Harvard Posts Operating Loss Amid Pandemic, but Net Assets Still Grow


Harvard University’s operating revenue declined by $138 million, or 3 percent, in the 2020 fiscal year as it recorded a $10 million operating deficit.

The financial results, released in an annual report posted yesterday, are a stark turnaround from 2019, when Harvard posted a surplus of more than $300 million. In addition to the revenue decline, the university reported expenses rising by $180 million, or 3 percent, to $5.4 billion.

Harvard, which has the largest endowment in the country and draws students from around the globe, operates in an entirely different market than do most colleges and universities, which tend to depend much more heavily on tuition, student fees and regional enrollment to make their budgets balance. Harvard’s continued existence is not threatened by annual deficits in the same way some smaller institutions’ might be. In fact, Harvard’s net assets increased in 2020 despite the operating loss, with net assets jumping by $893 million to $50.2 billion thanks to growth in its massive endowment.

The wealthy university’s annual financial report is nonetheless noteworthy in a year in which the coronavirus pandemic forced institutions of higher education across the country to modify course delivery, cut revenue projections and incur increased costs. Harvard cut discretionary spending, froze new hires and raises, eliminated bonuses and overtime work, put in place voluntary salary cuts for leaders, and reduced its capital spending.

The 2020 fiscal year closed at the end of June for Harvard. As a result, the new financial results only include a few months of the pandemic’s effects. The university appears to be facing continuing revenue and expense pressures, as noted by Harvard Magazine.

“Strong fiscal management across the Schools and Units has enabled flexibility, but we at Harvard, along with colleagues at other colleges and universities, have tough decisions ahead of us,” the university’s president, Lawrence S. Bacow, wrote in a letter at the beginning of the annual financial report. “How we manage declining revenue and rising need for investment in excellence amid new and necessary health protocols will, in part, determine our successors’ ability to endure and thrive.”

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