Hockfield Delivers State of the Institute, Discusses Endowment
President Susan J. Hockfield delivered the State of the Institute address in Kresge Auditorium yesterday, highlighting MIT’s continued growth amidst troubled times. Her message was echoed by the other speakers, Provost L. Rafael Reif, Chancellor Phillip L. Clay PhD ’75, and Executive Vice President and Treasurer Theresa M. Stone.
“These are turbulent times,” Hockfield declared, a statement that was repeated several times throughout the forum. “No one can predict where we will be at the end of the week.” Even so, MIT is in “really terrific shape,” she said.
Hockfield then went on to describe the work being done to build a framework that harnesses finances and uses endowments in the best possible way. This includes a ‘rebalancing’ program, which has made it possible for MIT to operate from a balanced budget for the first time in many years. “A balanced budget means we can focus on the future,” Hockfield said. “We cannot rob the future to pay for today.”
Consequently, the Institute has adopted new endowment spending policies to support students and faculty. Hockfield said that she is confident that these new policies will help the Institute prepare for “the rocky times ahead.” MIT’s endowment only saw a 3.2 percent return this year, considerably less than the 8.6 percent return posted by Harvard University.
Hockfield also disclosed that new commitments from alumni had reached a value of $435 million, a 27 percent increase from last year. The ample resources are being used for projects improving Institute facilities, such as the Media Lab extension, the renovation of Vassar Street West, and the new buildings for the Sloan School of Management and the Koch Institute for Integrative Cancer Research.
Hockfield went on to talk about the “tough” year in admissions, due to Harvard, Princeton, and University of Virginia abandoning their early decision programs and making aggressive financial aid announcements. Nonetheless, MIT received a record number of applicants, nearly 13,400, an 8 percent increase from last year. Of the 11.9 percent admitted, two-thirds accepted their offer, the 3rd highest yield in the Institute’s history. About 60 percent of the admitted undergraduates have received financial aid that brings their average annual tuition to about $8,000. According to Hockfield, the tuition does not cover even half the cost of providing a student with an MIT education.
Hockfield also highlighted recent faculty achievements, including two of twenty-five MacArthur fellows, three of sixteen Pioneer awards, and five Howard Hughes Medical Institute awards.
Hockfield also mentioned the MIT Energy Initiative, and the growing awareness of MIT’s contribution to conserving energy. Hockfield said that this shows “how much the world looks to and trusts MIT.”
Hockfield also mentioned that $500 million had been raised for MIT’s 150th birthday celebrations in 2011.
Reif began his speech with the declaration: “This period of time, more than any other in MIT’s history, belongs to MIT.” He then went on to describe the research being carried out in the different schools: The School of Engineering is working to convert body heat and vibrations to energy that can be used to run electronic devices; the School of Sciences is trying to converge life sciences with physical sciences to find new techniques for the detection, treatment and prevention of cancer; the School of Humanities and Social Sciences is coming up with opportunities for global study; the Sloan School of Management has introduced a new Master of Finances Program and is conducting research in sustainable economic development; finally, the School of Architecture and Planning is coming up with projects to overcome human disabilities. He ended on an optimistic note, “MIT’s best years are yet to come.”
Clay discussed the physical improvements brought about to campus, including New Ashdown house that was opened six weeks ago and the Northwest Community, which boasts of 1500 students. The Chancellor said that the Institute is working on Old Ashdown, which is expected to join the campus as a “strong dorm” in two years. Clay said that MIT’s commitment to support students during these challenging economic times is “as strong as ever.”
Stone talked about the energy initiative that is being led by a task force consisting of professors from each of the schools as well as graduate and undergraduate students.
According to Stone, after the steam trap demonstration project carried out on East Campus, half of the academic buildings have been attached with traps leading to annual savings of $360,000. The Institute has also been using heat recovery pipes, which are expected to reduce annual energy costs by $444,000. Stone added that a new energy conservation investment fund is being piloted at the moment.
After a brief question and answer session, the forum dispersed for lunch, during which individual administrators answered a few more questions posed by the audience.
This was the second State of the Institute forum to be held after a three-year hiatus. The most recent forum prior to last year’s was held in 2004, during the tenure of former President Charles M. Vest.