John Harvard's Journal
The Campus, Quieted
If “coronavirus” or “social distancing” becomes the word of the year, Harvard will have had a leg up on the lexicographers.
On February 24, the University announced a $115-million biomedical research partnership with scientists in China to investigate the virus’s biology, diagnostic tools, and development of vaccines and therapies. (See harvardmag.com/sars2fight-20 for an overview of the program, and early research insights from leading Harvard genetics, epidemiology, and vaccine scientists—including unfortunately prescient warnings about the pandemic to come and its frightening potential.)
On March 6, the College announced that Visitas—the annual weekend during which admitted applicants can visit campus before committing to accept their offer of admission—would be canceled; an online Virtual Visitas was scheduled in place of the April 18-20 gathering.
The following Monday, March 9—in light of the University’s prior decision to eliminate gatherings of more than 100 people (venues such as Sanders Theatre and the forum at the Kennedy School’s Institute of Politics were shuttered, and their programming canceled)—the College declared that Housing Day, scheduled for March 12, when first-year students learn their upper-class residential assignments, would be postponed.
And the next morning, President Lawrence S. Bacow informed the community that instruction in residence would be suspended “until further notice.” Students were directed not to return to campus after spring recess, scheduled to begin that Friday afternoon. In the next few days, students scrambled to rearrange their lives, and the institution scrambled to deploy funds for those on financial aid to store or ship belongings home, and to help arrange and pay for travel. Impromptu arrangements were made to house and feed students who could not go home. Community members pitched in. For example, Adams House associate Michael Weishan ’86, executive director of the Franklin Delano Roosevelt Foundation (an evocative name during a grave crisis) reported that an appeal for funds to help students in need yielded $20,000 overnight—promptly disbursed in small grants: $60 for gas so a father could pick up a student, $150 to replace a laptop battery (to be ready for online classes), $90 for airline baggage fees—and money for food for a student without family means.
In rapid succession, Ivy League athletic practices and competitions were ended for the balance of the spring semester (see coverage in this issue here); the Harvard Art Museums closed; Faculty of Arts and Sciences (FAS) staff members were directed to begin a trial of working from home during the recess week, starting March 16; and scholars and their teams were instructed to “ramp-down laboratory research activities by Wednesday, March 18, with the expectation that such a period of suspended lab access will likely last at least six to eight weeks.” Seniors, given a week’s grace period, submitted their theses from home—as PDFs. Professors began learning how to adapt lectures, seminars, and labs to Zoom.
Still, it was sobering on the rainy final March morning before break (Friday the 13th, as it happened) to find Harvard Yard—its turf still winter-brown, not spring-green—punctuated with traffic cones and directional signs for move-out, two months prematurely. Vehicles with out-of-state license plates and “Harvard Parent” decals drove slowly around the perimeter, then stopped at dormitory entrances so families could collect their still-first-year children and their belongings. In his March 12 update to undergraduates, FAS registrar Mike Burke, doing double duty as co-director of Harvard College Emergency Management, had underscored the urgent situation, writing: “[T]he most important thing to be mindful of right now is the need to de-densify our community. The best way we can help fight the spread of this disease is through smart, social distancing, and that is why you should not wait until the last minute to move out if you are able to do so sooner.”
Photograph by Maddie Meyer/Getty Images
There were flashes of resistance, and of humor. A midweek-night visitor to campus found students, presumably seniors, not maintaining social distance: partying hard, in the way they might ordinarily do just before getting their diplomas—commemorating, and becoming maudlin about, the friendships made during their heretofore more cheerful college years. The wags at Satire V tweeted about Virtual Visitas, with one comment in a mock thread reading, “haha the Stanford virtual weekend is in VR, kinda leaning toward them tbh.” An alumnus of a certain age, and an athletic bent, channeled Tom Lehrer ’47, A.M. ’47, in suggesting that the chief public-health recommendation be emblazoned on posters around campus, urging all to “Wash Fiercely, Harvard!” There were ghoulish reflections on the overnight resolution of Boston’s formerly maddening commutes (offset by the disquieting sensation of empty highways and subway platforms). The persistence of such human spirit, amid the alarming news and social displacement, was perhaps the best medicine of a certain kind.
In purely academic terms, of course, the hard parts were still to come. With students dispersed and public-health experts recommending eight weeks of social separation, could there be a 369th Commencement as scheduled on May 28 (read about the marquee speakers on page 23)? Sadly, prudently, no, as Bacow informed the community in a heartfelt letter on March 20 (see harvardmag.com/comm-postponed-20). Virtual conferral ceremonies will assure that all in line to receive a degree will in fact have it awarded. And the formal exercises are postponed, not canceled, he wrote: the University intends to “host an in-person celebration sometime later, once we know it is safe to bring people together again.” The news, although expected, confirmed the sense of dislocation felt especially acutely by College seniors abruptly separated from friends, with beloved haunts left behind. (Read their reflections here and here, and about coverage of remote teaching.)
After what they described as intense preparations, faculty members in all disciplines began teaching remotely on Monday morning, March 23—and students seemed glad to be reconnected to their courses, professors, and peers.
This step toward a new normalcy was interrupted shortly after noon the next day. A new message from Bacow brought the pandemic home: he and his wife, Adele Fleet Bacow, had tested positive for COVID-19, and were isolating at home. (They recovered.)
