FAS Unrestricted Reserves Decline Amid Record Fundraising Year

The Faculty of Arts and Sciences is seeing a steady decline in unrestricted reserves even as restricted reserves climb, FAS Chief Financial Officer Julie A. Joncas shared at a Tuesday faculty meeting.

Unrestricted funds — which are not tied to particular purposes — fell from $207 million in fiscal year 2023 to $112 million in fiscal year 2026, Joncas reported, leaving the school with a shrinking cushion of flexible funding.

“It’s really, really critical that we reverse this trend,” she said at the meeting, adding that unrestricted reserves played an important role in shoring up research funding amid last year’s federal funding cuts.

The goal, she added, is to maintain unrestrictive reserves equivalent to roughly 10 percent of annual operating expenses, or $175 million.

Last year, administrators revealed that the school was facing a $365 million structural deficit and sought to strengthen its financial position through several budget-cutting measures, including a large-scale staff restructuring.

At Tuesday’s meeting, Joncas reported that the school has since moved to steadier ground, recording a $31 million surplus — reversing last year’s $8 million deficit — on roughly $1.8 billion in revenue.

After accounting for reinstated federal funding, the FAS’s revenue declined by $18 million, a drop attributed to lower sponsored research revenue. Cost-cutting measures, including hiring freezes, helped reduce FAS expenses by $36 million in fiscal year 2026.

Meanwhile, restricted funds grew from $896 million in fiscal year 2025 to $926 million in fiscal year 2026. Unrestricted funds fell by $39 million over the same period.

The FAS also recorded a $220 million gap between the cash generated by operations and the roughly $400 million it estimates it should spend annually to maintain its facilities. The school’s facilities debt rose to $1.466 billion, with $123 million in debt service payments last fiscal year.

Dean of FAS Development Michael J. Faber also broke down fundraising trends at Tuesday’s meeting. The FAS and the School of Engineering and Applied Sciences reported a 71 percent increase in fundraising between fiscal year 2025 and fiscal year 2026, raising a record $792 million by the end of fiscal year 2026.

Faber attributed the increase in part to Hoekstra’s discussions with donors about the FAS’ faculty and students, alongside Harvard’s forceful responses to the Trump administration last year.

“We have an incredible group of alumni, parents, supporters, who are rallying around Harvard, proud to support our dedication to academic freedom, international students, and the restoration of our federal funding,” Faber said.

Faber also noted that the school’s administrative restructuring has strengthened donor support.

“Donors can see the hard decisions made around workforce planning,” he said.

Those changes gave them “confidence that the FAS is going to be a strong steward of their gifts and their financial resources moving forward,” he added.

Faber also warned that gifts under $10,000, which account for 95 percent of yearly unrestricted donations, have declined over the past 10 to 20 years. The trend in smaller donations was industrywide, he said.

Without those smaller donors, Faber said, “we’re not going to be able to raise the larger gifts later down the line.”

Current-use gifts for the FAS in fiscal year 2026 totaled $165 million, up from $158 million in fiscal year 2025.

Though Harvard’s federal funding has since been restored, the FAS saw a $46 million drop in federal research revenue in fiscal year 2026.

The volatility of federal funding made unrestricted funds particularly important, Joncas argued.

“The threats are not over,” she said.

—Staff writer Abigail S. Gerstein can be reached at [email protected] and on Signal at abbysg.97. Follow her on X @abbysgerstein.

—Staff writer Amann S. Mahajan can be reached at [email protected] and on Signal at amannsm.38. Follow her on X @amannmahajan.