The Academic Council in session. Peter Feaver says faculty input helps keep university priorities in line with academic interests.
One of the ways university faculty have influence on the key directions of university spending is through the University Priorities Committee (UPC). Chaired by Peter Feaver, professor of political science and public policy, the committee advises the president to help the budget reflect faculty priorities.
The 11-faculty member committee meets regularly with university administrators and reviews all significant financial data, from the returns on investment through DUMAC to the budget implications of Duke's need-blind admissions policy.
This month, Feaver reported to the Academic Council that following a strong financial year, Duke's net assets of $9.6 billion are at a record high. At the same time, Feaver noted that financial challenges remain as the university attempts to control costs while still investing in strategic priorities in an uncertain economy.
Below, Feaver discusses his perspective on the university's financial situation and some of the lessons he's learned as a faculty member serving as UPC chair.
Duke Today: For the first time since the downturn, the university is strong enough financially to make major new strategic investments. Without going into where that money could be spent, could you describe the ideal process by which the university carefully considers the trade-offs inherent in these decisions?
Peter Feaver: This is a big question and my answer will not do it justice. Briefly, I think a good process will at least have the following four features: (a) reflects substantial faculty input, (b) wins substantial buy-in, including from stakeholders who don’t end up having their favored priorities chosen for funding, (c) carefully considers the trade-offs across what are almost incommensurable competing values (consider just one illustrative example: we must think through the competing trade-offs of new academic programs vs. repairing obsolete residences halls – which is more mission-critical and which will do more to secure Duke’s position among elite universities?), and (d) identifies creative and ambitious ideas that justify spending the University’s hard-won reserves.
Put another way, a bad process would be one where faculty have no say, where the “losers” believe they never had a chance to make their pitch, where “important-but-boring” university needs go unaddressed, and where an insular committee approves spending proposals up to an arbitrary target, regardless of the merits of the proposals.
DT: Many important university financial benchmarks remain strong – including a record return in the long-term pool of the endowment and solid philanthropic support. From the faculty standpoint, what other indicators should the university be following?
Feaver: Duke also has an enviable record on research funding, but the horizon looks more challenging, especially funding from government sponsors; so we must pay close attention to that area. Duke has made an important policy decision on financial aid, one that proved particularly challenging to honor during the financial crisis; the outlook there seems to be improving, but we need to watch it closely.
In response to the economic crisis, Duke made a number of reforms and overall became much more efficient; as the financial pressure eases up, we want to make sure budgets are growing for reasons that can be well-justified in terms of Duke’s core mission, and that we are not inadvertently slipping back into less efficient ways of meeting that mission.
DT: One of the issues UPC has looked at is the economics of research. It's not widely known that even when "fully" funded by grants, the research operation carries costs for the university. As you continue your study of this, what are the factors you'll be looking at?
Feaver: This is one area where Duke has made some important efficiency and economizing reforms. That process continues and we hope that Duke will continue to find more ways to squeeze additional research productivity out of every new research dollar. Another major priority is exploring whether Duke faculty are maximizing opportunities to generate revenues from research (as opposed to merely maximizing revenues for research).
DT: On the committee, you're presented with a variety of university financial data. What was your learning curve in understanding that data and how did that learning happen?
Feaver: I confess when I started on the committee I did not realize how little I really knew about this crucial aspect of the business. I had the usual academic self-confidence – since I knew how to do research and teach in my area, I thought I knew most of what one needs to know to run a university.
Even after several years on the committee, I am still struck by how I learn lots of new things in every session. The modern university is a remarkably complex institution, and in the normal course of things most of the faculty are insulated from the financial aspects. I have learned a great deal from this committee assignment, and perhaps the most important thing I have learned is how much more there still is for me to learn.
DT: Could you name one or two takeaways about how the university works that you've learned as UPC chair?
Feaver: I have had two big takeaways. First, I have been impressed with the caliber of the topmost Duke leaders – the ones that most faculty could identify in a police lineup like the President (Brodhead), Provost (Lange, now Kornbluth), and Executive Vice-President (Trask). I have not always agreed with every decision they have taken, but I have been impressed with their creativity, commitment, and acumen. And I give them credit for being open to faculty input and critique; they do not stonewall us when we ask tough questions and they have been remarkably candid about discussing challenges.
Second, the Duke administrators just a level down from them (and then going down multiple levels further) have really impressed me – the folks running the Finance operation, the folks handling the money aspects of the academic/medical areas, the folks managing Duke’s endowment, the folks setting HR policy, and all of the other backroom operations of the university. I consider them to be Duke’s “secret sauce.” I had no appreciation for what they did or how well they did it until I served on UPC.
Peter Feaver, right, with Bruce Jentleson on a panel discussing American grand strategy following the 2012 election. Photo:Duke University Photography
DT: On a lighter note, what is the difference, if any, between preparing for a briefing of the president of the United States and a briefing of the faculty?
Feaver: Well, on the one hand, when I have briefed the U.S. President, it has usually been on topics on which I felt fairly expert. Briefing the faculty on university finances takes me well beyond my comfort zone.
On the other hand, when you work at the White House you know you serve at the pleasure of the President – as the Chief of Staff put it to me, “when the pleasure is gone, so are you.” Academic tenure provides a bit more sense of security and so I was not worried too much about my peers or President Brodhead losing the pleasure after my presentation.