Affirming how much had changed for the community, on March 27, FAS dean Claudine Gay notified her colleagues that grading for this term will be on an “Emergency Satisfactory/Emergency Unsatisfactory” or “SEM/UEM” basis. She cited the often demanding circumstances in which students found themselves: “Some have seen parent job losses, or have had to take over childcare and other household responsibilities, as healthcare and other essential workers in their families continue to provide critical support or have become ill themselves. Those who relied on the public library for Internet access are struggling to find other ways to join their classmates online, as public buildings are ordered closed. Students in a time zone 12 hours away from us are feeling remote and closed off…by closed borders.”
While these emergency measures were being taken, University leaders also had to begin contending with the inevitable financial fallout from the stunningly swift change from a growing, full-employment economy to a prospectively severe recession. In their messages accompanying Harvard’s fiscal year 2019 annual financial report, released last October, President Bacow and vice president for finance Thomas J. Hollister pointed to the likely imminent end of the record U.S. economic expansion: the recovery dating from the financial crisis and Great Recession more than a decade ago (see harvardmag.com/financial-endowment-reports-19). Bacow has experience with lean times (he led Tufts University through that tumultuous period; see “The Pragmatist,” September-October 2018, page 32), and accordingly directed Crimson administrators and deans to plan warily. Hollister’s organization disseminated a leaned-down “financial resilience” guide, subtitled “A Recession Playbook,” summarizing detailed internal advice on how to incorporate this cautious perspective in plans and operations (https://ofsp.finance.harvard.edu/blog/financial-resilience-harvard)—and increased cash holdings. In a harbinger of things to come, on March 18, Moody’s Investors Service downgraded the entire higher-education sector’s credit outlook to negative, citing higher expenses and constrained revenues.
Harvard is better prepared for economic adversity than it was in 2008-2009.
Nevertheless, as of late March, it could be said with confidence that compared to the crisis and Great Recession that marked 2008-2009, the University today is prepared for adverse economic circumstances and contingencies with far more liquid financial resources on hand. Moreover, expense growth during the past several years has been relatively restrained compared to the middle of the prior decade (Harvard has banked surpluses since fiscal year 2014). So the inevitable spending adjustments, though perhaps difficult, will come as less of a cultural shock to the institution. Finally, abrupt though the revaluation of investment assets has been during this late winter and early spring, it is—so far—less extreme than the cumulative market collapse that marked the end of the prior decade.
During the last week of March, Hollister noted two immediate consequences of the coronavirus disruptions.
First, “We’ve been writing checks back to people” to refund room and board fees for the duration of the spring semester. And in the meantime, on March 27, the University announced that it would maintain the pay and benefits of administrative and service employees, like dining personnel, and would provide pay and benefit relief for contracted dining, custodial, and security personnel whose work is disrupted—all through May 28.
Second, he noted that revenues expected to be received from in-residence executive and continuing education are obviously at risk for the rest of the spring term, and perhaps beyond. This is a year-round, huge business for Harvard (such revenues totaled a half-billion dollars in fiscal year 2019, with just a fraction delivered online—and those courses may be vulnerable, too). Although Harvard Business School and FAS’s Division of Continuing Education are the largest providers, most schools have some continuing-education courses, most were investing in expansion, and, in aggregate, such instruction has been Harvard’s most consistently growing source of revenues in recent years. The prospective loss of these funds could quickly amount to tens of millions of dollars, if not much more.
Hollister also pointed to likely pressure on individuals’ philanthropy, and on non-federal sponsored research support ($300 million of revenues in fiscal 2019)—itself reliant on donor institutions’ underlying assets.
That raises the question of Harvard’s endowment—distributions from which are the largest source of revenues for the University’s academic operations (35 percent of the $5.5 billion total in fiscal 2019). Although an illustration of how the endowment might be affected under certain assumptions appears within a larger report on Harvard finances at harvardmag.com/virus-fiscal-hit-20, conditions are obviously very fluid; results will be reported in early autumn.
Endowment distributions are determined by a formula that smooths investment performance in prior years to dampen the effects of extraordinary gains or losses in any one year’s budget. Thus, a double-digit percentage decline in the endowment’s value does not automatically translate into an equivalent reduction in the funds distributed to the faculties in the next fiscal year. For the year beginning this July 1, deans had been expecting a modest increase in the funds distributed. Given recent comments by Hollister (“[W]e expect to see a decline in revenues due to…increased financial-aid needs…and a lower distribution from the endowment, and we will need to adjust our spending accordingly”), it may be time to read the tea leaves. If the endowment’s value indeed declines significantly, the distribution will be adjusted—perhaps sooner rather than later, and in any event, no longer delivering the annual increments in funding to which schools have become accustomed in order to fulfill their academic missions.
Whatever unfolds,the financial administrators’ “playbook” has a checklist: “identify and anticipate economic exposures,” “divid[e] all programs and activities within categories of investment, maintenance, or reduction/elimination,” “create off-ramp budget flexibility,” “build cash reserves,” and so on. It would be surprising if Harvard officers were not already scrutinizing hiring, expenses, compensation, and more—putting their recession preparations into effect sooner, and more strictly, than the community expected when spring term began—what seems an age ago.