2004 - 2005: Yale University Finance Annual Financial Report

The strategic priorities for the University are bold. Yale aims to advance its programs in science and medicine to the top ranks of the nation’s institutions while continuing to strengthen its world-class position in the arts, humanities, and social sciences. The University is investing in programs and relationships to make Yale a truly global university in both Yale College and its many top-ranked graduate and professional schools, and to spawn enlightened leadership, in all disciplines, all over the world. Yale is extending its preeminence as an undergraduate institution through a curriculum that fosters international experiences and stresses the development of the quantitative and qualitative skills that the 21st century requires. The context within which Yale takes on these challenges is fiercely competitive at every level, and the stakes have never been higher. Yale must bid to hire the best faculty, and the right facilities are crucial to attracting key students as well as faculty. Like other selective schools, Yale supports the financial needs of all students, which, in turn, entails an ever-growing financial commitment. On the revenue side, even though Yale’s endowment continues to have superb performance relative to other universities, returns in general may not be as extraordinary as in the 1990s. In addition, Yale needs actively to manage day-to-day expenses and provide better ongoing maintenance. The operating budget for the 2003–04 year was under pressure due to increased benefit costs, including pensions, rocketing health care costs, and extraordinary energy costs. These are not expenses unique to Yale; indeed, every university, every business, and every household in America is coping with these issues. Yale greets these challenges with enthusiasm and confidence and an imperative to improve the way it does business. No other major university is taking a more sweeping look at how administration can contribute to the academic mission. And no other major university has harnessed a more impressive constellation of talent, technology, and business processes to make it happen. Over the past five years, many initiatives and technological advances have been made to advance administration. Under the leadership of Deputy Provost Stephanie Spangler, ASSET (Administrative Services and Support Enhancement Team) task forces have explored potential savings in areas like travel, printing, procurement, and telecommunications. In December 2003, President Levin was successful in recruiting John Pepper, retired chairman and CEO of Procter and Gamble, as Vice President for Finance and Administration, and this has further galvanized efforts to create another center of excellence at Yale. “Our strategy is to apply the most effective business practices to a great university. In fact, our methodology—including rigorous analysis, benchmarking, the exploration of new ideas, and the focus on best practices—mirrors that of any academic discipline,” Pepper explained.

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