Say It With Figures

     In 1947, a man who later was to become my friend, colleague and co- author, published a book that, during his lifetime, went through six editions and was translated into six languages. My friend's name was Hans Zeisel, and his book's title was "Say It With Figures"-a play on the florists' slogan "Say it with flowers."

     The book offered methodological tools-in such areas as reason analysis, panels, and cross-tabulation-for studying human affairs. In the introduction, Paul Lazarsfeld wrote: "The very complexity of social events requires a language of quantity."

     By almost any measure, a modern university is a complex organization. In today's report on the state of Stanford, I will try to explore some of that complexity with the language of quantity. I shall try to "say it with figures"-some familiar, some surprising; many a cause for pride, all a catalyst for continued effort.

     This is not to say that I believe the quality of a university ultimately can be expressed in quantitative terms or captured in ratings and rankings. I have addressed many aspects of the university that cannot be captured quantitatively in various speeches, beginning with my Inaugural Address in 1992. But, for today, I hope you will bear with me if I focus on quantifiable features of our complex institution.

     The three core purposes of Stanford are teaching, learning and research. The pursuit of these purposes depends upon at least four important, and interrelated, categories of assets: people, financial resources, plant, and reputation. Let us explore each of these categories, and permit me to begin with the economic base, as it puts in relief some of the more familiar features.

FINANCIAL RESOURCES

     It is tempting to look at the university's $1.4 billion budget-$2.1 billion, if one counts hospital and clinical services-and its $3.6 billion endowment and conclude, as some do, that Stanford is rich. Indeed, Stanford is a thriving university, and has been blessed by the remarkable generosity and loyalty of alumni and friends, from Jane and Leland Stanford to Bill Hewlett and David Packard.

     On the surface, one might wonder how we could ask for more. However, let us attempt to go beneath the surface by saying it with figures.

     First, let us consider the wide range of activities Stanford pursues with that budget and endowment.

     Among the private universities with which we most compete, Stanford aspires to excellences across the widest spectrum of endeavor-arts, humanities and social sciences; sciences and engineering; college, graduate and professional teaching, learning, and research.

     This is not just a subjective statement on our part. The National Research Council conducts the nation's most extensive study of Ph.D. programs, and examines only programs it deems to be of legitimate quality. The number of programs that meet the NRC threshold thus can be considered a fair measure of comprehensiveness. No university in the nation even attempts to offer all 43 programs that the NRC studies, but Stanford comes remarkably close: We were ranked in 41 of the 43 categories. The spectrum of Stanford's offerings truly is wide.

     And Stanford does this with an endowment that, while clearly large, is less than half that of Harvard, and only three-quarters that of Yale or Princeton. Compared to our competitors, we have done more with less.

     Our second set of figures says how much less. Stanford actually derives only 12 percent of its annual revenue from endowment income. It is not much of an exaggeration to state that, every year, we must generate anew 88 percent of what we need to do our work. With the budget required to support our range of activities, that means that we must muster more than $1.2 billion in "soft" money every year.

     Indeed, endowment income ranks only fourth among the main sources of funds required to operate the university, behind government grants and contracts, about 40 percent of operating revenues in recent years; tuition and fees, about 23 percent; and private gifts, grants and contracts, 13 percent.

     What does this figure-only 12 percent of our operating revenue from endowment-say? Have we not always been able to find the other 88 percent every year?

     Yes, largely due to our success in research funding. But this success carries with it exposure. As every mutual fund prospectus warns, past performance is no guarantee of future results-an adage applicable to research funding and, I hasten to add, to the income generated by endowment, as well.

     We all know that budget-cutting in Washington makes it difficult to expect increased research funding. Both Democratic and Republican budget plans would reduce federal non-defense R&D funding by between 14 and 18 percent in real dollars between 1996 and 2002. If government continues on the path of decreased investments in the nation's future and in the institutions that make innovation possible, we could be very vulnerable.

     We know equally well that our second-largest source of revenue-tuition- faces very real constraints. I fear for middle-class and even upper- middle-class families who do not make enough to pay the full bill but make too much to qualify for sufficient financial aid. In response to that, Stanford has tried to restrain tuition increases. Keep in mind, however, that even undergraduates who pay full tuition still contribute only about 60 percent of the cost of providing their own education.

