2016 State of the College Address

Welcome, everyone. I hope you all enjoyed homecoming weekend as much as I did. There were tons of alumni back, the bonfire was inspiring, and I was vindicated when the Men's Hockey Team defeated Michigan 3-2 on Saturday night. So I think we're ready to try football now! That was a joke.

This is the state of the college address that happens every fall. I realize it's been four years, almost exactly, since I was actually named as President and knew that I was returning to this institution which means so much to me, which has done so much for me. It's been a busy, intense, wonderful four years. I've learned so much about this amazing community, about the institution, the way it operates, about myself. The learning continues. One thing I've realized is I'm always so happy when I'm learning things. I credit that back to my Dartmouth liberal arts education, which stoked in me the value of learning and has stuck with me ever since, and I'll have more to say about that later.

In a little while I'm going to ask the Provost to step back up again and she's going to be talking about the strategic priorities effort, which she and the academic deans are leading, and is looking to try and identify priorities for the institution for the next decade.

I do want to say a couple words about that, and the first thing is the need to always be moving forward. You've heard me talk about this before, you've heard me talk about the Red Queen Hypothesis, the hypothesis from evolutionary biology, which essentially says if you're in a competitive environment, to stand still is to fall behind. It's hard to think of a more competitive environment than the elite end of higher education. We have well-resourced and crafty competitors who are innovating and advancing themselves all the time, and so we have to be doing that, likewise.

Also there's an evolving external context around all of higher education, and we need to be mindful of that, we need to be adapting to that. There are lots of reasons that Dartmouth, as awesome as it is, still needs to be moving forward.

As we do, of course, we need to nurture and enhance those things that are so truly special about this institution. What comes to mind right away is the tight community that's always characterized this place. The teacher-scholar model, which is very special here, and is exercised with real energy and thought. And then, our commitment to the liberal arts, which as I said, has really shaped me as a person, and I think is exactly the right education as we prepare students to go out in the world, and again, I have more to say about that later.

So, things that are going well: first on this list I'd put the education that we provide within the formal curriculum. I think it is just fabulous. It is absolutely best in class, and there are three parts of this that I'd like to talk about.

First part is just the quality, rigor, and challenge of what we offer our students. I see this in the enthusiasm that faculty have when they talk to me about what they're teaching, and I'm right there, too. We did the central limit theorem this morning, one of the most exciting things I can imagine - if we have time at the end I'll tell you a little bit about it! But also, the seriousness with which the faculty, all of you, clearly approach your teaching, the consideration that it gets for tenure and promotion, which is very serious. And then the feedback that I get back from countless students and parents. I always ask parents, "Are your kids being challenged?" and I always ask students, "Are you learning a lot?" and the answer is invariably an enthusiastic yes.

This shows up in our reputation. If you look at the US News, which has some reputational rankings in it, the one from guidance counselors is 4.9 out of 5. In the work that our consultants are doing around admissions, one of the things that they report is that reputationally we offer a very rigorous and challenging curriculum. That's undergraduate – within Tuck, the MBA rankings put Tuck at least on average in the Top 10, and some of them deep into the Top 10. And Geisel, the placements out of Geisel are spectacular within residencies. In Thayer, the demand for Thayer courses is through the roof, the gender balance that's been achieved is awesome, and the experiential learning opportunities in Thayer are second to none across campus. So, the first point of things going well is what we're offering through the formal curriculum, it's just fantastic.

The second part is – and I'm going to come back to this – our unwavering commitment to the liberal arts. When I think about, "What is it that characterizes the liberal arts?" one way I like to say it is that we're playing the long game. We are actually focusing on quality of mind, how to teach students to think, how to ask questions, rather than preparing them for specific intellectual tasks. We provide students specifically with broad knowledge of the world, but more than that, with a thirst to be broadening themselves intellectually all the time, to be intellectually curious, to love to learn. Again, coming right back to me, I feel that way. I feel like I'm happiest when I'm learning, and I think that's because of the education I got at Dartmouth.

We also provide students, with our liberal arts training, a deep dive into one subject area. That, I think, is to inspire them by viewing the frontiers of knowledge, and also to humble them by understanding what great thinking has gone ahead of them.

Lastly, we prepare them with this whole set of generally applicable intellectual skills, timeless intellectual skills, great communications skills, critical thinking skills, emotional intelligence and empathy, having a well-developed creative mind, having leadership skills, effective numeracy – a whole set of skills which are generally applicable to many, many tasks in the world.

