Harvard Runs Deficit, Even as Endowment Grows Sharply

""Looking forward, daunting challenges await: the declining trajectory of federal research support, the forthcoming increase in the endowment tax, the still-unfolding challenges to our ability to host international students and scholars and ongoing litigation-all against the backdrop of serious geopolitical and economic pressures and the potential for significant inflation," Harvard treasurer Timothy Barakett and Ritu Kalra, vice president for finance and chief financial officer, wrote in the report. "Structural changes and reductions across our Schools and units will be necessary, and they will not be easy. Our work is far from finished.""

""At the same time, Harvard's endowment-already the largest among universities worldwide-grew by $3.7 billion to $56.9 billion, thanks to an investment return of 11.9 percent, up from 9.6 percent in FY 2024. In addition, alumni and friends donated more than $600 million in unrestricted gifts, according to the report-a record for the university. In his opening message in the report, Harvard president Alan Garber acknowledged the contributions of "alumni and friends who believe in our mission and in our capacity to evolve, especially in times of crisis."""

Harvard ended fiscal year 2025 with a $113 million operating deficit, the first operating loss in more than a decade, after a $45 million surplus in FY2024. Revenue and expense growth both slowed, with expenses rising 6 percent while revenue rose 3 percent. The deficit reflects effects from fiscal and regulatory actions and mounting external pressures. Declining federal research support, an upcoming endowment tax increase, challenges hosting international students and scholars, ongoing litigation, geopolitical and economic pressures, and potential inflation present material headwinds. The endowment grew by $3.7 billion to $56.9 billion on an 11.9 percent return, and alumni and friends donated over $600 million in unrestricted gifts, a record total. Structural changes and reductions across schools and units will be necessary and difficult.

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