     The trends in our two largest sources of revenue compel us to become ever more self-reliant. That is easy, some might say-just reach into that large endowment. But that would be both unwise and, in some ways, impossible. To spend endowment is to eat our seed corn, and the day would quickly come when we could no longer harvest a crop, not even 12 percent of our annual budget. A university's endowment is not a checking account, but rather a trust fund; we, the current generation, are trustees for all future Stanford generations. Common sense ­ and, in many cases, the law ­ does not allow us to spend the endowment's principal. And our duty to the future does not allow us to spend even all of the interest, dividends and capital gains; we must reinvest enough to ensure that the endowment is not eaten away by inflation.

     Stanford is fortunate to be among the American universities best positioned to rise to the challenges of constrained revenue, and to seek greater self-reliance. But we must do so unceasingly, for as fortunate as we are, our financial resources are still surpassed-in some cases by a large margin-by those of institutions with which we most compete for the best faculty and students.

     Remember that Princeton's larger endowment supports an undergraduate student body of only about 4,600, compared to Stanford's 6,500. That is one reason that Princeton covers an amazing 94 percent of its undergraduate financial aid obligation with endowment income. Harvard's endowment allows it to fund more than half its undergraduate aid. Stanford, meanwhile, stands at 39 percent. Those seeking the explanation for the priority I place on The Stanford Fund need look no further. We must find anew every year almost two-thirds of the undergraduate aid that Stanford itself provides, and The Stanford Fund plays a critical role in filling the gap.

     Likewise, our competitors' larger endowments provide a significantly greater percentage of their faculty salaries. At Harvard, endowed chairs provide nearly twice the percentage of faculty salaries as at Stanford ­ 39 percent to 21 percent.

     If we are to maintain our quality, improve our competitiveness, and increase our self-reliance, we must strengthen our ability to fund our students and faculty from endowment. Yes, it is competitiveness that drives our emphasis on The Stanford Fund and other annual giving, and on Stanford Graduate Fellowships and other endowment. But the competition that motivates us is not for magazine ratings, but for the best faculty and students.

     I am pleased to say that we are making progress here. Both our number of donors and the amount they donated reached new highs the past year. And since The Stanford Fund was started in 1993, alumni participation has increased from 24 to 34 percent, and the amount raised for undergraduate education-60 percent of it for scholarships-last year reached $5.2 million.

PLANT

     Stanford's endowment is not limited to its investment portfolio. The building we are gathered in, and every classroom, laboratory, dorm, office, road, water line, steam pipe, tree and acre of land, is a physical endowment equal in importance-and, by the way, about equal in value-to our financial assets.

     It may not have escaped your notice that the campus is experiencing a bit of construction. To some of you, it may seem unending and unprecedented. That impression is half right. By the year 2001, we will have completed a five-year cycle of about double our normal level of construction activity and will return to our lower-though by-no-means low-customary level. So, unending at its current pace? No. But unprecedented? Yes.

     As measured by expenditures, even adjusted for inflation, we are in the most intense period of construction in the history of Stanford University, including its founding. During the five years 1996-2000, we will spend an estimated $600 million for construction, and that does not include another $100 million for utilities, infrastructure and deferred maintenance.

     But let us go a little deeper. What are those seemingly staggering figures really saying?

     Imagine it is 1891 and you are standing in the middle of the Inner Quad. Around you, are 12 small buildings, essentially one-floor sandstone shells comprising only 50,000 square feet of space. There is not yet a Memorial Church nor the four corners or any of the Outer Quad buildings. These 12 buildings and their connecting arcades were built for $537,000. Adjusted for inflation, that is about 9.5 million in 1996 dollars.

     Now, return to 1996. Today, we would put 50,000 square feet of classroom space in a single building. However, let us say that we wish to build a similar Inner Quad-splitting that square footage into 12 small buildings, but employing modern construction materials, methods and requirements. The construction today would cost $20 million.

     Those figures-$9.5 million and $20 million-say a great deal about the costs of operating a modern university. Just as a modern automobile is vastly more complex than a Model T, so is a modern university building vastly more complex than its antecedents. Remember that the 1891 cost of the original Inner Quad did not include the current permit and regulatory requirements; earthquake reinforcement and fire/life safety; modern heating and ventilation; second floors; or even electricity or indoor plumbing, let alone sophisticated computer, video and telecommunications networking. Today, all those items are necessary to our work and drive up the cost of not only new buildings but of renewing our older buildings.

     And it is, in fact, renewal that accounts for a large majority of the construction activity on campus today.

     More than two-thirds of our current five-year construction budget involves the renovation, remodeling or replacement of current space. Only 29 percent is for added space.

     What do these figures say? That Stanford is not engaged in unbridled expansion and thoughtless spending. Rather, it is carefully planned and managed work with a clear purpose: the physical renewal of Stanford University's infrastructure for the future. By the turn of the century, I hope Stanford will have a campus second to none, not only in its beauty, but in its functionality.

