about the state of our finances? All-source revenue for the SOM in FY03
totals $631.9 million. Income generated from all clinical sources is 33.7%
of all revenue; this pays for physician salaries. The vast majority of
all income, about 85%, is pass-through money. The dollars that I have
some discretion over include the Academic Enrichment Fund (2.2%), Tuition
and Fees (3%), Research Indirect Cost Recovery (9.2%), and a portion of
Endowment and Gifts (11%).
Regarding clinical revenues, the income
generated by physicians to pay physician salaries totals approximately
$213 million. Let me point out some important factors. Physicians in The
Emory Clinic generate 50.2% of all clinical income. An additional 30.7%
comes from Grady Hospital, which includes income from Grady (17.2%) and
from the EMCF (13.5%).
The All-Source Expense Budget, which
totals approximately $636.2 million, is the flip side of the revenue budget.
Our expenditures correlate with our income sources, such as Clinical (33.5%),
House Staff (7%), etc. However,
our expenses exceeded our income by approximately $4.3 million. We had
to draw down on our reserves to make up the difference, which we have
done for several years running. We cannot continue to do this indefinitely,
and we hope to end it this year.
As mentioned previously, the Dean’s
Office has discretion over the Basic Academic Support Budget (Ledger I),
projected to be $108.3 million in FY04. This budget has four main revenue
sources—Tuition and Fees ($19.8 million), Endowment and Gifts ($27.1
million), the Academic Enrichment Fund ($14.1 million), and Research Indirect
Cost Recovery ($45.3 million). Over time, we have experienced a tremendous
increase in the actual dollar amount and the percentage of income from
How will we spend our Ledger I budget
in FY04? The two largest expenditures will be $35.8 million for Academic
Departments, the funds that we allocate to departments, and $42.4 million
for University Overhead, the largest single expense. The other significantly
large portion of the budget will be Commitments and Enhancements ($12.3
million). This portion of the budget provides funds to department Chairs
for faculty start-up packages. These have been given to a number of Chairs
over the past several years, and we now have more than 15 Chair packages
Let me briefly describe our four streams
of income since 1995. Research Indirect Cost Recovery has trended upward
nicely, and a slow increase has occurred in Tuition and Fees. The Academic
Enrichment Fund was flat for a period of time and then decreased. Endowment
and Gifts, which increased nicely for several years, has reached a plateau.
We need to be realistic about what our budgets will be for the next couple
of years. While we anticipate some increase in Research Indirects and
a modest increase in Tuition and Fees (approximately 3% to 4%), we need
a major increase in the Academic Enrichment Fund. We also expect a large
decrease in Endowment and Gifts. Consequently,
we will be forced to manage tight budgets, and there simply is no way
around it for the next couple of years. I wish that were not the case,
but we must be realistic about the financial situation we are facing.
On that note, let me talk about development.
have very high aspirations in the SOM. You are aware of that—they
are your aspirations. We have ambitious plans for our clinical, teaching,
and research enterprises. Once we have met our financial obligations,
we do not have enough money to accomplish our aspirations without philanthropy.
I believe that philanthropy is key to our future. And the future is now.
There is a sense throughout the school,
in fact throughout the university, that the time is right to begin a fundraising
campaign. Potential donors hold the SOM in high regard, and we have compelling
stories to tell. The economy seems to be reviving, and we have a large
number of prospects. We have an excellent Institutional Advancement (IA)
team, led by Mr. Phil Hills. And, very importantly, we are not starting
from ground zero.
Beginning in 2001, there has been
a tremendous upturn in the money we have raised in the form of cash gifts
from a variety of different donors (see Figure 4). We also have increased
the number of individuals working in Institutional Advancement. It is
not a coincidence that both the money and the number of individuals who
helped us raise it increased simultaneously. We have gone up from seven
FTEs in IA to approximately 20 FTEs. The good news is that if one looks
at the direct cost of raising a dollar in the Woodruff Health Sciences
Center, it actually has gone down (from 12.7 cents in 1999 to 5.3 cents
in 2003). These new fundraisers are high quality, they know what they
are doing, and it costs less to raise a dollar over time. This cost probably
will not go down much more, but it is an attractive trend.
In case you are wondering where expendable
SOM donations go, most go to our departments, and a tiny portion goes
to the Dean’s Office for scholarships and general support (see Figure
5). Most of the money we plan to raise will go to departments and will
be targeted. Those of you who oversee department budgets must pay attention
to what that means. It may mean that no large increases in discretionary
money will be available from the Dean’s Office as we go forward.
But you will have increased amounts of money that you can use to move
your programs forward, and you must spend every dollar wisely.
