|
|
|
|
Feeling Blue
Editors:
Re: “True Blue,” January-February 2001: As an intern at
Duke in the Office of University Development for only two summers,
with no other alumni background or institutional attachment, I identified
strongly with this story. The writing approach was clever, as it investigated
the pride in an institution in which one doesn’t necessarily
have a direct connection from a psychological standpoint. I look forward
to reading more of the same.
Thank you.
Shanna Ackerman , Columbia University ’01 (via e-mail) |
Overendowed?
Editors:
I received the latest issue of Duke Magazine and enjoyed reading it.
Having written you several times over the years about story selection,
I must say this edition seemed to be right on. But your excellent
story “Reshaping the Future” [January-February 2001] repeats
a statistic that I have challenged The Chronicle for using: that the
endowment per student at Duke is $160,000.
The financial statements of Duke University, available from the office
of [Executive Vice President] Tallman Trask III, put the value of
endowment funds held by the university at $2.754 billion as of June
30, 2000. This report also states there were 6,202 undergraduates
and 4,969 graduate and professional students —rounded out to
11,200. Do the division. That’s $245,900. Not $160,000 per student.
And that’s only part of the story:
A) The university is now receiving a sustained $33 million a year
from The Duke Endowment, reflecting money automatically accruing to
the university plus special appropriations. Were it not for the anomaly
of Mr. Duke’s putting Endowment money into a separate entity,
the principal that yields this return would be in the university’s
coffers, and indeed under modern accounting practice, that portion
that accrues automatically to the university is reflected as an asset
on its books though not as endowment. The bottom line is that I consider
it fair, projecting from the university’s own 5 percent spending
rate, to value The Duke Endowment’s holdings at $660 million;
so add $58,900 endowment-per-student because of the unique nature
of The Duke Endowment.
B) Your comparison to the $1 million per student at Princeton is interesting:
1) Princeton does not have a medical center, with a cash-cow private
medical diagnostic clinic ($69 million last year). When Duke Hospital
deficits are corrected, and they will be, this will be sterling, like
a living endowment.
2) Princeton keeps its pension fund in balance, while Duke has salted
$366 million extra in its fund, beyond projected liabilities, as of
June 30, 2000. That’s an extra $366 million—above and beyond
liabilities. Princeton adds minimally to its pension fund each year;
Duke curiously is making annual contributions in excess of $35 million.
Any corporation with $366 million extra in its pension fund would
not only stop annual contributions but would also raid the principal.
In Duke’s case, this could be added to endowment.
All these factors distort the comparison with Princeton.
Ed Rickards ’63, J.D. ’66 (via e-mail)
John Burness, senior vice president for public affairs and government
relations, replies:
The endowment-per-student statistic cited in the article was based
on the university’s endowment at June 30, 1999, $1.069 billion.
Using an enrollment of 11,200, the calculated endowment per student
is approximately $160,000 per student, as reported. The comparable
audited endowment figure for fiscal year 2000 was issued in October,
too late to be used in the article. Support from The Duke Endowment
is an important source of annual income and is reflected in our total
university assets. However, the underlying assets are owned by The
Duke Endowment and cannot be reported under appropriate accounting
rules as permanent endowment on the university’s financial statements.
The income stream also fluctuates from year to year depending on The
Endowment’s investment gains and funding priorities.
Income from the private diagnostic clinic helps support the research
and educational mission of the School of Medicine but does not directly
benefit other segments of the university. Nevertheless, when compared
to universities with academic medical centers, Duke’s endowment
per student lags other institutions: Stanford ($460,000), Yale ($660,000),
and Washington University ($365,000). It is worth pointing out that
the endowment “owned” by Duke’s Trinity College of
Arts and Sciences at June 30, 2000, $565 million, is substantially
less than the endowments at a number of liberal-arts colleges with
much smaller enrollments, including Williams, Swarthmore, Pomona,
and Grinnell.
Pension fund assets have grown in recent years as a result of unusually
strong gains in the capital markets. Because such gains cannot be
sustained indefinitely, Duke’s trustees and the trustees of Duke
Management Company, which manages those funds, have established policies
designed to safeguard our pension assets against possible future market
downturns. The university is studying its pension fund balances and
long-term employee obligations with help from an outside consultant.
In the interim, the university has suspended new additions to the
fund, pending the results of this analysis. Dramatic downturns in
the stock market have provided useful evidence of the importance of
taking a conservative approach to managing the university’s assets. |
‘Stealing’ Music?
Editors:
In the story “A Music Free-For-All” [November-December 2000],
I was disturbed by the cavalier attitude of the Duke students quoted
regarding their use of Napster.
Illegally downloading music hurts companies and creative artists beyond
the RIAA and the major record labels. The creative process necessitates
the work of musicians, singers, engineers, producers, lyricists, staff,
and innumerable support companies, all of which collaborate to bring
the finished product to market. Only a small portion of the people
involved in the entertainment industry make the sums of money of,
say, Eminem, Metallica, Clive Davis, or Tommy Mottola, while the vast
majority earn a more modest living.
In the story, Duke student “Brian” boasted of having 200
music files in his computer. That figure extrapolated to the rest
of Duke’s 6,500 undergraduate students totals 1.3 million downloads—at
just one college campus
—where artists, record companies, and others aren’t compensated.
Napster users who think this is some kind of consumer revolution,
instead of theft on a large scale, are either remarkably naïve
or completely disingenuous.
In fact, consumers frustrated by the high prices of compact discs
have a variety of legal alternatives. The most obvious, and most pow-erful,
is simply to choose not to purchase the product. Consumers could buy
the music on a cheaper format (i.e., audiocassettes) or opt for the
music of another, less expensive, band. Each is an honest and fair-minded
approach that would affect market demand and, ultimately, market-driven
prices. Stealing music through software like Napster should not be
an alternative, particularly for students at a university like Duke,
where enlightenment and integrity are supposed to be held in high
regard.
Perhaps one day these same Duke students, who so blatantly flout the
copyrights of others, will dedicate years of effort to write a novel,
music for a CD, a screenplay, or code for new computer software. Perhaps
the student’s livelihood will depend on his or her creative work
being brought to market to be purchased by consumers, aided by thousands
of hours of work and dollars of support from other individuals and
companies. And when it’s time for that student to reap the just
rewards a company like Napster will facilitate the theft of thousands—even
millions—of copies of the work so that the student, and the other
entities involved, aren’t compensated. Perhaps then these students
will change their perspective.
Alfred C. Martino ’86 (via e-mail)
Editors:
I’m a staff music writer at the Nashville daily, the Gannett-owned
Tennessean, and I spend half my time on music business and intellectual
property issues like Napster. So, I just wanted to say that your feature
on digital music was the best synopsis of the issue I’ve ever
read.
Thanks for the legal insights. They’re helping me in my coverage.
Craig Havighurst ’91 (via e-mail) |
| |
|
