“Pride and Appreciation and Humility"

Pitt’s 225th Year Became a Period of Remarkable Progress for University

(This is the print version of Chancellor Mark A. Nordenberg’s Annual Report to Pitt’s Board of Trustees, delivered June 28 at The University Club.)

Thank you, Mr. Chairman, and good morning, everyone. Today’s session marks the 20th anniversary of the first Trustee meeting that I attended in any official role—essentially watching respectfully as the Board elected me Interim Provost. For the past 18 years, my participation has been markedly more active. And I am grateful to you for giving me this very special platform from which to discuss the progress that we have been forging at Pitt, as well as the challenges that we have met or likely will face in the future.

As you all know, shortly after the last meeting of this Board, in late February, we concluded most aspects of the formal celebration of the 225th anniversary of Pitt’s founding. I still have childhood memories of the circumstances by which I came to understand that just because my birthday was a big day for me did not mean that it was a day when everything was going to go my way. In the spring of 2012, we received our own stark reminders that the same is true for more extended institutional celebrations.

The early weeks of Pitt’s “big birthday year” brought: the shootings at Western Psychiatric Institute and Clinic; the extended succession of bomb threats, most delivered anonymously through the Internet; and the specter of a second straight year of deep and disproportionate cuts to our state support. Through the quick and courageous actions of the University of Pittsburgh police, the tireless efforts of federal law enforcement, and a combination of our own advocacy and the strong support of legislative allies, we dealt effectively with each of those very different threats—in the process, meeting fundamental stewardship responsibilities by protecting this institutional treasure that has been entrusted to our care.

As our year of celebration unfolded more fully, it also emerged as a period of remarkable progress for our University.

As has become the proud and predictable pattern at Pitt and as I have highlighted in past messages, many faculty members and students earned enviable forms of individual recognition through their receipt of some of the highest academic honors available to anyone.

The year also brought a number of significant institutional advances. These included: our receipt of an extraordinarily positive external assessment of our progress; success in surpassing our historic fundraising goal; the stabilization, at least for a time, of our relationship with the Commonwealth; the acceleration of our move into a stronger and more stable athletic conference; and the extension of our rich tradition of local partnering to more distant locations. Let me comment briefly on each.

The Middle States Assessment. When we entered into the every-10-year review process, we fully expected to be reaccredited. If we had, in effect, lost our license to do business after 225 years, that would have made for a memorable year in the worst possible way. As confident as we were about reaccreditation, though, we could not have expected to receive a report from the evaluation team representing the Middle States Commission on Higher Education that was so extraordinarily positive. In commenting on Pitt’s ascent in the ranks of top research universities, it said this:

“Over the past 15 years, the University of Pittsburgh’s reputation as a world class research university has been advancing steadily. By any measure, this reputational advance reflects reality. From the undergraduate education it provides to the research it produces to the external awards and honors its faculty and students earn, the University can be proud of where it stands. . .”

In commenting on the reasons for this rise, the report stated, “An important lodestar for the University of Pittsburgh has been an unwavering commitment to excellence.”

Exceeding Our $2 Billion Campaign Goal. It now seems hard to believe, but we launched our capital campaign in the wake of expert assessments that Pitt was not positioned to raise any significant amount of money. But this Board was determined to prove those experts wrong. We set a first goal of $500 million, and when we reached that, you said, “Let’s go for $1 billion.” Then, when we got to $1 billion, you said, “Let’s double it again.” Now that we have passed $2 billion, I hope we all agree that the time for doubling is over.

For most of us, a number like $2 billion is just about impossible to comprehend. However, it is even harder to imagine all of the good that will come from the support those dollars will provide to the people and the programs of Pitt—including, in some cases, students and faculty not yet born and programs not yet imagined.

Obviously, principal credit for this success belongs to the more than 188,000 donors who contributed to the campaign —sometimes in extraordinarily generous amounts. Great credit also is due to the tireless volunteers and dedicated professionals who made raising money for Pitt one of their highest priorities. And in a broader sense, everyone who in any way helped make our University a more worthy recipient of philanthropic support played an important role.

