In annual address, Hennessy reflects on the past five years

L.A. Cicero Hennessy

President Hennessy spoke at the annual meeting of the Academic Council last week in Cubberley Auditorium.

Upon his inauguration in the fall of 2000 as the university's 10th president, John Hennessy asked the question, "What shall we be in 10 years?" Almost five years have passed since he uttered those words, and last week Hennessy took the opportunity of his annual Academic Council address to reflect on his tenure and shed light on the road ahead.

Hennessy's speech, titled "Looking Backward, Thinking Forward," highlighted the key successes of the past five years, including the $1 billion Campaign for Undergraduate Education, a new early admissions program, new interdisciplinary initiatives and a significant financial recovery following several years of budget cuts after the dot-com bust. There were major hurdles along the way, Hennessy noted, such as the housing crunch that plagued much of the Bay Area; the ill-fated UCSF-Stanford hospital merger that had just been undone; negotiation of the general use permit amid concerns about growth, housing and traffic; and the launch of the Bio-X initiative.

Hennessy also used the occasion of his speech to highlight several goals for the university, including an "ambitious" five-year goal to eliminate any current financial contribution for families with incomes below $45,000, a policy that was widely praised when it was adopted by Harvard and Yale universities. Hennessy also recommended a longer-term goal of moving toward need-blind admissions for international students instead of the limited financial commitment the university currently provides.

"While we still face financial challenges, I think we must commit to an aggressive goal to continue to boost financial aid, especially for low-income and international students," Hennessy said. "As recent studies have shown, even the modest contributions we require for low-income students today can be a burden for those families. … I believe that both goals are achievable with the support of our alumni and friends around the world."

Academic initiatives have been a major cornerstone of Hennessy's presidency, and he spoke at length about the process of identifying and executing the high-priority initiatives of interdisciplinary biosciences and bioengineering; environmental science, engineering and policy; and international affairs.

"I believe that Stanford, as one of the great research institutions, has a responsibility to make a positive contribution to addressing the challenges the world faces—from advancing the state of human health care to sustaining our environment for future generations to preserving peace and improving the human condition around the world," Hennessy said. "Stanford, with its breadth of excellence and its contiguity, is well positioned to pursue such multidisciplinary initiatives. Such initiatives will require new funding and new facilities, as well as different ways of organizing teaching and research."

Hennessy indicated support for a fourth initiative focused on the arts that a faculty committee is presently exploring. "Despite the growth and increased reputation of Stanford in the arts, I personally believe that our programs in the arts do not play as central a role as they should in a university of Stanford's caliber," he said. "I hope that we can address this discrepancy in the years ahead."

Building new facilities

The process of modernizing and building new university facilities remains a key challenge, Hennessy emphasized. The general use permit that the university negotiated with Santa Clara County officials allows the university to build new facilities over a span of two decades in exchange for commitments including building housing, preserving open space, creating trails, controlling traffic growth, donating financial support for public schools and providing land for community services.

The permit escalated the university's need to use space wisely and maximize the use of land in the core campus, Hennessy said, leading to the move of some functions, including a library storage facility and some hospital outpatient care clinics, to off-campus locations. The university will examine the possibility of relocating other functions off campus, Hennessy said. The need to preserve open space within the core campus also will mean that some parking will have to move to structures located on the periphery of campus or below ground, he said.

"We recognize that the open space in Stanford's core campus is an essential part of our identity and differentiates us from our peers, and we will not sacrifice it," Hennessy said.

New academic initiatives require new facilities, and Hennessy mentioned eight buildings planned for the science and engineering and medical school areas of campus (including the recently announced Science and Engineering Quad, dubbed SEQ 2) as examples of the university's commitment to replacing obsolete facilities with new ones that will attract top-notch researchers and students.

Nearly $300 million has been spent on housing since the fall of 2000, Hennessy noted, including new residences for graduate students, renovations for undergraduate residences and the apartment complex Stanford West, which almost entirely houses Stanford families. Despite the additions, the university is still unable to meet the full demand for graduate housing while many undergraduates remain in overcrowded complexes, Hennessy said, creating the need for additional housing. The largest gift for housing in Stanford's history will help the university build a new 600-bed graduate residence complex behind the Law School, which will in turn help unclog the housing system for both graduate and undergraduate students. The $43.5 million donation from businessman Charles Munger and his wife Nancy, a Stanford alumna, paved the way for the Munger Project. Hennessy expressed appreciation to the university community for its suggestions for the project, ideas that helped create a better design that reduces its density and massing, he said.

Financial pressures, successes

Financial challenges have been of utmost concern to the university over the past five years, Hennessy noted. At the end of the 1990s and its economic boom, the university found it difficult to retain faculty and staff, prompting the university to offer more aggressive salary programs and an enhanced faculty housing program. The boom was quickly followed by the bust in the second half of 2000, Hennessy noted, which led to a drop in projected endowment income and increases in financial aid. The university also found itself in the position of needing to support programs that were planned under more optimistic assumptions.

The university responded with several years of budget cuts and a one-year salary freeze, and, thanks to a more rapid return on endowment earnings than had been anticipated, the university was able to bring the budget back into the black at the end of fiscal years 2003 and 2004. Financial challenges still remain, Hennessy said.

"Although we have had two consecutive years of positive financial results, we will continue to face financial challenges," Hennessy said. "Among our close peers, Stanford still has one of the lowest endowments per student and the highest cost of living."

The financial turnaround of the medical centers was particularly noteworthy, Hennessy said, coming on the heels of a dissolved merger with UCSF that left the hospitals with a combined deficit of $31 million. However, sound financial planning, cost cutting and strong leadership helped the Stanford Hospital and Clinics and the Lucile Packard Children's Hospital report surpluses of $101 million and $47 million, respectively, last year, Hennessy said.

Development has been a key player in the overall support of the university, Hennessy noted. The efforts were largely buoyed by a $400 million award from the Hewlett Foundation in 2001: $300 million to the School of Humanities and Sciences and $100 million to the Campaign for Undergraduate Education. Stanford continues to rank in the top two or three in the nation every year in fundraising efforts, thanks to the hard work of the Office of Development, Hennessy said.

Thinking forward

Hennessy said Stanford has helped transform higher education by striking out in bold new directions. He said he hopes future generations will look back and see that university leaders were thinking forward about what Stanford could do to make a larger contribution to the world.

If the university is to continue to lead the way, it must answer two questions, he said: How we can use our incredible research capability to help understand and find solutions for society's most important problems? And how can we train our graduates to be lifelong contributors and leaders in the 21st century?

"To address these questions, we will need to bring together and build bridges among the best scholars both for research and teaching, and let our goals drive the organization and structure," Hennessy said. "We may need new ways of selecting and appointing faculty. We will need to help students learn outside of their primary discipline to better equip them to be lifelong learners. We will need facilities to enable our efforts, and we will need to cultivate existing avenues of research support, as well as develop new ones."