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Harvard Ended Fiscal Year 2022 with $406 Million Budget Surplus as Revenues Exceeded Pre-Pandemic Levels

Massachusetts Hall is home to the Harvard University president's office.
Massachusetts Hall is home to the Harvard University president's office. By Julian J. Giordano
By Eric Yan, Crimson Staff Writer

UPDATED: October 13, 2022, at 4:56 p.m.

Harvard ended fiscal year 2022 with a $406 million budget surplus, its largest in at least the last two decades, as revenues rose above pre-pandemic levels following two consecutive years of decline.

The University brought in $5.8 billion in revenue over the last fiscal year — up 11 percent from fiscal year 2021. The rise was driven in part by rebounds in revenue streams that suffered during the pandemic, such as tuition and room and board. More enrolled students were on Harvard’s campus last year than at any point in school history due to the return of undergraduates who deferred enrollment during the pandemic.

Expenses also rose by 9 percent, an increase that was muted by staff shortages and supply chain challenges that prevented the school from spending more.

The figures were released by Harvard on Thursday in the University’s Annual Financial Report, which offers a rare glimpse into Harvard’s finances and investment strategy each October.

“The difficulty in hiring people and underlying supply-chain issues were common problems across the country this past year,” Harvard Vice President for Finance Thomas J. Hollister and Treasurer Paul J. Finnegan wrote in a note included in the report. “The combination of the temporary boost in revenues along with temporarily suppressed spending drove a significant portion of the $406 million surplus.”

Consistent with previous years, Harvard’s largest revenue source was its own endowment, which distributed $2.1 billion toward the University’s operating expenses, accounting for about 36 percent of total revenue. The distributions represented 4.2 percent of the endowment’s market value.

Endowment distributions made up a majority of the revenue at three Harvard schools — the Radcliffe Institute for Advanced Study, the Harvard Divinity School, and the Faculty of Arts and Sciences.

The schools least reliant on the endowment in fiscal year 2022 were the Harvard Business School, the School of Public Health, and the Graduate School of Education, which all received roughly 20 percent of their revenue from the endowment.

Harvard increased spending on financial aid by $70 million during the past fiscal year. In March, Harvard College expanded its financial aid program to allow students from families with annual incomes below $75,000 to attend for free — an increase from the previous $65,000 threshold — starting from the Class of 2026.

Cash gifts to the endowment totalled $584 million in fiscal year 2022 — up from $465 million in fiscal year 2021. Current use gifts totalled $505 million, down from $541 million in the previous year.

The Harvard Management Company reported a 1.8 percent loss on its investments during the past fiscal year, its first year of negative returns since 2016. Despite the losses, Hollister and Finnegan wrote in the report that the University’s financial condition “remains very strong” due to “ample levels of liquidity, comparatively low levels of debt, and ready access to borrowings as needed.”

Hollister and Finnegan characterized the negative endowment returns as a “very good result given the significant declines in both the equity and bond markets in the past year,” but added that the University “remains cautious” in its administration of endowment funds.

Harvard President Lawrence S. Bacow wrote in the report that Havard remains prepared for potential financial headwinds.

“Though we find ourselves in a better public health situation today, there remains instability in the global economy and markets, which will continue to influence the University’s financial resources,” he wrote. “Fortunately, prudent planning and sound management have put us in a strong financial position that, along with the generous support of alums and friends, enables us to fulfill our mission.”

—Staff writer Eric Yan can be reached at Follow him on Twitter @ericyan0.

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