     I have said since my inaugural address that the work of the university cannot be done unless it is continuously reconsidered, and supported afresh and jointly by faculty, students, staff, alumni, and friends. Generally, I am speaking of intellectual renewal, but it also is true that the work of the university requires constant reconsideration and renewal of its physical resources. Here, I believe, we are in a strong position relative to our competitors.

     While we can assure you that we are carefully planning the university's renewal, we cannot claim all the credit-or all the blame- for our current scope of construction, In large part, it is the result of a combination of calamity, opportunity and responsibility.

     The calamity, of course, was the 1989 Loma Prieta earthquake. It forced upon us $158 million of restoration and seismic upgrade work. The good news is that when that work is completed, we literally will have rebuilt the oldest buildings on campus from the inside out, making them much safer and more useful. As we have done seismic retrofitting, we also have renovated buildings for programmatic needs, including adding the networking vital to new technologies.

     The opportunity has come in the form of many generous gifts: from Hewlett and Packard, Gates and Allen, and others to fulfill Stanford's long-held dream of a Science and Engineering Quad; from the Cantors for the Stanford Museum renovation; from anonymous donors for the Center for Clinical Sciences Research; from Charles Schwab for the business school's Residential Center; from the Bing, Braun, Lane and Pigott families for the Restoration Fund; and many more.

     The responsibility comes in exercising good stewardship-maintaining the physical endowment that has been handed down to us and, then, renewing it as needed to meet the changing nature of teaching, learning and research.

     When asked for my "vision for Stanford," I have responded that I subscribe to Wally Sterling's philosophy: Simply find the best possible faculty and students, give them all possible support, and then see what results. Renewing our physical resources is one of the key ways in which-having found the best possible faculty and students-we can draw them here and give them all possible support.

PEOPLE

     Sterling's adage leads naturally into the third major category of Stanford's resources: our people. Faculty and staff; students, alumni, and friends truly are the source of what results from Stanford's work. And what have we seen result? Among other things, extraordinary faculty productivity.

     It is very difficult to establish exact comparisons with other universities, given their different disciplinary mixes and arrangements for sponsored research. However, regardless of how the data are cut, Stanford's faculty wins one of the highest per capita levels of sponsored projects in the nation. And, separated out, that of our relatively small Medical School is astounding.

     As I mentioned earlier, government grants and contracts provide about 40 percent of Stanford's total revenue, one of the reasons we have been able to accomplish so much with only 12 percent of that revenue coming from endowment.

     Stanford faculty members work both hard and creatively. This is equally true in the arts, humanities and social sciences. In these fields, however, quantitative measures are even more elusive and questionable. I have always shuddered at the thought of measuring faculty quality in terms of pages published per capita.

     One possible measure of faculty quality across the board is the number of academy memberships: Stanford trails only Caltech in memberships in the National Academy of Sciences, National Academy of Engineering, and the Institute of Medicine, normalized for faculty size. In addition, 178 members of our current and emeritus faculty have been elected to the American Academy of Arts and Sciences.

     The Stanford faculty is equally productive and excellent in teaching, especially if we keep in mind that in a research intensive university much teaching is done on a one-on-one basis. That is why, in my proposal for Stanford Introductory Studies, I recognized the need to add up to 20 new faculty billets-not to be the "designated teachers" but to help free time for all our busy faculty, particularly the most senior, to teach in small group settings.

     Before the start of the fall quarter, I taught such a course on Constitutionalism in the Sophomore College-10 students, two hours a day, every day-and it was the most wonderful teaching experience of my career. That sentiment is shared by the Provost, the two Vice Provosts, the two former Faculty Senate chairs and the other distinguished senior faculty members who taught in this year's Sophomore College. And we anticipate the increase of this form of productive interaction between student and faculty as we move toward Stanford Introductory Studies and a small-group learning experience for every freshman.

     One quantifiable measure of our graduate teaching productivity is this: In 1995, Stanford led the nation's private universities in the production of Ph.D.'s with 583.

     Given that we do not have the largest graduate student population, and that so many of our graduate students are pursuing professional degrees, this is a truly remarkable figure. And should someone rush to ask, "But isn't the nation producing too many Ph.D.'s?" I would answer: "Not too many excellent Ph.D.'s."

     Stanford's Ph.D.'s, and its graduate students as a whole, truly are excellent. I mentioned earlier the National Research Council study of doctoral programs and faculty, in which 41 of our programs were examined. I will add here that all 41 of them received high ratings. That is a measure not just of programs and faculty but also of our graduate students, for excellent programs and faculty require, reflect and attract excellent graduate students.

