Harvard University Reports $283 Million Surplus Despite Pandemic

Harvard University has ended the fiscal year 2021 with an operating surplus of $283 million compared to the fiscal year 2020, which ended with a $10 million deficit.

“Our positive results are due to generous contributions and a disciplined focus on financial management,” the University’s Annual Financial Report reads.

However, the report points out that in fiscal 2021, the total operating revenue decreased 2 percent or $124 million to $5.2 billion.

As of June 30, 2021, the university’s endowment reached $53.2 billion, an increase of 27 percent ($11.3 billion) from $41.9 billion last year, Erudera.com reports.

According to the financial report, Harvard Management Company registered a 33.6 percent investment return on the endowment for the fiscal year 2021, an increase from 7.3 percent compared to a year earlier.

In an interview with the Harvard Gazette, the Vice President for Finance Thomas Hollister said that revenues declined in the fiscal year 2021 for the second year in a row since the Great Depression, adding that the university has also spent about $83 million on COVID-19 testing, isolation, quarantine measures, lab equipment and more.

“Yet these losses and additional expenses were largely offset thanks to cost-cutting measures on such things as travel, capital projects, supplies, equipment, food, consultants, energy, and maintenance and repairs,” Hollister said.

The report includes the message from the CEO of Harvard Management Company, Narv Narvekar, which stresses that the endowment also distributed over $2 billion towards the university’s operating budget, still representing more than one-third of the annual income.

“Fiscal year 2021 was an extraordinary year. Public and private markets both continued their strong performance, which allowed the endowment to not only increase its distribution to the university, but also continue to grow during this critical time when pandemic-related financial pressures challenge all of higher education,” Narvekar wrote.

Meanwhile, University Treasurer Paul J. Finnegan ’75 and Chief Financial Officer Thomas J. Hollister said that the endowment is sometimes misinterpreted as a checkbook for free spending, adding that it is not how it works or how it was intended by donor gifts creating the endowment.

 “We are gratified that this year’s return results will provide a lift to operations in the next few years but remain aware that history teaches that capital markets give and take away,” they wrote.

Similarly, Yale University, which is considered the second wealthiest college in the United States, has seen a 40 percent increase, with its endowment soaring to $42.3 billion during the 2021 fiscal year.