Stabilizing State Relations. Two years ago, even though we knew that the state was facing serious fiscal challenges, most of us were shocked by a budget proposal recommending that our general appropriation be cut by 50 percent and that our academic medical support be completely eliminated. We launched an aggressive advocacy effort that played a major role in blunting those proposals. The state budget ultimately enacted cut our general appropriation by 19 percent and our academic medical support by 50 percent, for an overall reduction of about 21 percent.

Compared to the cuts that might have been inflicted, that was a victory, but that “win” took our state funding all the way back to 1995 levels, in absolute dollars unadjusted for inflation. That, predictably, led to further campus cuts, including implementation of our Voluntary Early Retirement Program, which led 352 seasoned employees to leave their jobs early.

A year ago, we faced more of the same—proposed cuts that essentially would have spread the reductions first proposed over two years. Leadership was provided by this Board—in literally rising to take a stand against further cuts at our February 2012 meeting, and with individual Trustees playing critical roles in Harrisburg. Our efforts—driven by advocacy, joined by strong legislative allies, and aided by a slight improvement in state revenues—were successful, with no additional cuts being imposed.

However, we faced yet another challenge when the Governor’s Commission on Post-Secondary Education was created. I believed that such a group could make positive contributions to the strength of the overall system of higher education in Pennsylvania. Others, though, saw this mainly as an opportunity to eliminate public higher education as we know it by reclaiming dollars now supporting public colleges and universities and distributing them through a voucher system.

Though pushed hard, the Commission did not move in that direction. Instead, it concluded that a priority should be given to “ensuring the health and vitality of our public institutions,” which “play a critical role in sustaining the overall infrastructure that a leading educational system demands and providing lower price alternatives for all citizens of the Commonwealth.”

Moving to the Atlantic Coast Conference. Pitt enjoyed many memorable moments as a member of the Big East Conference. But given the “changing landscape” for intercollegiate athletics, the Big East no longer provided the stability, revenues, or upside potential needed to sustain, much less elevate, our athletic program.

Particularly after its members entered into an agreement assigning their media rights to the conference earlier this year, the ACC will provide the stability that we sought. It also will formally link us to a group of strong institutions further committed to partnering in academics. And its East Coast footprint should enhance the recruiting of students, the placement of graduates, and the growth of even stronger relations with our alumni. During this past year, we did secure an early release from the Big East and will celebrate our first day as a member of the ACC in three days, on Monday, July 1.

Extending Our Commitment to Effective Partnering. Largely because Jerry Cohon soon will be leaving his Carnegie Mellon presidency, the partnership between CMU and Pitt has received much well-deserved attention in recent weeks. That partnership is unique in the world of higher education and is grounded in a pair of related beliefs: that the combined academic strengths of Pitt and CMU are surpassed in only one other American neighborhood—Cambridge, Mass., the home to both Harvard and MIT; and that effective partnering between Pitt and CMU not only can elevate both universities but can make our region stronger. That has proven to be the case, and I need to publicly say that President Cohon, in particular, has been a wonderful partner.

However, it is important to note that Pitt’s strong record in partnering extends beyond all of the good that has come from our CMU relationship. Here at home, we also have unique relationships with UPMC and the Pittsburgh Steelers.

The strength and scope of our partnership with the Steelers should be evident to anyone who attends football games at Heinz Field or who has visited the Duratz football complex on the South Side. The benefits of this association take many forms: We play in a modern stadium without having made big capital investments in its construction; the finances of this public facility benefit from the fact that it is used on Saturdays as well as Sundays; and we are visibly linked with one of the best-run and most-admired sports franchises in the world.

With those self-evident facts, you might expect that many other institutions would have done the same thing. But other examples of such partnerships are very limited, and none has come close to being as successful as ours. That, of course, is a tribute to the Rooney family, but it also is another sign of a distinctive Pitt ability to collaborate.