     Figures to represent the quality of our undergraduate students required a tougher choice. Certainly the test scores and class rank of our entering classes reflect excellence. But because we do not admit by numbers alone, Dean Montoya would need to read from application essays and lists of student accomplishments and experiences to fill out that picture. To say it with figures, I have chosen the group of Stanford applicants who present the highest academic credentials.

     In reading applications each year, our admissions officers assign an academic rating to the applicants. These are based on objective criteria, and to earn a rating of "Academic 1," an applicant must meet such benchmarks as a perfect GPA-recalculated by us to a common standard-and combined SAT scores of at least 1450 out of 1600. The academic ratings were adjusted to account for the recentering of SATs, and the Dean of Admission expresses confidence in this as a basis for comparing admitted classes of the past decade.

     Thus, while not the only measure, the percentage of Academic 1s in an incoming Stanford class is one indicator of the academic strength at the top of that class. And that strength is clearly growing.

     As you can see, the percentage of Academic 1s in this fall's entering class is higher than last year's, higher than 1990's, and more than 11 percentage points higher than a decade ago.

     This fall, we also reached a new high by attracting 86 President's Scholars-the 200 applicants we single out each year for their intellectual vitality and readiness to engage in research.

     Both these indicators say that Stanford is increasingly finding and enrolling the academically strongest students.

     Of course, we also seek students of other valuable qualities, including leadership, and the achievements of our alumni offer abundant qualitative evidence that we succeed. Stanford graduates are leaders in all areas of life, from higher education (where they include the president of Yale and the president emeritus of Harvard), to government (where the incumbent U.S. secretaries of state and defense, and many elected officials at all levels hold Stanford degrees) to the United States Supreme Court (where we claim four of the nine justices) to the media, writing and the arts (where our alumni include such distinguished figures as Ted Koppel of ABC News and U.S. poet laureate Robert Hass). Stanford alumni have earned distinction in research and scholarship, in medicine and science, in business and industry. A new survey by Ken Vosti and Gary Gray of our Medical School faculty, shows that for the 10-year period that ended in 1984, 30 percent of Stanford M.D.-only graduates became full-time academic faculty members. That must be one of the highest such ratios for any medical school.

     Equally important, from volunteer work to entrepreneurship, home life to the life of the mind, Stanford graduates have contributed to the strength and quality of their families, friends and communities. Many, of course, also contribute directly to the quality of their alma mater as dedicated volunteers at many levels, all the way up to the Board of Trustees and the Board of Directors of the Stanford Alumni Association.

     As faculty and students pursue their many excellences, staff are crucial in helping them succeed. Staff members at Stanford fill myriad roles. Even the roughest breakdowns, such as that of the U.S. Department of Education, give a hint of that breadth.

     To refine this further and single out the individual skills, knowledge and dedication of any one group of staff would only slight the many others. So, let me just make a comment about one of the categories on this table.

     I am somewhat bemused by the way many on campus refer to certain categories of staff as the "support staff." At a university, all of us are support staff-secretary or president, lab technician or provost, groundskeeper or dean-because all of us are here for only one reason: to support faculty and students in their work of teaching, learning and research. It is an honorable and a vital role. On behalf of Stanford's faculty and students, let me say again that the hard and effective work of Stanford staff members is fundamental to our academic mission and is greatly appreciated.

     As staff members know better than anyone, though, bureaucracy too often gets in their way and makes the work harder rather than more effective. To help change that, we are making a $60 million investment in administrative information systems. The goal is to automate tasks that should be automated, reduce the need to re-enter data over and over, and integrate systems to provide much more useful information for decision- making. In this way, we will support the staff in supporting the faculty and students. Our goal is to provide improved tools and training, and the opportunity for staff to provide greater value to faculty and students, and achieve greater satisfaction in their work.

REPUTATION

     Finally, let me briefly discuss Stanford's reputational resources. To "say it with figures," I have looked at what are probably the most reliable figures in a notoriously subjective area, those in the National Research Council study. Though these ratings of doctoral programs and faculty are not perfect, they are relatively sound.

     Literally within hours after the NRC released its 740-page report, universities began issuing media alerts, aggregating and comparing results-always, of course, sliced in the way that showed their institution as at or near the top.

     We avoided participating in that exercise, but could not help but note an interesting fact: No matter how others sliced it, Stanford was always one of their co-leaders. For once I shall defer to the insight of our competitors, and conclude that Stanford's reputation is that of one of the nation's finest universities.