We aren't preparing them for their first job, we're preparing them for their first ten jobs and many other things they'll encounter in life. It is, to me, the most powerful kind of education by a mile, hands down.

It's also very important at this moment in time, because we're at a very poignant moment in time. Technology has forever overtaken the manual tasks that people do, the physical tasks, the brawn that people have. But now we're at a point with artificial intelligence and machine learning where technology's actually doing some human intellectual work. My favorite example is that 5 million people in this nation earn their living by driving: they drive trucks, limos, taxis, delivery trucks. Will those jobs be here in 20 or 30 years? And that doesn't apply just to drivers, it applies to a lot of what doctors do, some of what lawyers do.

So, we need to do two things as we prepare students for this world that's coming at us. One is, we of course need to teach them how to harness this amazing power of technology that's growing stronger every day. We also need to make sure they are masters of those things that are uniquely human, that are beyond the reach of technology. These are things like emotional intelligence, empathy, the power of persuasion, creativity, integrative thinking – being able to synthesize things from many different disciplines, being able to take examples from history and apply them by analogy to what's going on today.

As we look at this world where machines are going to be doing more and more intellectual tasks, a liberal arts education is exactly the right thing to prepare our graduates to actually not only thrive, but to lead. So, that's the second thing – our commitment to the liberal arts is unwavering, and that's the second thing that I think is going really well here.

The third thing that I think is going really well, in terms of what we offer in the classroom, is the amount of innovation and experimentation that's going on. DCAL has become a center of this, they have their gateway initiative, they have the new experiential learning RFP that went out – there was a great uptake on that, some really interesting courses. Arts and Sciences has its own experimental course initiative. That's brought forth some really creative thinking, particularly across disciplines. Within Tuck, Tuck Go is an example of how Tuck is experimenting with its curriculum. At Geisel, the incorporation of health care delivery science topics into the MD curriculum. Then Thayer, as you probably know, won the Gordon Prize from the National Academy of Engineering for experimentation within the engineering curriculum. So, that is all part of the first of the things that I think are going really well, which is what we are offering through the formal curriculum. It's fabulous, it's really high quality, and we're constantly experimenting to make it better.

Second thing that's going really well is our commitment to the teacher-scholar model. It's part of what defines our institution. When I talk to students, when I talk to parents about "What's most important to you here?" To alumni, "What do you remember from your Dartmouth experience?" – it almost always involves connection to faculty, and having faculty who actually knew them as students, or as current students, who taught them something interesting. So the teacher-scholar model is alive and well.

I will say, right off the bat, it is really hard to do both. It is really hard to be a great teacher and a great scholar at the same time. I say that not as a casual observer, but as someone who did it for decades, and did it at an institution which really placed higher value on one rather than the other.

What we need to do as an institution is we need to remove as many barriers as we possibly can to doing that work, to being successful at both. I was reading the executive summary to the science strategy group this morning, and they definitely note the challenges to doing both of these well.

The first of the challenges I point to is time. Time is what every faculty member needs more of. I don't think that we want to create time by saying that you can do one of these two less well than the other – we're committed to doing them both really well. That leads me to believe that we need faculty expansion, just more people to do the work at this institution. We've already launched some initiatives for faculty expansion, but I expect that that will be a major thrust going forward as we head into campaign. It's so that we have the time and energy to really successfully conduct the teacher-scholar model.

Second is academic facilities. I realize that we need space for faculty expansion, but we also need to modernize our facilities and our equipment to support the kind of work that we want to do, both in our teaching and our research. Again, this was noted in the science strategy plan.

There are some obvious things we can do, short term, to work on space. We can and are moving some administrative work away from the area around the green. We can take advantage of space that's being freed up in Remsen-Vail. We are looking to renovate Dana. We are hoping to expand Thayer and co-locate CS, Computer Science there, which will free up Sudikoff. So there are some things we can do short term, but longer term we're going to really need to look at, probably, new construction, and definitely renovation of many of our buildings, which are aging.

We are in sort of a disadvantageous situation in that we have under-funded depreciation to a great extent on this campus. Our current annual loss on the depreciation is about $65 million. So we should be putting $65 million per year into our facilities, or into reserve funds to build new buildings. We're funding that at about $20 million, so every year we're losing $45 million in what should be put in facilities. I'm not saying that to cry in our beer, I'm just saying that to say we have a challenge here. We will figure out how to overcome this challenge, but it isn't necessarily going to be easy and automatic.

