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Harvard Business School Administrators Forecast $22 Million Deficit for FY20

The Harvard Business School, located across the Charles River, is positioned directly opposite the College campus.
The Harvard Business School, located across the Charles River, is positioned directly opposite the College campus. By Daniel J. Kwon
By Haemaru Chung and Michelle G. Kurilla, Crimson Staff Writers

Harvard Business School Dean Nitin Nohria and Executive Dean for Administration Angela Q. Crispi announced in an email last Monday that unforeseen coronavirus-induced economic complications have disrupted the school’s economic model.

They wrote in the email that the COVID-19 pandemic and ensuing recession severely impacted many of the Business School’s revenue sources. According to the email, the decision to freeze Executive Education programs, a decrease in alumni donations, falling case sales, and potential endowment distribution decline have all contributed to a major loss of revenue for HBS.

In total, Nohria and Crispi wrote that they expect “a decrease in revenues during FY20 of nearly $115M, changing our initial forecast of a $43M surplus to a projected deficit of $22M.”

Last week, University President Lawrence S. Bacow announced Harvard would instate several salary cuts affecting top administrators as well as a University-wide hiring and salary freeze.

At the Business School, Nohria and Crispi noted that compensation for faculty and exempt staff will be held flat next year. They wrote that they looked carefully at planned capital projects and cut the school's budget by more than 75 percent.

“We will ask faculty members to find efficiencies in their research budgets,” they wrote. “We will be looking across expense categories at the School to see what might be postponed, reduced, or halted entirely.”

Nohria and Crispi wrote that while the future remains uncertain the Business School’s “longstanding processes of forecasting and planning, plus our playbook from the 2008 recession” provide insight into the what steps they will need to take to ensure both the immediate and long-term well-being of the school.

Per the email, Business School administrators were still awaiting department-level Q3 re-forecasts as of last Monday. However, Nohria and Crispi noted they expect to see savings in utilities as a result of a nearly emptied campus. They also wrote that they will explore “every opportunity to realize breakeven” though it may not be possible this late into the year.

“While deficits for HBS are rare, if we do have one, we are fortunate to have healthy reserves from which we can draw in this time of need,” they wrote. “However, this is not a sustainable strategy.”

Guided by “a handful of core principles,” Nohria and Crispi wrote they will invest in vital programs and activities, ensure employment and benefits for Business School employees for as long as possible, and sustain teaching and research as well as the Business School at large.

To close their note, they provided an email address and wrote that they welcome any suggestions to help the Business School operate more efficiently.

“While these steps are not easy, we know that our community has the ingenuity and creativity to operate effectively—to do more with less—in a constrained environment,” they wrote.

—Staff writer Haemaru Chung can be reached at

—Staff writer Michelle G. Kurilla can be reached at Follow her on Twitter @MichelleKurilla.

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