The past year was a challenging one for the University as we managed the consequences of the historic meltdown in the U.S. economy while also contending with repeated rounds of reductions in state support. At the time of this writing in October 2009, the governor has announced a $19 million cut in state support for the University (but with federal stimulus funds offsetting part of the reduction — the actual cut will be $10.3 million). This comes on top of $32 million in cuts during the last three years. Our endowment suffered losses during the past year, as other major endowments did. During the twelve-month period that ended June 30, 2009, the Long-Term Pool, which includes the endowment and foundation assets, was down 21 percent — though recent positive returns have restored some of these losses. The recession and its various effects now promise to be the University's most serious financial setback of modern times, indeed perhaps of all times. Our mission and functions are larger and more complex than they were in 1929. Despite these daunting realities, and against all reasonable expectations, the University continues to thrive in most measurable ways. In the past year, we have seen a new generation of deans settle into leadership positions and begin building new strengths for their schools; new academic programs come into existence; new buildings take shape across the Grounds; and — perhaps most extraordinary, given the state of the economy — continued success in our capital campaign. This report includes details on these issues as well as a full report on the achievements of our students, faculty members, and staff.
As we manage the aftershocks of the economic crisis and look forward to recovery, we benefit daily by the presence here in Madison Hall and throughout the University of expert fiscal managers whose solid work has helped us maintain stability throughout this recession. The rating agencies see us as financially strong: all three major rating agencies confirmed our AAA bond rating this year. In April, we became the first university to issue Build America Bonds, partially subsidized by the U.S. Treasury through the American Recovery and Reinvestment Act (ARRA) — $250 million for nineteen construction projects, saving the University $60 million in interest over a thirty-year term. Our researchers have aggressively pursued ARRA funding made available through federal agencies. As of late September, we had submitted more than 500 separate funding proposals and secured $30.8 million in federal stimulus funds over a two-year period. We started developing the University's treasury function four years ago. New flexibility afforded by the 2007 investment legislation and our still-growing internal bank have successfully managed a large pool of operating funds with efficiency and rates of return not previously seen in universities. The internal bank function has enabled the University and UVIMCO to better manage liquidity during this difficult time.
Implementation of restructuring continued this year, and the University renewed its management agreement during the 2009 General Assembly session. We continued to fulfill our responsibilities to the Commonwealth by fostering economic development in southwest Virginia, improving public schools, and meeting students' need for financial aid. The Rector and Visitors' AccessUVa program continues to be a national model of success. This program enabled 882 new students to enter in 2008. Some 225 students in May's graduating class received full scholarships during their years here. AccessUVa is a massive commitment, and the cost has increased dramatically in this economy. As the recession continues, the number of qualified students increases almost daily, and average need has increased. Overall, 32.1 percent of the undergraduate student body now qualifies for financial aid, up from 23.8 percent in AccessUVa's first year and up from 27.2 percent just last year. We are raising funds now to meet this predictable need. The John A. Blackburn Endowed Scholarship for AccessUVa, established to honor the late Jack Blackburn, our longtime dean of admission, now totals more than $1.8 million. Our agreement with the Virginia Community College System (required under the restructuring program) guarantees admission, based on satisfactory grades in specified required courses, to graduates of Virginia's twenty-three community colleges. This agreement brought some 333 new VCCS transfers to us in 2008–09, up from 193 in 2005–06. In accord with the restructuring agreements, the new University Staff Human Resources Plan has come into service. The new plan enables us to invest in employee development, align the goals and objectives of individual persons with our organizational strategic plans, and recognize and reward the successes and contributions of employees.
Led by provost Tim Garson, a new generation of deans has assumed leadership of the academic enterprise. In the roughly two years since Dr. Garson became provost in July 2007, seven new deans have taken office: Paul Mahoney in Law; Meredith Woo in the College and Graduate School; Dorrie Fontaine in Nursing; Steven DeKosky in Medicine; Billy Cannaday in Continuing and Professional Studies; Kim Tanzer in Architecture; and Harry Harding in the new Batten School. Collaborating with vice president for research Tom Skalak, vice provost for international programs Gowher Rizvi, and vice provost for the arts Beth Turner, these new deans have made an immediate impression as aggressive, charismatic leaders. As academic planning has given way to implementation, we are seeing the fruits of the rigorous work of the Commission on the Future of the University and in the prior decade or so, in the VA2020 planning projects. One prominent example is our recently established Jefferson Public Citizens program that integrates service with academics. The inaugural group of Jefferson Public Citizens consists of sixteen teams of four to five students working with community partners and faculty advisors to complete academically based service projects. These student teams began work last summer in Charlottesville, southwest Virginia, Honduras, South Africa, Belize, Argentina, and Nicaragua.