The third thing I'd say, in terms of helping faculty with the teacher-scholar model, is boundary crossing. This is where I personally find a lot of excitement within academic work. By boundary crossing, I mean working across disciplines, I mean working across the basic to applied research spectrum, and I mean working across academic generations, so creating instances where undergraduates can work with grad students and post-docs and faculty, together with visiting scholars and practitioners from the outside.

Many of our early initiatives were aimed at this kind of boundary crossing in one way or another: the support for experiential learning, the A&S experimental courses – as I said, many were across disciplines, the faculty cluster initiative hit all three of those simultaneously, elite post-doc programs we've been investing in – the international relations fellows, the society of fellows, to fill in part of that academic generation spectrum, and the new Irving Institute of Energy and Society is really infrastructure for all of those things in the area of energy.

So, that's the second thing that I think is going really well – our commitment to the teacher-scholar model. As I mentioned, there are ways we need to provide support to make that more possible for you to succeed in both those areas. I really admire the institution for committing to that, and sticking with their commitment to that.

The third thing I'll mention that I think is going well is that we are driving more intellectual and academic content into the lives of our students outside the classroom. This is a work in progress, but I think that we are definitely making progress here.

For example, the house community system, that's one of the main objectives of the house community system, is to create greater connection with faculty, but also through the house professors, to bring in more intellectual life to what our students do in their residence halls. I would comment that I am really impressed by the faculty who have stepped up as house professors, they are some of our most creative and most dedicated. I'm very optimistic about where that's headed.

Also, we've offered support for extracurricular activities – which are outside the curriculum, but I think are ones where students do learn and grow. I would count DEN amongst that, DALI, our support for undergraduate research, there's been funding to make outdoor programs available to all students regardless of need. I think that that's another area where we're definitely making progress, and I'm proud of what's happening.

The last thing I would say about things that are going well on campus that I want to highlight is that we have really engaged with some of our serious institutional challenges. We've tried to not sweep them under the rug, we're actually confronting them directly, and I think that's terrific. Some of them have been longstanding challenges for our campus, and I wouldn't say that we've solved them but we're going at them directly. And that is a great segue into the challenge section of what I want to talk about.

So, what are some of the challenges we're facing? Definitely building a diverse and inclusive campus, that's one. The inclusive excellence initiative has just launched recently. I'm very delighted that Sean Harper from the University of Pennsylvania, who is one of the leading scholars on race and gender in higher education, has agreed to lead our external evaluation committee for that. The house communities, of course, has an important role in this, but faculty and staff diversity remains amongst our highest priorities here and biggest challenges. I do have to comment, we made real, notable progress last year on faculty diversity, but we're not where we need to be. We need to keep our foot on the accelerator and keep focused on that going forward.

A second area of challenge is extreme harmful behaviors in the student life area. We know how damaging these can be, in actuality they're tragic and deplorable – either real high risk drinking or sexual assault – beyond that they've had an outsized reputational impact on our institution. I feel like, in terms of the news cycle, it's been better the last three years, and that's good. Some of you may have seen the New York Times article yesterday where they picked out five campuses that they thought were heavy-drinking campuses and reported on those – we were not amongst those – but notably, two of the five had followed us in banning hard alcohol, interestingly.

These issues sap energy and focus from the campus when they occur, and they are, as I said, tragic and deplorable. Moving Dartmouth Forward is about 18 months old, and we have an external independent advisory group or evaluation group, chaired by Larry Bacow. They will report to the trustees in November – every November they report. There will be a written report, so you can look at that and see what their view is of how much progress we're making.

Third challenging area is the Geisel restructuring, which took place this year. It was intended to more strongly position the school academically, as well as address financial challenges. It was very difficult work – I have to give enormous credit to the faculty and the dean and all the administration of Geisel. It's been important but very difficult work. We've accomplished a lot, the school is much better positioned, more strongly positioned. If you look at the core faculty there, they've actually seen growth in research revenue – about 7% compound annual growth rate over the last three years. Faculty hires are underway in several departments. I feel like a corner's been turned, a lot of difficult work's been done, we're in a strong upward position now. Duane, congratulations, Leslie – all the faculty at Geisel, you've done great work.

The last area of challenge I want to mention is just our general resource challenge at campus. The revenue budget is more tightly constrained than in any time in the recent past, as near as I can tell.