I like raising money. It is
fun, particularly when somebody does give it to you. I want to mention
some basic tenets of fund raising, because the faculty must be heavily
involved in this campaign to move it forward. When one factors out buildings,
donations tend to be given to individuals, not institutions. Money almost
always is given to faculty members who have a cause. Faculty members must
be able to articulate their cause in a compelling fashion and tell potential
donors why their gift will make a difference. An important element in
a successful fund-raising campaign is the ongoing relationship between
the donor and the recipient. It is a rare event, if you ask somebody for
money on the first or second meeting, that you are received warmly. It
almost never happens. So you have to develop ongoing relationships with
Faculty must participate in fund raising
by developing their stories, by helping IA staff identify potential donors,
and by helping the staff present those stories. In some cases, faculty
can take the lead in fund raising. For example, faculty or graduates of
the SOM could organize class-specific endowed scholarship programs, much
like Dr. Bill Eley, in the Office of Admissions, has
done. There are opportunities for individuals who want to take the lead
in fund raising.
The timeline for the Woodruff Health
Sciences Center fund-raising campaign is not yet carved in stone, but
the fund-raising goal will be $600 million to $800 million, depending
on the length of the campaign. So our work is cut out for us, but I am
convinced that we can raise that much money and perhaps even more.
recently, some of you may have seen the cornerstone of the original Emory
School of Medicine building that used to be at Grady. It now sits on the
lawn just outside WHSCAB. We found it next to a dumpster on Fraternity
Row about a year ago. The stone weighs thousands of pounds, and I cannot
imagine how it got to the dumpster site. It comes from our precedent institution,
the Atlanta Medical College, which was founded in 1854. That means we
mark our 150th anniversary in 2004, and we plan to celebrate it. We also
plan to use our anniversary as a focus for fund raising, and I have appointed
a committee chaired by Mr. Hills to recommend ways to celebrate this anniversary.
If you have ideas about how to mark this anniversary, please share them
with Phil or me via e-mail. You will hear more about this celebration
in the coming months.
So that is where we are. Clearly,
we are strong and on the move. But we do face financial challenges if
we are going to fulfill our dreams and emerge as an elite school with
a top 10 research program, as an innovator in medical education with first-rate
facilities, and as a strong clinical enterprise with an outstanding, well-supported,
and diverse faculty. That is what we want to be, and that is what we will
be—a destination institution in every way.
In addition to resources, our goals
and aspirations require something else. They require leadership. Let me
use department Chairs as an example. They are appointed for many reasons,
but one very important one is their ability or potential to lead faculty.
Faculty members are bright, high-energy, high-achieving individuals with
complicated needs and complicated jobs. Most of our Chairs have no experience
in that role when they are first appointed. In order to succeed, they
have to acquire a series of technical skills and become politically savvy
in the microenvironment of their departments and in the macroenvironment
of the school. But most of all, they must inspire loyalty and respect
from the faculty. Loyalty and respect usually derive in part from the
ability to bring resources to the department from the Dean or the hospital
CEO. But they also derive, more importantly, from the personal attributes
of the Chair.
Intelligence, imagination, creativity,
honesty, loyalty, a strong work ethnic, and a sense of humor are important
characteristics for a leader. Outstanding schools have outstanding Chairs
who, in turn, recruit and develop an outstanding faculty. Successful Chairs
are values-oriented, embrace innovative ideas, and have the energy to
implement them. They also tend to be excellent teachers. They make teaching
a priority, and they recognize that their success lies in the success
of others—the faculty. Chairs must always put themselves last in
line at the buffet table of academics. The attributes of successful Chairs
are attributes all of us should acquire and nurture. They are, of course,
the key elements of leadership.
Intelligence, imagination, creativity,
honesty, and loyalty abound in our school. All of you are leaders—of
faculty, residents, postdocs, medical students, doctoral students, or
laboratory, office, or hospital staff. All of us should conduct ourselves
with a view toward leading by example and toward learning more every day
about how to be better, how to do a better job. Try to ask yourself every
evening, “How did I do today?” Then listen to the answer.
Last year, Dr. Michael Johns
took an important step in promoting leadership at Emory by creating the
Woodruff Leadership Academy. He took a diverse group of University and
Emory Healthcare employees, faculty members, administrators, nurses, hospital
staff, and others, and exposed them to an innovative curriculum focused
on the attributes of leadership—especially in the Woodruff Health
Sciences Center. The Academy has proven to be a great success, with many
people wanting to take the course this year. And while only a small fraction
of our faculty and staff will ever get a chance to attend the Academy,
it does indicate how hungry and enthusiastic many people are about developing
their leadership skills. Leadership has an impact on all that we do—whether
it is displaying professionalism at all times when we interact with patients,
medical students, and residents, so that no hidden curriculum is taught,
or whether it is treating each other with respect in our daily interactions.
We should always display leadership. Others, especially students, residents,
junior faculty, and staff, watch us for clues on how to behave. And they
surely form opinions about us based on our behavior.
I would like to end this address with
a quote from Mr. Robert Woodruff, the Atlanta business leader and philanthropist
for whom the Health Sciences Center is named. He said, “Again and
again, we see both individuals and organizations perform only to a small
degree of their potential success or fail entirely, simply because of
their neglect of the human element in business and life. They take people
and their reactions for granted. Yet it is these people and their responses
that make or break them.”
We clearly have our challenges cut
out for us next year. But if we display leadership in all that we do,
we cannot fail. We will succeed.
Thanks a million for another great
Thomas J. Lawley, MD
Dean, School of Medicine