As part of both the VA2020 initiative and the Commission on the Future of the University, we made commitments to expanding international activities, and we continued this work in 2008–09. Although the economic downturn has had a negative impact on many study-abroad activities, increasing numbers of students are undertaking research overseas, and development of overseas opportunities for students in the professional schools along with increased need-based scholarships have mitigated declines. The number of participants in study-abroad activities dropped less than 6 percent in 2008–09 from 2007–08. Spain, the U.K., Italy, France, and China were the top destinations for our students. Semester at Sea saw record enrollments in the past year, and added several new ports to its itineraries. Fifteen University faculty members and four graduate teaching assistants taught in the program in 2008–09. The summer 2009 voyage focused on the development of human rights around the Mediterranean, with Thomas C. Sorenson Professor of Policy and Social Thought Michael J. Smith serving as academic dean for the voyage. Professor of biology Reginald Garrett led the spring 2009 voyage, which emphasized science. Professor of politics Leonard Schoppa led the fall 2008 voyage, with a focus on the rise of China. Six University students sailed on the fall 2008 voyage; twenty on the spring voyage; and thirty-five last summer. These student numbers are nearly double those of 2007–08.
Building diversity in our student body creates a richer experience for all of our students and prepares them to participate in the diverse global economy. This year, approximately 35 percent of first-year students identified themselves as either minority persons or international students. In 2009, for the fifteenth straight year, the University posted the highest six-year graduation rate for African-American students among major public institutions. In May, Bill Harvey resigned as vice president and chief officer for diversity and equity to become director of the International Reading Association. Dr. Marcus Martin is serving as interim. Dr. Martin has led numerous diversity and public service initiatives within the University and in neighboring communities. Last year, Diversity and Equity collaborated with Student Affairs to inaugurate a chapter of the Ralph Bunche Society. We are only the second predominantly white university to host a chapter of the Ralph Bunche Society. In the past year we continued our commitment to working with small, women-owned, and minority-owned businesses — a commitment that is both our own and the state's. Our total SWaM construction spending increased to 63 percent from last year's total of 54 percent.
Efforts to reduce the University's environmental impact and improve energy conservation and energy efficiency continued in the past year. We have now upgraded more than four million square feet of our facilities with energy-efficient lighting systems, resulting in significant energy savings and reduction of greenhouse gases. The Rector and Visitors endorsed Leadership in Energy and Environmental Design, or LEED, certification for major building renovations and for new construction, including the South Lawn Project. Sustainability activities extend to teaching and research as well. Teams of faculty members and students from the Schools of Architecture, Engineering, Commerce, and the College design and build ecological and affordable modular housing in the ecoMOD project. Students and faculty members have launched the Learning Barge, a floating field station powered by solar and wind energy and used to promote environmental education in the Elizabeth River and its tributary creeks near Norfolk. A Presidential Committee on Sustainability advises other University leaders and me on the quality, diligence, and progress of the University's sustainability programs. This committee is preparing a ten-year plan, scheduled for delivery next summer, to reduce further our greenhouse gas emissions.
Despite the economic crisis, we continue to make progress in the Campaign for the University of Virginia. In September, we passed the $2 billion mark in our effort to raise $3 billion. This remarkable success is a testament to the sense of purpose shared by some 150,000 alumni, friends, and parents around the nation and the world who have made gifts to this campaign. To complete this campaign in the current economic climate will require renewed commitment from all who care about the University and its future. Predicting the final stretch is difficult because this campaign has run counter to national trends since it began. I am optimistic: we will raise the $3 billion in our target and more by relying on one another and by working together toward our common goals. Like our University in our time, this campaign is inevitable and essential.
Looking back on a year in which many of us — alumni, parents, and friends — have made personal sacrifices to sustain the University in this bleak economy, I am reminded of Mr. Jefferson's determination and perseverance in conceiving, building, and funding the University. Many of you have heard Josh Darden (College '58) read his letter to Mr. Jefferson — a document that is at once an acknowledgment of our debt to the past and a ringing endorsement of the public and private values that the University embodies. (The letter is available on the Web at www.campaign.virginia.edu/casteen). Josh's letter pulls together for me many of the basic principles that have shaped the University's character, even in our time. In an 1821 letter to his friend and collaborator Joseph Cabell, Jefferson expresses his gratitude for his and others' relentless work to find and build support for the University, "The exertions and the mortifications are temporary; the benefit eternal."
Faculty members, staff, students, parents of students, alumni, friends in government, and others who share an interest in the University and its future help carry forward the work that Jefferson began nearly 200 years ago. What was true then is true now: The exertions are temporary, the benefits eternal.
John T. Casteen III