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11/12/96

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Casper outlines "State of the University"

STANFORD -- Stanford faces mounting pressure to sharpen its competitive edge in the face of decreasing federal support for higher education, President Gerhard Casper told an audience of about 400 who gathered in Kresge Auditorium Nov. 7.

"Stanford is fortunate to be among the American universities best positioned to rise to the challenges of constrained revenue, and to seek greater selfreliance," the president said in his annual State of the University address. "But we must do so unceasingly, for as fortunate as we are, our financial resources are still surpassed ­ in some cases by a large margin ­ by those institutions with which we most compete for the best faculty and students."

In his 40-minute talk, Casper cited statistical information measuring Stanford's relative strengths and weaknesses in four critical categories ­ people, finances, the physical plant and reputation ­ as a jumping off point to discuss the university's position relative to its competitors in the East.

After the speech, several audience members praised Casper for outlining in detail some of the key issues with which Stanford is grappling as it approaches the new millennium.

"I think it was very informative to provide the context for what the university is doing," said Pat Jones, professor of biological sciences. "It is useful to present it as a package."

John Brauman, professor of chemistry, said he thought Casper's talk was "thoughtful and helpful to everybody in understanding where we are and where we are going."

Increasing the endowment

Casper began by talking finances.

For several decades, he explained, Stanford has been engaged in many more projects than its $3.6 billion endowment even remotely can support. The university's endowment income, he noted, covers only 12 percent of its annual expenditures.

"It is not much of an exaggeration to state that, every year, we must generate anew 88 percent of what we need to do our work," he said. "With the budget required to support our range of activities, that means that we must muster more than $1.2 billion in 'soft' money every year."

Stanford's success in garnering federal funding for research support has gone a long way toward helping the university meet this need, the president said. Government grants and contracts, he pointed out, make up about 40 percent of the university's operating revenues, followed by tuition and fees, about 23 percent, and private gifts, grants and contracts, about 13 percent.

But Democratic and Republican budget plans to reduce federal non-defense research and development funding by between 14 and 18 percent in real dollars during the next six years have put the university in a difficult position, he said. "If government continues on this path of decreased investments in the nation's future and in the institutions that make innovation possible, we could be very vulnerable," Casper said.

Tuition, Stanford's second-largest source of revenue, also faces growing constraints, he said. In recent years, he noted, the university has tried to restrain tuition increases in response to the growing burden felt by families who make too much to qualify for sufficient financial aid but too little to pay the full bill. The university, in turn, is feeling the crunch because even undergraduates who pay full tuition still contribute only about 60 percent of the cost of providing their own education, Casper said.

To combat this situation, he said, the university must continue to increase the number of alumni who contribute to the Stanford Fund, which allocates about 60 percent of money raised for undergraduate scholarships.

And the university must boost its endowment, Casper said.

Judging from the competition, he added, the university has a long way to go: Stanford's current endowment income supports only 39 percent of undergraduate financial aid, compared to Princeton's 94 percent and Harvard's more than 50 percent. These institutions' larger endowments also support a bigger portion of their faculty salaries, Casper said. At Harvard, endowed chairs provide nearly twice the percentage of faculty salaries as at Stanford.

"Yes, it is competitiveness that drives our emphasis on the Stanford Fund and other annual giving, and on Stanford Graduate Fellowships and other endowment," Casper said. In a reference to the controversial U.S. News and World Report college ratings, he added that "the competition that motivates us is not for magazine ratings, but for the best faculty and staff."

Renewing the physical plant

On another topic, Casper elicited laughter from the audience by noting that "it may not have escaped your notice that the campus is experiencing a bit of construction."

The university, he said, is currently in the midst of an unprecedented 5-year construction cycle that will add new buildings to the campus and renovate old ones.

"As measured by expenditures, even adjusted for inflation, we are in the most intense period of construction in the history of Stanford University, including its founding," the president said.

"During the five years 1996-2000, we will spend an estimated $600 million for construction, and that does not include another $100 million for utilities, infrastructure and deferred maintenance," he added.

While this may seem like "unbridled expansion and thoughtless spending" to some, Casper said, caring for the university's physical plant is as important as increasing the endowment.

"Renewing our physical resources is one of the key ways in which ­ having found the best possible faculty and students ­ we can draw them here and give them all possible support," he said.

Attracting the best

"Lively and frank interaction of educated people" is the ultimate mark of a "true" university, Casper said. Noting that the quality of such interaction is tough to gauge in quantitative terms, the president cited indicators of excellence among faculty, students and staff.

One measure of faculty quality across the board, Casper said, is the number of academy memberships: Stanford trails only the California Institute of Technology in memberships in the National Academy of Sciences, National Academy of Engineering and the Institute of Medicine, adjusted for faculty size. In addition, he said, 178 members of the university's current and emeritus faculty have been elected to the American Academy of Arts and Sciences.

The emphasis that Stanford faculty members place on teaching is another measure of their excellence, Casper said. That is why he has placed high priority on initiatives such as Sophomore College and Stanford Introductory Studies to foster more one-on-one interactions between faculty members and undergraduates in small group settings, he said.

Another measure of teaching productivity is the number of doctoral students who graduate from the university per year, Casper said. In 1995, Stanford led the nation's private universities in the production of Ph.D.s, with 583. "Given that we do not have the largest graduate student population, and that so many of our graduate students are pursuing professional degrees, this is a truly remarkable figure," he said.

Turning to the undergraduate student body, Casper focused on the group of Stanford applicants who present the highest academic credentials based on objective criteria.

This category of applicant has achieved a perfect grade point average, recalculated by the admissions office to a common standard, and combined SAT scores of at least 1450 out of 1600. The academic ratings were adjusted to account for the recentering of SATs and are used by the dean of admissions as a basis for comparing admitted classes of the past decade.

According to an overhead slide that Casper showed, the percentage of students meeting these criteria in this fall's entering class was 27 percent, compared with 26 percent entering last year, 19 percent in 1990 and 16 percent in 1985. "Thus, while not the only measure, the percentage of [this top category of students] in an incoming Stanford class is one indicator of the academic strength at the top of that class. And that strength is clearly growing," he said.

Casper also noted that the support that staff provides for faculty and students is invaluable to the research and teaching enterprise.

"I am somewhat bemused by the way many on campus refer to certain categories of staff as the 'support staff,'" Casper said. "At a university, all of us are support staff ­ secretary or president, lab technician or provost, groundskeeper or dean ­ because all of us are here for only one reason: to support faculty and students in their work of teaching, learning and research. It is an honorable and a vital role."

Reputation

In the last part of his speech, Casper briefly discussed Stanford's reputation, using information derived from the National Research Council (NRC), which conducts the most extensive study of the nation's Ph.D. programs and examines only programs it deems to be of legitimate quality.

"No university in the nation even attempts to offer all 43 programs that the NRC studies, but Stanford comes remarkably close," Casper said. "We were ranked in 41 of the 43 categories . . . and Stanford does this with an endowment that, while clearly large, is less than half that of Harvard, and only three-quarters that of Yale or Princeton. Compared to our competitors, we have done more with less."

But Stanford's continued success cannot be taken for granted, the president warned.

"We must continue to do more with the resources we have, and we must build greater resources by reinvesting in our people, our financial assets, our plant and our reputation."

-mc-

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