The University has announced a budget surplus and strong endowment performance in its annual financial report released on Thursday, highlighting significant investments made during the fiscal year 2024. The report also noted philanthropic contributions that help fund increased financial aid and various academic and research initiatives.
The Gazette interviewed Executive Vice President Meredith Weenick, Chief Financial Officer Ritu Kalra, and Treasurer Timothy Barakett to discuss how careful planning and financial management have poised Harvard for future progress.
Reflecting on the University’s financial situation for fiscal year 2024, which concluded with a surplus of $45.3 million, Weenick stated that Harvard maintains a strong financial position due to thoughtful planning and stewardship. This year’s surplus is a result of strategic decisions across the University’s schools, allowing for investments in educational and research projects aimed at addressing global challenges.
Kalra emphasized that Harvard’s financial results are a cumulative reflection from various schools and units. While operating expenses this year exceeded revenues—growing by 9 percent compared to 6 percent in revenue—many of these expenses were deliberate investments intended to foster future growth. Areas of investment included enhancing technology infrastructure and updating campus facilities.
Barakett highlighted the importance of long-term planning, especially regarding financial aid commitments and sustainability projects. The challenges of the academic year 2023-2024, marked by public scrutiny, notably impacted financial decisions, although the priority was ensuring students had essential resources for wellbeing.
Philanthropy continues to play a crucial role in Harvard’s financial health, with current-use giving reaching its second-highest level and endowment returns hitting 9.6 percent. Despite potential future uncertainties regarding donation levels and returns, the strength of donor support remains vital for the institution.
Weenick noted that, despite challenges, Harvard’s commitment to excellence has not wavered, with recent achievements including Nobel Prize wins and record numbers of Rhodes Scholars.
The endowment’s latest return of 9.6 percent is expected to support distributions, although Kalra reminded that the endowment comprises numerous individual accounts with specific purposes. The strategy involves responsible spending to ensure sustainability for future students.
Kalra addressed the necessity of issuing debt amid rising interest rates, explaining that the University capitalized on favorable market conditions to fund capital projects and refinance existing debt.
Upcoming projects aim to enhance infrastructure, such as the creation of the American Repertory Theater in Allston and updates to various facilities, emphasizing the University’s commitment to long-term growth.
Weenick emphasized Harvard’s role in advancing public good through academic excellence, with significant external funding boosting research efforts. Initiatives also aim to connect Harvard with surrounding communities, fostering civic engagement.
Looking ahead, Weenick recognized the need for caution regarding financial projections, especially as traditional revenue streams face constraints. Kalra reiterated the importance of financial resilience amid an evolving landscape.
Barakett expressed gratitude to the Harvard community for its commitment to the University’s mission, ensuring that Harvard continues to progress and fulfill its goals.