How Will Federal Actions Affect Harvard’s Finances?

Putting Harvard’s $53 billion endowment into perspective

Harvard’s $53.2-billion endowment might sound limitless, but not when compared to the University’s annual expenses: $6.5 billion. If Harvard relied entirely on the endowment to fund its operations (ignoring investment returns), the total would be depleted in a little more than eight years. Nor does the endowment seem large when considering that it is not a single pot of money but 14,600 separate funds. Eighty percent of those funds are restricted to specific uses defined by the original donor. And most belong not to the Harvard president, but to the individual schools, which maintain separate budgets under a principle known as “every tub on its own bottom.”

Harvard, if taxed on endowment investment gains at the 21.4 percent rate discussed in Congress in May, would pay about $850 million annually on an average investment gain of 7.5 percent. That sum is greater than Harvard’s total federal support for research in fiscal year 2024 ($686 million, now frozen) and larger than the last fiscal year’s $525 million in annual gifts for current use. But even philanthropic sources of income would likely diminish if the tax treatment of donations were to change. And while the loss of federal grants and contracts would cost the University about $2.2 billion over the next five years (the typical length of a federal grant), taxing the endowment would result in lost income of more than $4.25 billion by the end of that period—combined blows from which the country’s premier academic research institution might not recover, scientists say.


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Market Value of the endowment as of June 30, 2024

(in millions of dollars)

Colorful pie chart showing a $53,235M total market value, with Harvard Management Company holding the largest share.

Fiscal Year 2024 Operating Expenses

 

Pie chart of Harvard’s operating expenses showing 52% for people, 17% for campus, and smaller slices for other costs.

 

Fiscal Year 2024 Sources of Operation Revenue by School

Stacked bar chart showing Harvard schools' operating revenue sources, with largest shares in student income and endowment.

 

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