Our relationship with UPMC is the most critical to our mission and has benefited both institutions, as well as our home region. To state the obvious, that partnership has helped propel UPMC into a position of global leadership as one of the largest and most-respected health care providers in the world. At the same time, that partnership has helped fuel Pitt’s rapid rise within the ranks of the world’s top research universities, with widely admired strengths in biomedical research.

The Pitt/UPMC partnership has helped transform the Pittsburgh economy in ways that led Presidents George W. Bush and Barack Obama, who agreed on little else, to showcase this city as an inspiring example of 21st-century rebirth. Speaking more generally, our partnership has driven Pittsburgh’s reputation as a world-class center of pioneering research and the highest-quality health care.

One sometimes overlooked dimension of the Pitt/UPMC partnership is the international work that we have done together, particularly in connection with the transplant hospital that is managed by UPMC in Sicily. That venture is more than a decade old and has been a success in every sense. Now, it has progressed to a new stage—with a government-supported research tower also being constructed in Sicily and with many of the European scientists who will work in that facility already here, launching their projects in Pitt labs.

This past year, our international ventures took a big step forward when the Swanson School of Engineering—in an effort led by a group that included Minking Chyu, chair of our Department of Mechanical Engineering and Materials Science; Jerry Holder, the U.S. Steel Dean of the Swanson School; and Provost Beeson—entered into an agreement with Sichuan University to create the Sichuan University Pittsburgh Institute. Sichuan University, the premier university in Western China, is constructing a 100,000-square-foot facility to house the Institute.

Pitt is one of just five American universities to have entered into such a large-scale education and research partnership with a Chinese university. The others are Carnegie Mellon, Duke, Michigan, and NYU—so we are in very good company, both here and in China.

Our Sichuan partnership will add to a portfolio of China projects, including the Biomedical Research Training Program recently forged under the leadership of Senior Vice Chancellor Arthur Levine and Associate Senior Vice Chancellor Jeremy Berg. This is a first-of-its-kind initiative with Tsinghua University, which is home to 155 research institutes and often is called the MIT of China. This program will bring 45 budding physician-scientists per year from Tsinghua to Pitt for two years of study as visiting research scholars. While here, they will pursue research projects in Pitt labs, while also observing the delivery of care at UPMC.

If we had accomplished nothing more than these five things—receiving such an extraordinarily positive reaccreditation report; exceeding our historic fundraising goal; stabilizing our relationship with the Commonwealth; securing a more promising future in our new athletic conference; and extending our global reach in distinctive ways—our 225th year would have been a year to remember. But of course, as I already have noted, we did much more than that.

As a matter of custom, we always have avoided getting too caught up in single-year measures. Instead, we have taken a longer view, consistent with an institutional history now spanning two full centuries and parts of two others.

Our basic goal has been to ensure that the work we now are doing produces one of the best chapters in the University’s long history. How well positioned we are to support that claim is best assessed by looking at the entire 18 years that we have been working together to advance that goal. Here, then, are some of the key measures of growth, strength, and progress that characterize “our” chapter of Pitt’s history.

Dramatic Growth in Student Body Size and Strength. One key “market measure” is our growing power to attract ever-larger numbers of highly qualified students. From 1995 to the current academic year, Universitywide FTE (full-time equivalent) enrollment grew from 27,002 to 32,781, an increase of more than 21 percent. Applications for admission to the undergraduate programs here in Pittsburgh, our single largest cluster of programs, have increased three-and-one-half times—from their 1995 total of 7,825 to 27,626 for next fall’s entering class.

Though these numbers probably will change somewhat by September, the average SAT score of students who have paid a deposit is 185 points higher than the average of enrolled students in 1995, and 53 percent of those who have deposited ranked in the top 10 percent of their high school graduating classes, compared to 19 percent in 1995.

Enviable Levels of Student Achievement. It is important to note that Pitt not only has become a magnet for highly talented applicants, but has also become a leading producer of high-performing students. Since 1995, for example, Pitt undergraduates have claimed four Rhodes Scholarships, five Truman Scholarships, six Marshall Scholarships, seven Udall Scholarships, and an astounding 41 Goldwater Scholarships. We also are among the nation’s leading producers of Fulbright Scholars, Boren Scholars, Whitaker International Fellows, National Science Foundation Fellows, Critical Language Scholars, and Humanity in Action Scholars.