     Another measure of reputation came in 1994 from the Institute for Scientific Information's study of citation impact-how many times a paper is cited by other papers. This is a purported measure of the importance and influence of a particular piece of research. Using its database of papers published in ISI-indexed journals from 1981 to 1993, and adjusting for the differences in the sizes of the institutions, it calculated the average number of citations per paper.

     The result was, as the institute's publication ScienceWatch stated: "Stanford ... placed in the top ten in 17 out of 21 rankings-the best showing of any university."

     While "citation impact" remains a somewhat dubious measure, there is no doubt that Stanford's researchers enjoy a superb reputation with their peers.

     I have focused so far on Stanford's reputation for teaching and research, a non-controversial portion of our reputational resources. However, there are, no doubt, those in this audience who would dismiss concern with any other part of Stanford's reputation to be vanity, anti- intellectual, or that most loathsome of abbreviations, "PR."

     However, let me remind you that, just as reality must be the foundation of a strong reputation, reputation has a very strong effect on reality. Is there one among us who doubts that the best students, in choosing where to pursue their graduate studies, examine the NRC results? Did not Stanford's reputation-as much as financial, physical or any other resources-influence all of us in coming here? Does not Stanford's reputation for quality and stewardship contribute to donors' view that Stanford is a wise investment?

     Reputation has become, among the news media and politicians, what journalist James Fallows has called "a snarling contest"-a corrosive game of attack dogs vs. spin doctors. One does not know whether to laugh at the spectacle or cry for society. I fear that sorrow is the more appropriate reaction, for-as sources from the Bible to Shakespeare to Cervantes have agreed-a good name is better than riches. Our nation's founders understood that how the United States and its government were regarded had very real consequences for the country's success, even its survival. Washington viewed one of his most important trusts to be the reputation of the new republic. Reputation is a precious resource, and one Stanford has been fortunate to preserve despite severe threats at several points in its history.

     Stanford's reputation is based on the faculty, students, staff and alumni of the university. It depends upon, and affects, you and your work. As in every other aspect of the work of the university, we must be always scrupulous and accurate in seeking and conveying the truth, and careful in preserving this Stanford resource.

CONCLUSION

     Today, I have attempted to "say it with figures," to explore Stanford's complexity using a language of quantity. Let me conclude with one final figure.

     The institutional complexity of Stanford, in the end, exists to support something very simple: the one-on-one interaction of faculty member and student, of researcher and question, of student and student. By "one- on-one" I do not literally mean only two people. I use "one-on-one" as a metaphor for any small group interaction.

     The quality of that interaction can never be captured quantitatively. It is a function of the quality of the participants and their horizons. Whether horizons are set high or low is, in turn, a function of the culture of a university, of its breadth, its openness, and, most of all, its seriousness of purpose. The university must conceive of learning as an inexhaustible task, as "an unceasing process of inquiry" where both teacher and student have their justification in the common pursuit of knowledge.

     The complexity and expense of that pursuit can only partially be expressed with figures. To the extent that is possible, my figures suggest that the university has done extraordinarily well. Stanford has found the best possible faculty and students, and we strive to give them our best possible support. Together, our faculty, students, staff, alumni, and friends produce great returns for Stanford and from Stanford.

     Yet, the figures also say that we cannot become complacent. We must maintain and increase our quality in those areas where we match our competitors, and increase our self-reliance in those areas, such as endowment support, where we trail. We must continue to do more with the resources we have, and we must build greater resources by reinvesting in our people, our financial assets, our plant and our reputation. And while "saying it with figures" in the case of a university produces only limited insights, we must not lose sight of the figures.

     However, when all of that is said and done, most of what really matters is not measurable. In 1791, Goethe gave a lecture on the need for sociability among artists and scientists. I quote from it:

     The friends of science are frequently by themselves and alone, although the many printed books and the rapid circulation of all knowledge make the lack of sociability go unnoticed by them.

     Much good and vast benefit has come from the freedom of the printing press; but we also derive great benefit-benefit that is simultaneously connected to the greatest satisfaction-from lively and frank associations with educated people. A nod, a word, a warning, encouragement, timely opposition are often capable of changing our lives.

     What Goethe characterized as the "rapid circulation of all knowledge" through the invention of the printing press, is now becoming the instant circulation of knowledge by means of information technology. This development also will produce benefits. But it will not, I hope and trust, replace the lively and frank interaction of educated people, the "sociability" that marks the true university.

     Stanford truly is a true university and jointly we shall keep it that way.