That begins right off with tuition. Tuition is a great revenue stream because we actually control it, so that's good, but as I think you know, there's extreme pressure to constrain growth of tuition revenue, and for very good reason. If you look at actual growth and real earnings for people who are high school drop-outs, have only a high school degree, have some college, have a bachelor's degree, have a master's degree – all five of those categories have lost between 6 and 12% earning power since 2000. So when we come along like we did last year and we raise tuition 3.8% it may seem moderate to us, but it's 3% above inflation, those people get unhappy, understandably. We have students who have only seen their family circumstances get worse for their entire life.

So there's real constraint on how much we can raise tuition. We do offer very generous financial aid, which is terrific and I admire that, but that actually also cuts into our tuition earnings. Last year, as I mentioned, we raised the sticker price 3.8% - the net tuition increase after financial aid was 1.1%. So, tuition – it's a source, we do control it, but it's highly constrained.

On the investment side, the growth of our endowment, the investment returns we can get on our cash, we really entered a new world. We, along with all other universities, used to count on 8% compound annual growth rate through investments on an average basis. Now I think the consensus is between 6-7% and in fact on Saturday I was talking to one of the great minds in the investment world and he said maybe 6% is what you can count on for investment returns going forward. That's kind of a new reality for us.

I mentioned earlier that we have challenges on the expenditure side, we have deferred maintenance, and we also have long-term liabilities for health insurance for retirees. So, we have real constraints on the operating budget side. There are solutions under way, we are looking at an initiative which will really try to find greater efficiency on our administration and operations side, so we can fund academic initiatives, and we have a comprehensive campaign in the planning.

Let me talk a little about the campaign. First of all, last year was another terrific year: $318 million. It's another record for us, another all-time record in terms of actual new gifts and commitments. That does not count the Irving gift, the Irving gift came in this year.

Early success is good as we're thinking about heading into a campaign. I sometimes hear people say, "Oh my gosh, you're getting all these gifts, all the gifts are gone at this point." That's actually exactly the wrong way to think about it. What happens is that early gifts as you're moving up to a campaign are an indication of the power, of the idea set, and the enthusiasm of your donor community. The sort of rule of thumb if you want something in your head is that when you declare your campaign as public, you should expect from that point on to get about three-halves as much as you've already gotten during the silent phase. So, the more we're getting now, the better the outlook is for the future. So, we aren't picking off all the gifts early. It's a happy circumstance to get early giving.

The donor community is different, it's evolving rapidly. It's very much affinity donors now, donors who want to contribute to whatever turns them on, however they want to make a difference with their dollars. There are many more of those than there are, "Let me give to Dear Old Dartmouth because I love the place." I think we all agree, and this is an absolute bedrock principle, is that donors never tell us what to do. They never drive the gift process. If you put those two together, what it means is that we must develop a robust pool of proposals, all of which strongly advance Dartmouth, and then we can look to match those with donor interests. Part of what you're going to be hearing from Carolyn, the work she's doing with the deans, is to develop a robust pool of proposals of things that work well for us, that are important for us.

Couple more things as we go into the campaign: donors are looking for prioritization, they're looking for institutional commitment. The work we're doing to try to move resources from administration and operations into academics is not only the right thing to do for the institution, but it will be helpful for us when we approach the donor community.

The other thing to remember as we look at the priorities, is these are the priorities regardless of the funding source. When you see Carolyn's priorities, it doesn't mean they're all coming from philanthropy, some will come from internal funding.

Some of these are very difficult to raise money for. Unrestricted gifts, generally, are much harder to get now. I talked about there being affinity donors, but specifically if you go back to 1971 and look at all private universities across the country, 24% of philanthropy was unrestricted in 1971. By 2011 it had dropped to 12%, and it's probably lower now.

Annual funds are struggling in particular. Some of you may have seen the New York Times article on August 4^th of 2016, which was all about annual funds struggling. They highlighted Amherst, Yale, and Princeton in that article: Princeton has seen a 6.6% drop in annual fund, Amherst a 6.5% drop in annual fund. But if you look at Staff, which is a collection of liberal arts colleges, they collectively have lost 29% annual funds from last year to this year, so annual funds have been struggling in lots of places.

All of this indicating that we have a donor community, as we head into the campaign, that's really more affinity focused, so they're going to be looking to fund things that are important to them, and we of course have to give them proposals that are important to us. So, that's a bit of what the strategic priorities process is helping us get ready for, and with that I will turn it over to the Provost.