Of course, as I have said on past occasions, these very public forms of recognition annually are accompanied by tens of thousands of more personal triumphs, as our students use the power of higher education to build the platforms from which they will pursue their own life dreams. One telling measure of that form of impact is that Pitt has awarded more than 137,000 degrees since 1995.

Enriching the Student Experience. Pitt also has been a leader in developing programs designed to enhance our students’ overall growth and to prepare them to build lives of achievement and impact. Among many noteworthy efforts, some that stand out are: our launch of the

PittArts program, designed to expose our students to the cultural richness of the greater Pittsburgh region; our pioneering partnership with the Port Authority, giving students fare-free access to public transportation and giving practical meaning to our belief that “the city is our campus”; and the design of the Outside the Classroom Curriculum, providing a structure for students to pursue important learning experiences not tied to classroom activities.          

Nurturing Citizenship, Character, and Responsibility. One memorable aspect of our opening convocation comes when all freshmen rise as a group and recite the Pitt Promise, a commitment to civility. Our students go on to regularly distinguish themselves through their civic commitments. For example, our 2012 “Pitt Make A Difference Day” involved 3,000 students who traveled to 60 neighborhoods to work on 88 different civic improvement projects.

The president of our Graduate and Professional Student Government served as the first chair of the Sociable City Initiative, which has included the development of standards for party-hosting responsibility as part of its personal accountability initiative. And in 1995, the highest Pitt priority for both City government and our neighbors was the construction of more on-campus housing. Since then, we added roughly 2,500 residence hall beds to this campus.

Supporting High Levels of Faculty Accomplishment and Impact. The record of individual honors bestowed upon members of our faculty is unbelievably impressive. In fact, having recently reviewed what is just a partial list of honors received since 1995, I would not even know how to summarize it.

Let me offer, then, a single telling example from the opening months of our 225th anniversary year, when three of our faculty members were elected to the National Academy of Sciences. As I reported at the time, only 10 universities had three or more faculty members elected to the Academy. Stanford led the way with six; Berkeley and Princeton had four; and Columbia, Johns Hopkins, MIT, Penn, UC San Diego, the University of Washington, and Pitt each had three. That is an amazing achievement, but it is just one example.

Senior faculty members also have been elected to such other prestigious groups as the Institute of Medicine, the American Academy of Arts and Sciences, the American Association for the Advancement of Science, the American Society for Clinical Investigation, the National Academy of Education, and the American Academy of Nursing. And they have claimed some of the country’s most prestigious awards, including the National Medal of Science, the Lasker-DeBakey Clinical Medical Research Award, the MacArthur Foundation’s “genius award,” the Charles S. Mott Prize in cancer research, and the Andrew Mellon Foundation Distinguished Achievement Award for exemplary contributions to humanistic studies. And these are just examples from a list that could go on and on.

Equally important is the fact that more junior faculty members continue to claim national awards for their exceptional potential. These include Presidential and National Science Foundation Early Career Awards, Howard Hughes Medical Institute Physician-Scientist Early Career Awards, Pew Foundation Early Career Awards, and Beckman Young Investigator Awards.

Reaching the Top Ranks in Research Strength. The strength of our research program can best be measured comparatively. We rank fifth among all American universities in terms of the federal science and engineering research and development support attracted by members of our faculty—trailing only Johns Hopkins, Washington, Michigan, and Penn and just ahead of UC San Diego, Stanford, Columbia, Wisconsin, and Duke, the fine universities in the second five of this impressive top 10. And to climb into our top-five position from a ranking of 24th, which is where we were in 1995, we had to pass each of these fine universities: Arizona, Berkeley, Colorado, Columbia, Cornell, Duke, Harvard, Minnesota, MIT, North Carolina, Penn State, Stanford, UCLA, UC San Diego, UC San Francisco, USC, Washington University in St. Louis, Wisconsin, and Yale. What makes that accomplishment so amazing is that these are exceptionally strong, highly competitive universities, and, even as we passed them, they all were doing their best to get better.

