Search words Duke University Richard Brodhead Anil Potti
✔✔ FC here.
Just 16 months after the chair of the Trustees warned Duke was in "dire financial strait," President Brodhead has sent an extraordinary e-mail to all "alumni, parents and friends" declaring "the university’s financial health is again strong."
Brodhead congratulated himself for "internal discipline" that held down spending, and said "recovering financial markets" have boosted the endowment.
He offered no numbers whatsoever. He did not even refer readers to the special website set up to keep them informed about the financial crisis, which is sadly out of date.
Nor did Brodhead reconcile his claim that finances are "strong" with the planning for substantial cuts in the number of faculty in the Arts and Sciences, starting with the next budget on July 1. The hope is that enough faculty will resign or retire, but lay-offs cannot be ruled out.
Brodhead did not also say if in addition to being "strong," we'd have another budget gap in the new fiscal year starting July 1. This year's budget has $72 million in red ink, covered by a special withdrawal from the endowment.
The special $72 million is only part of the story, too, because trustees doctored the formula for regular withdrawals from the endowment and are now taking far more than the formula previously allowed. Obviously without this secret tinkering, the $72 million would have soared.
All this is at the peril of future generations, which will inherit far less of their fair share of current endowment.
✔ ✔ The e-mail, dressed up as a New Year's greeting for a "particularly positive start," even though it arrived on the 21st of January, listed several achievements, but is curious in ignoring Duke Medicine / Duke Health. And needless to say the Anil Potti scandal.
Brodhead urged alumni to return to Duke, listing reasons to come to Durham including some surprising restaurants and a resurgent downtown. He did not include Duke Medicine / Duke Health, which have given the city its nickname "City of Medicine."
The only appearance of Duke Medicine / Health comes when Brodhead reports on undergraduates who won Rhodes and Marshall Scholarships, mentioning Nick Altemose's research in the genome center.
Similarly there is no mention of Kunshan, China, his signature initiative which FC has previously reported is in serious trouble. Another pet project, DukeEngage, was also omitted.
✔ If there has been an uptick in the endowment, it's not been because of new contributions.
The only major gifts that have been the subject of news releases are $17.2 million for pediatrics left by a doctor who happened to make an early investment in Food Lion supermarkets , and a $5 million pledge from a law school dropout.
Traditionally Duke has refused to issue interim reports during the fiscal year on the value of its endowment. Most of the university's funds are invested in fancy deals like private equity or hedge funds. There is no ready market for these investments and their value is only a highly malleable estimate.
The Brodhead administration, however, has repeatedly released selective statistics to bolster itself.
Brodhead signed the e-mail "Dick Brodhead," reserving "Uncle Dick" for communications with students.
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