about $125 million was used to finance capital construction, and about $200 million found its way into the endowment.

This campaign made a big difference for Georgetown, endowing 62 new faculty chairs and professorships, creating 219 new scholarships, enabling us to build critical new buildings, all resources we must have if Georgetown is to compete with other elite institutions for the best students and the best faculty.

The Campaign also helped us build a culture of philanthropy at Georgetown, teaching us that we have a deeply committed Georgetown community that will be the base for an even larger campaign that will begin in the not-too-distant future.

Our Promise

This brings me to the third piece of work that defines this moment in the history of the university. How do we fulfill the promise of Georgetown University? We have an extraordinary mission, a special history, a wonderful community of achievers, built on a record of two centuries. But none of us is satisfied. Every day I meet with a member of our community-- a student, a faculty member, a member of the staff, an alum-- who is passionate about a project, a problem, a vision of the kind of university we are called to be.

I am very pleased with many efforts currently underway to explore how we might better fulfill our promise in the decade ahead. Jim O'Donnell is leading an effort on the Main Campus to explore how we can strengthen the quality of undergraduate learning. This will always be a top priority at Georgetown, forever. I am pleased with Jim's leadership and all of yours who are engaged in exploring ways we can make the undergraduate experience even more academically robust and distinctive.

Or consider some of our new initiatives that have received inspiring development since last year. As a result of work with our faculty and Board, Jane McAuliffe, Chet Gillis, and Josh Mitchell have developed a proposal that would allow us to significantly expand our work in the area of interreligious understanding.

Bob Gallucci and his colleagues are exploring the feasibility of opening a campus of the Walsh School of Foreign Service in the country of Qatar. It would be funded by the government of Qatar, and would allow us to educate students from throughout the Middle East. Other outstanding American institutions are already committed to establishing academic programs there. We are evaluating this opportunity, in consultation with the State Department and embassies from nations of that region.

Supported by Jim O'Donnell, Dennis Quinn has been leading our exploration of opportunities to establish a strong academic presence in Mexico. These opportunities have extraordinary potential. One project would involve the development of a residential learning experience for Georgetown undergraduates together with Mexican students, under the theme of "citizenship in 21st century North America."

What do these initiatives in Qatar and Mexico have in common? We have always had an extraordinary international presence as a university. 52% of our undergraduate students study abroad. Students from 136 nations are here on our campuses. The initiatives I've mentioned are all experiments in what it means to be international, now. They involve new kinds of partnerships with leading institutions in strategically critical parts of the world.

Is this a good use of our time and talent? This is what it means for us to engage the challenges in this moment in the institution's history. Without such focus Georgetown will no longer remain among the great universities in the world. We can't afford to be complacent, focused only on our immediate financial challenges, challenges that, frankly, have characterized this university for 30 years.

Our responsibility-- in the tradition of St. Ignatius Loyola-- is to be creative, to look forward, to build our agenda, to dream dreams that will inspire others to work with us as we create new paths for knowledge and justice in the world.

The people of this community have always responded to the challenges of the moment in the life of this university. It is the people of this community, all of us, who accept this kind of responsibility. That is Georgetown's greatest asset. There's no one who will take this responsibility, if not us. It's just us. It has always been just us. We've got to accept this responsibility, and I'm privileged and proud to work with you toward this great work and all it means in the world.


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