Building an Inviting Campus Environment Supportive of Living, Learning, and Working. It takes high-quality space to support high-quality programs. And, of course, when a university enrolls more students or attracts more grants, it will need more space. From 1995 to 2013, and including projects under way but not yet completed, the University has invested more than $1 billion to add 3.6 million additional gross square feet of space. Those projects have helped to dramatically enhance all five of our campuses and also have been a very important source of construction jobs in each of our five home communities. It also is important to note that we managed those projects—and now manage that 3.6 million square feet of additional space—with a facilities staff that is just about the same size as it was in 1995.

Certain other signature initiatives from this same period did not involve the addition of facilities space. To give two key examples, we cleaned and repaired the exterior of the Cathedral of Learning, which symbolizes Pitt around the world and is a familiar beacon for people in this community. And we took the lead on behalf of what then was called “The Oakland Investors Group” in reclaiming the ugly surface parking lot that sat between Hillman Library, the Carnegie Public Library, the Frick Fine Arts Building, and the Cathedral of Learning and created Schenley Plaza. That park, now managed by the Pittsburgh Parks Conservancy, has changed the look and tone of Oakland—both as a place to relax and as an attractive site for events.

Fostering Higher Levels of Athletic Success. In 1995-96, Pitt’s football team posted a record of 2-9; our men’s basketball team posted a record of 10-17; and our women’s basketball team posted a record of 6-24. Since then, football has a winning record overall and has participated in 11 bowl games; men’s basketball has one of the top winning percentages in the country and played in 11 straight NCAA tournaments; and women’s basketball advanced to three NCAA tournaments, including two Sweet 16 berths. Though more work lies ahead, with strong coaching, the move to the Atlantic Coast Conference, and top-flight facilities, we look forward to even better days. Meanwhile, our student-athletes continue to be students, with 350 of them honored this spring for achieving a grade-point average of at least 3.0.

Engaging With the Community. Over the course of the past 18 years, Pitt has become a model of community engagement—making our expertise available to neighborhoods and public agencies in ways that are consistent with our teaching and research missions, while contributing to the social, intellectual, and economic development of the region. As one sign of our impact, we were the top-ranked public university in the country in the most recent edition of the Saviors of Our Cities: Survey of Best College and University Civic Partnerships. The University also has been the recipient, for three consecutive years, of the Good Neighbor Award from the United Way. And most recently, Pitt was recognized by President Obama on the 2013 National Honor Roll for extraordinary and exemplary community service contributions.

Invigorating and Transforming the Regional Economy. Though the region’s more diverse 21st-century economy also has other strengths, the “eds and meds”—with Pitt and UPMC sitting at their heart—have been a powerful force for revitalization and transformation. The education and health services supersector now is the largest source of employment in the Pittsburgh metropolitan area. It is the only sector that has added jobs every year since 1995 and now is responsible for more than one out of every five local jobs.

University research has been a key source of economic growth. Since 1995, Pitt alone has attracted more than $9 billion of sponsored research support into this region. That research, combined with Carnegie Mellon’s, also has provided the foundation for such future-oriented, technology-based economic development initiatives as the Pittsburgh Digital Greenhouse, the Pittsburgh Life Sciences Greenhouse, the Pittsburgh Robotics Foundry, and the Technology Collaborative. And we created our own Office of Technology Management, which now generally is regarded as one of the country’s best.

Attracting Ever-Higher Levels of Philanthropic Support. In 1995, Pitt attracted less than $40 million in private philanthropy. The University now has raised more than $100 million per year for eight straight years, including the years of the Great Recession. Through generous gifts received as part of its $2 billion capital campaign, the University was able to create more than 1,500 new endowments, including more than 600 for student scholarships and fellowships and nearly 150 for new faculty chairs and professorships.

