Our heritage and our aspirations impel us to build new centers of excellence.

More than anyone of his extraordinary generation, Thomas Jefferson recognized the power of knowledge to shape the world around him. At every stage of his life, he pursued knowledge with insatiable fervor: through close reading in many subjects, through correspondence with the leading thinkers of his time, and through his own careful observations of natural and human phenomena.We are the heirs of his enthusiasm for learning and discovery.

Mr. Jefferson was also a proponent of what he called the "useful sciences," a foundational principle that continues to guide our work and our planning. It underlies the pursuit of our Virginia 2020 goals, propelling new centers of excellence in the fine and performing arts, expansion of our international activities, fulfillment of our obligation to serve the people of the Commonwealth and the nation, and efforts to join the leading edge of science and engineering. This report documents recent progress in these and many other areas. In the arts, construction crews are renovating Fayerweather Hall for the art history program, the first step in our plan for the Arts Grounds. Our expanded foreign-study programs are giving students a broader perspective on the world beyond U.S. borders.

Our outreach activities touch many lives, from schoolchildren to lifelong learners. Our recent investment of $60 million in the research enterprise will take us to the forefront in areas of inquiry in which we are prepared to make significant and sustained contributions.

Mr. Jefferson�s notion of the "useful sciences" also informs current efforts to improve the curriculum. Edwin Alderman, the progressive reformer who became the University�s first president exactly a century ago, once observed that "a changing society means a changing curriculum."We are looking anew at what we require of students so that each will leave here with a firm grasp of scientific processes, strong quantitative and communication skills, and the capacity for critical reasoning.We must also prepare students in all disciplines to confront the ethical issues that will inevitably arise in their personal and professional lives.

As we strive to offer a more rigorous and rewarding student experience, we are assuring affordability for all who can benefit from that experience. AccessUVA, our groundbreaking financial-aid program, will reduce or even eliminate debt burdens that can prevent undergraduates from achieving their educational goals. We have mounted a nationwide effort to raise awareness of this initiative.

We are making the University a more accessible and welcoming environment in other ways. The Commission on Diversity and Equity, which I appointed in the spring of 2003, has completed its work and has laid out a plan for creating a safe and nurturing atmosphere for all students, staff, and faculty, regardless of race, ethnicity, gender, or sexual orientation. Chaired by Michael Smith, the Sorensen Professor of Political and Social Thought, and Angela Davis, associate dean of students, the commission has challenged us to adopt diversity as a way of life in the same way we embrace honor. Our response to acts of intolerance must be as strong as our response to acts of lying, cheating, and stealing.

The rewards of a diverse community could be seen in a fascinating exhibition in Alderman Library last fall. Titled "Breaking and Making Tradition:Women at the University of Virginia," it traced the influence of women who cleared paths for our current students, of whom more than half are female. The exhibition was one of the last to be displayed at Alderman before we moved our rare books and manuscripts into the new facility housing the Mary and David Harrison Institute for American History, Literature, and Culture and the Albert and Shirley Small Special Collections Library. Although primarily a resource for scholars, this is very much a public building, a place where visitors can see treasures from our collections and share in the intellectual life of the University.

Made possible by a combination of state funds and gifts from exceptionally generous benefactors, the new library speaks to our commitment to educate many broadly and deeply. It also represents the public-private partnership with which we now finance core operations. After three years of reductions, our funding from Richmond will rise in 2004�2005 and 2005- 2006. Last fall we were able to report to our faculty and staff the approval of long-awaited state salary increases, to which we have added non-state resources to help retain the members of our faculty who in their teaching and research advance the mission of the University and raise its stature among academic peers.

Today our funding from philanthropic sources is roughly equal to the state tax dollars we receive. Recognizing the Commonwealth�s other obligations, we have come to terms with this new reality. Along with Virginia Tech and the College of William and Mary, we are proposing legislation known as the Commonwealth Chartered Universities and Colleges initiative. In granting us more autonomy and efficiency, this measure would enable the University to function with limited increases in state appropriations and greater reliance on other revenue sources, including tuition and ongoing support from alumni and friends.

In a related development, we have entered the early stages of a fund-raising campaign that promises to change the University in profound and lasting ways. Through intensive planning, both University-wide and in each of our schools and programs, we have assessed our needs.We also have recruited a campaign executive committee of distinguished alumni and friends who will guide this effort to secure our present strengths and to build programs and facilities equal to our aspirations.

As we lay the groundwork for the University�s future eminence, we will hold fast to Mr. Jefferson�s guiding vision.We will continue to teach and produce useful knowledge, and we will instill in our students the traits of civility, responsibility, ethical conduct, tolerance, and self-reliance that characterize our graduates. As Mr. Jefferson knew well when he created this institution, our nation�s freedom and prosperity will depend on their service and their leadership.

John T. Casteen III
President