What Duke is Doing

While Duke University is financially stable, we are not immune from the impact of the global economic recession. The University is committed to supporting its faculty, staff and students and protecting its academic programs. The tight financial times have forced the University to identify administrative areas where expenses can be reduced. Duke's approach includes:

  • Identifying cost reductions, savings and efficiencies in all school and administrative budgets;
  • Recognizing that the current downturn may be of sustained duration and that we must look for both one-time and more durable interventions, including broadening our student financial advising and career counseling efforts;
  • Reviewing and potentially delaying proposed capital projects until funding sources are clearly defined; and
  • Seeking resources for our most strategic priorities while continuing to protect our core commitments, including faculty excellence and student financial aid.

Examples

Here are some examples of what Duke is doing to adjust to the financial climate:

Workforce and Administration

  • In FY 2010, there will be no salary increase for University employees making more than $50,000 per year. Employees making $50,000 and below will receive a one-time, $1,000 payment. Salary increases for employees covered by collective bargaining agreements will be governed by existing contracts.
     
  • Duke is curtailing external hiring, eliminating vacant positions, making internal reassignments, and exploring a retirement incentive program for University staff. Faculty hiring will continue, though at a slower pace than in previous years.
     
  • The University is undertaking an intensive process of examining, consolidating and ultimately restructuring support programs and services.
     
  • Filling staff vacancies and hiring contractors and consultants will require justification and approval within schools and units, as well as by the Provost, Executive Vice President or Chancellor for Health Affairs, depending on the unit.
     
  • All units are required to reduce expenses for travel, entertainment, overtime, equipment purchases and other goods and services.
     
  • Duke University introduced a voluntary Staff Retirement Incentive Plan that offers eligible University employees an enhanced pension benefit and earlier access to retiree medical and other benefits. The one-time incentive program is intended to help reduce the number of overall positions at the University through voluntary retirements, reducing compensation expenses and limiting the potential for involuntary layoffs later.

Central Administration

Areas in Central Administration such as Campus Services, Human Resources, Finance, Facilities and the Office of Information Technology are looking at reducing expenses in contract work, freight, electricity, automobile supplies, legal fees and computers and software, among other areas.

  • No new buildings will be initiated until external funds are identified and secured. Planning for certain developing projects, including New Campus, will continue, but the start of construction will be deferred.
     
  • Kemel Dawkins, vice president for Campus Services, said departments will look at several areas, including contract services, to find ways to reduce expenses. Overall energy costs all around campus are an area for potential savings, he said, noting that the power, light, and heating bill for the University is in the millions each year. He said the university will look at ways to control temperature to save on costs. "Everyone can help by thinking about energy wisely," Dawkins said.
     
  • "Our largest single expense is the investment we make in people through compensation and benefits," said Kyle Cavanaugh, vice president for Human Resources. "It accounts for more than half of the annual budget at Duke. As we continue to navigate these unprecedented financial times we remain strongly committed to our people; however, we must consider options for how to better manage this expense going forward."
     
  • Duke's Office of Information Technology (OIT) recently announced a project to convert most of the phone service on campus and in the health system to Voice over Internet Protocol. VoIP sends telephone calls over the existing computer network, which means we will eliminate the need for dedicated phone lines and switching equipment and lower the cost per line. At the end of the two-year conversion process, the university will save an estimated $2.7 million per year compared to current phone costs. Tracy Futhey, Duke's chief information officer and head of OIT says her organization is "in the early stages of identifying 10 to 12 other cost-saving efforts, some with modest savings potential of tens of thousands of dollars, and others that could result in more significant savings."

Academic

  • In November Trinity College of Arts & Sciences Dean George McLendon said he expected  the school's central administration to carry the burden of meeting a 3 percent deficit for each of the next two to three years. McLendon proposed to save $500,000 by temporarily holding unfilled positions open in central administration and another $1 million by postponing some capital projects. Arts & Sciences departments also planned to cut non-personnel budgets by 5 percent.
     
  • At the Nicholas School, Dean Bill Chameides issued instructions requiring staff to get dean's approval before filling vacant staff positions; creating new staff positions; initiating reclassification requests for existing staff positions; and awarding out-of-cycle pay increases to staff. Chameides also told fund managers to reduce their non-salary budgets by 5 percent for the 2009 fiscal year and to prepare budgets with up to 10 percent reductions for the 2010 fiscal year.
     
  • The Fuqua School of Business is examining its financial systems to identify ways to realize savings through improved efficiency. School officials said they hope better access to financial information and improvements to some of its processes for tracking expenses will help enable real-time control of costs across all levels of the school.
     
  • School of Nursing Dean Catherine Gilliss told school faculty and staff that the school will continue its course of growth and expansion, though perhaps at a slower pace. The school is finding savings through slowing down on spending, reducing the amount of money spent for nonessentials, slowing down plans for minor reconfigurations of school facilities and cutting back on unnecessary travel. Gilliss expects the 2010 budget to be balanced despite a decline in investment revenues, but added that the school, which has seen significant growth in both its academic programs and research, will benefit from increased interest in and demand for highly trained nurses. Enrollment expansions are anticipated.
     
  • The School of Law implemented cost savings measures this winter, including sending the school's holiday card by e-mail rather than U.S. Postal Service to save on postage and printing DukeLaw Magazine on lesser-weight paper that costs less.

Student Tuition, Financial Aid and Career Services

  • Undergraduate tuition, fees, room and board will increase by 3.9% for the 2009-10 academic year, one of the smallest tuition increases in recent years. The costs of graduate and professional programs will also rise more slowly than in the past, Ph.D. stipends will see a modest increase, and financial aid for graduate and professional programs will remain strong.
     
  • Duke remains committed to admitting the best undergraduates regardless of their ability to pay and to meeting the full demonstrated financial need for all students. The funds the University invests in undergraduate aid will continue to increase at a significantly greater rate than tuition. Under a financial aid program launched in 2008, families making less than $40,000 a year are not expected to pay tuition or contribute to the costs of room and board and other expenses. Students from families making up to $60,000 do not have to take out student loans. Students from families making $100,000 have reduced loans.
     
  • The current economy presents more than the usual uncertainty for students looking into internship and full-time job opportunities, so the Career Center team continues to:
    • Communicate with employer partners to stay knowledgeable of the rapidly changing economic conditions across industries
    • Work with the many loyal Duke alumni to identify experience/employment opportunities for students and recent graduates
    • Meet individually with students to help clarify goals regarding professional development and gaining experience
    • Begin the exploration/search process as early as their first year
    • Diversify their internship/job search, looking more broadly than previously considered