General Measures of Momentum. As would be expected with those levels of fundraising success, the University’s endowment has grown by 6.5 times, from $463 million in 1995 to $2.99 billion at the end of the last quarter. Other clear measures of growing strength—tied to our successes in education and research, as well as to sound management—include the following:

the University’s employee base has risen from 9,671 in 1995 to 13,372 in 2013—an increase of more than 38 percent and more than 3,700 employees—and that is after the implementation of our Voluntary Early Retirement Program; and

the University’s net assets have almost quadrupled, from $997 million in 1995 to slightly less than $3.8 billion at the end of the last quarter.

We just received a long-term rating upgrade, from AA/stable to AA/positive, from Standard & Poor’s. That is worthy of particular note given the recently issued negative assessments regarding the general outlook for higher education. In its report, the agency stated:

“The positive outlook reflects our view of the university’s fundamental institutional credit strengths, including a strong and proactive management team, which has generated consistently solid financial operations of a full-accrual basis despite a constrained state funding environment and successful completion of a capital facilities plan with limited additional debt planned.”

Other positive factors cited in the report included: “stable enrollment, strong student demand, and strong student quality”; “good revenue diversity from student tuition and fees, research grants, gifts, endowment income, and state operating appropriations (which accounted for only 6.6 percent of the fiscal 2012 budget)”; and “impressive fundraising success, as the university recently exceeded it $2.0 billion comprehensive campaign goal.”

Building a Culture of Appreciation. In assessing Pitt’s future, the Middle States team explicitly stated: “The greatest challenge to the University of Pittsburgh—no matter how talented its leadership or how robust its system of assessment—is external.” That report then focused on the fact that our state support, in its words, “has been diminishing at an alarming rate.” The report from Standard & Poor’s also noted that same “constrained state funding environment” and went on to express concerns about the risks presented by “cuts in federal funding for research and the implementation of sequestration” but concluded that “if cuts are gradual, we do not expect a significant credit impact.” In the words of the report:

“Management is aggressively pursuing strategies to reduce financial and operating risk throughout the institution and is implementing various revenue enhancement and cost-management measures to proactively position the university for growth while also taking specific measures to mitigate the risk associated with federal contracts and the potential for state funding or tuition constraints.”

With an overarching commitment to quality and strong management—in both academic and administrative areas—we have been able to deal effectively with the challenges that have been coming our way. From my vantage point, the most significant change at Pitt over the past 18 or 20 years is that in the mid-1990s, our problems were largely of our own making.

That no longer is true. Having committed to quality; having accepted the need to make difficult decisions; and having made advancing the good of the entire University and not just some part of it our goal, we have positioned ourselves to contend with challenges that once would have done us grievous harm. And, though I wish I could offer a more upbeat assessment, we need to be prepared to deal with more of the same in the years ahead.

One thing that does make our future more promising than it might have been is that we all are in it together. Though there are many things to like about our Middle States report, my favorite passage is this one:

“[T]here is a justified (though given our cynical times, still remarkable) sense of pride . . . in every sector of the University, from faculty (even faculty in units that have not been favored with major investments of resources) to students (many of whom have done both undergraduate and graduate studies at the University because, as many have stated, of their “love” for the school). There is an ethos of appreciation which evokes humility in those of us who come to observe it.”

Those three words—“pride” and “appreciation” and “humility”—sit at the heart of my feelings about our 226-year-old version of Pitt. It would be hard for anyone who has contributed not to feel proud of our success in elevating Pitt into the top ranks of the country’s public research universities. Participating in the work also has left me with a deep sense of appreciation for the human qualities that regularly have been on display—in faculty, students, staff, alumni—and, of course, Trustees—as we have traveled to this point. And I remain humbled by the fact that you have permitted me to play a central role in this effort.

The sobering impact of the tragic shootings at WPIC and the unsettling effect of the bomb-threat siege and the anxieties produced by proposals for deep budget cuts launched our 225th birthday year on something other than a joyous note. But 16 months later, there is plenty to celebrate at Pitt—just as there have been reasons to celebrate for the last 18 years. And it has been my honor to travel that triumphant path with you.