According to a new report from the Office of Public Affairs, the University's total annual economic impact on the city and county of Durham is an estimated $2.6 billion.
The study used government and other data and models from FY2002-03 to determine the financial impact, taking into account local spending by the University, its students and visitors. In all, the report reads, spending came to $1.3 billion--a figure that must be doubled to estimate the University's total economic impact because each dollar spent initiates at least one more round of spending before it leaves the local economy.
Economists from Duke and North Carolina State University, who advised the study, said the $2.6 billion estimate may even be too low, as a conservative multiplier was employed in calculations.
"Duke University takes seriously the degree to which the University's and the city's fortunes are intertwined," President Nan Keohane said in a statement. "This report provides further evidence that major research universities such as Duke are economic engines whose activities dramatically benefit their hometowns and regions."
Thomas White, president of the Greater Durham Chamber of Commerce, said Duke was the "quintessential town-gown partner."
"In my job, I couldn't ask for a more wonderful institutional partner," he said. "My job is to promote the community as a great place to work, raise a family and live, and in all respects Duke is a huge draw."
White noted that the new report itself could help attract new businesses to the area. "It catalogs and captures the kind of information that we can then package and send to investors that are representing corporate or non-profit interests," he said.
The University's largest contribution by far was in wages and benefits. As the largest employer in Durham County, Duke paid $732 million in wages and benefits to 18,343 Durham residents, or 15 percent of the employed persons who reside in Durham County. The mean salary was $63,046 for employees paid monthly and $36,571 for employees paid hourly.
The report also notes that a national study using U.S. Commerce Department data conservatively suggests that Duke's $365 million in research funding in FY2002-03 created more than 13,300 jobs in the area.
"The University has achieved a level of expertise and talent, such that a lot of [National Institutes of Health] grants are coming to Duke," White said. "When there is a lot of research being done, it is a harbinger of subsequent investment."
The University also spent a good deal of money on purchases from Durham County firms in FY2002-03--$171 million in direct impact, or about $366 million in total impact. Some 632 individual non-government Durham vendors sold at least $10,000 in goods and services to Duke, according to the report. In addition, the University leased about a third of the office space in Durham, paying about $12 million in rent and generating about $1.5 million in property taxes payable to Durham.
A number of special purchasing arrangements accounted for part of the purchasing sum. For example, the Minority/Women-Owned Business Program directed about $3.4 million in purchases to minority-owned and women-owned vendors in Durham. Construction also comprised a significant portion of the University's purchases in Durham. Duke spent $188 million for construction--including wages paid to workers, purchase of equipment and fees for architects and other professional services--in FY2002-03.
Donations accounted for $51 million of the $1.3 billion in direct impact, with Duke University Health System providing $48 million worth of uncompensated medical care for Durham residents. The other $3 million was donated through the University and its community members to local nonprofit organizations. The Self-Help Community Development Corporation, for example, received $4 million in an affordable housing loan.
"What President Keohane and Duke's leadership have done in the pockets of poverty is an extraordinary statement," White said. "The qualitative impacts the University has in areas around campus are just important as the big numbers--35,000 total staff, for example--and it speaks volumes about Duke's social commitment."
Student and visitor spending accounted for a good portion of Duke's total economic impact as well. The University's 11,700 students spent an estimated $89.5 million off campus. The Durham Convention and Visitors Bureau estimated that campus visitors spend about $227 million in the community.
Reyn Bowman, president and CEO of the Durham Convention and Visitors Bureau, said the $227 million included expenditures both by visitors who had come to town because of Duke and by those who had gone to Duke because they were in town. He noted that many visitors come to Durham because of the Duke University Medical Center, although many visit campus to see the Chapel, sports teams, gardens, art museum or primate center.
Duke visitors' biggest expenditures were for transportation, Bowman said, followed by food, lodging, shopping and entertainment.
Duke also contributed to Durham's economy by providing $14 million in municipal-type services, such as police and road maintenance, that the city otherwise would have had to provide. Soon, the University will be paying an additional $300,000 per year for five new police officers to help with Duke University Police Department's extended patrols near East Campus.
In addition to the $1.5 million in property taxes based on Duke leases, the University paid direct taxes and fees in FY2002-03 totaling $5.4 million. This money went toward expenditures such as property taxes, water and sewer fees, landfill tipping fees and motor vehicle taxes.
The report is the third such report the University has issued. The first report, conducted in 1997, estimated the University's economic impact at $1.9 billion. The second report, issued in 2001, estimated the economic impact at $2.23 billion.
"It's really valuable that the University takes the time to gather this data," Bowman said. "We all have a tendency to take each other for granted, and it's crucial to keep focused on what the mutual benefits are, both from the community to the University and from the University to the community. They're fundamentally intertwined."
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