Harvard’s Billion-Dollar Disappointment

Only at the nation’s richest university can a billion-plus-dollar fundraising haul equal disappointment.

After a tumultuous year marked by student protests over the war between Israel and Hamas and an abrupt leadership change, a new report shows donations to Harvard University fell by 15 percent. While Harvard collected almost $1.2 billion in total gifts in the fiscal year that ended on June 30, that number is down from nearly $1.4 billion raised in the prior fiscal year.

Harvard leaders have called the number “disappointing.”

A ‘More Complicated’ Future

Tensions have roiled Harvard’s campus since last fall, when administrators were accused of allowing antisemitism to go unchecked and failing to protect Jewish students amid protests over the war in Gaza. Former Harvard president Claudine Gay and her counterparts at the University of Pennsylvania and the Massachusetts Institute of Technology sparked national outrage when they equivocated at a congressional hearing on antisemitism in December, offering legalistic answers to a lawmaker’s question about hypothetical calls for the genocide of Jewish students.

Gay was soon swept up in a plagiarism scandal, stepping down abruptly in the wake of questions about her scholarship, some of which she later corrected. She remains a faculty member at Harvard.

Amid the fallout, some billionaire donors, including hedge fund manager Bill Ackman, an alum, publicly blasted the university; others announced plans to withhold donations.

New president Alan Garber warned of potential fundraising woes back in March. And in the financial report released last week, he acknowledged that “last year was not an ordinary one,” citing ongoing efforts to stamp out antisemitism as well as anti-Muslim and anti-Palestinian bias. He also noted that at the recommendation of a faculty advisory group, Harvard had embraced institutional neutrality.

“The work ahead demands much of each of us,” Garber wrote in a statement released as part of the university’s Annual Financial Report. “Fortunately, we are people supported by generous physical and financial resources whose ambitions are limited only by our imaginations. Our University will emerge stronger from this time—not in spite of being tested, but because of it.”

In an interview with The Harvard Gazette, Ritu Kalra, the chief financial officer and vice president for finance, noted the potential challenges of maintaining high donation levels.

“The future will be more complicated—both the level of giving and the level of [endowment] returns may be difficult to sustain—but we remain grateful to our donors for their steadfast belief in Harvard’s academic mission,” Kalra said. “Their support is vital to everything we do.”

Harvard’s endowment posted a 9.6 percent return in the most recent fiscal year.

Of the $1.2 billion in donations, gifts directed to the endowment added up to $368 million, a fall of nearly $200 million compared to the last fiscal year—and close to the lowest total in the past 10 years ($338 million). But gifts for current use were up by 9 percent, or $42 million, over last year.

Harvard also expressed concerns in the financial report about rising costs, with officials writing, “for a second consecutive year, expense growth (9%) outpaced revenue growth (6%), leading to a smaller surplus than had been budgeted and a substantially lower operating margin, at under 1% of revenue, than has been characteristic of recent years.”

Harvard’s operating surplus stands at $45 million.

Catalyst for Change?

Doug White, a philanthropy adviser, suggested that acrimony over protests, the controversial congressional hearing and Gay’s plagiarism scandal all contributed to lower giving rates at Harvard. While the vast majority of U.S. universities will see nowhere close to $1 billion in donations, he suggested that “it’s all relative” for Harvard, and that this year’s figure is “less than what they have been raising.”

He added, “They’ve been used to getting more, and they’ve been budgeting with that.”

Some critics underscored the relatively low numbers as a possible catalyst for change. Ackman wrote on X, “The only hope for change at @Harvard is a financial crisis.”

In a post on LinkedIn, Larry Ladd, a senior consultant with the Association of Governing Boards of Universities and Colleges—and former Harvard budget director—called the drop in gifts to Harvard’s endowments “trivial” by the university’s standards. He cited the growth in donations for current use, as well as a booming endowment that “grew to $53.2 billion in the same year.”

In a follow up email to Inside Higher Ed, Ladd also pointed out that “the stated concern about expense growth” in the financial report has been “a consistent refrain from Harvard” over the years.

“The refrain is intended to lower the expectations of internal constituencies (faculty, administration, and students), who always push for more spending,” he wrote. “The Harvard leadership is trying to remind those constituencies that even Harvard’s resources are limited.”

The report noted growth in midsize and smaller contributions from donors, which Ladd sees as a positive sign. It shows that “they believe in the university and its work,” he said. “They don’t give to advance specific purposes or gain name recognition. Their loyalty remains strong, as does the loyalty of almost all of the major donors. It’s surprising how much attention just a few donors can get.”

Others noted that Harvard still has deep pockets to resist donor pressures.

“Harvard still received $1.17 billion & its endowment is $53.2 billion, which *should* give it the guts to stand up against mogul blackmail,” Jeff Jarvis, emeritus professor at the Craig Newmark Graduate School of Journalism at the City University of New York, wrote on X.

White struck a similar tone, arguing that universities need to make it clear to donors that their approach to protests, leadership decisions and other matters will not be influenced by money.

“A place like Harvard, especially, should be able to say that. But every university should say something along those lines, because they’re not there to satisfy donors’ political whims; they’re there to educate students, and having a protest is part of the educational process in terms of current events,” White said. “They should say, ‘We’re going to support students who want to voice those concerns, and you as a donor are not going to sway the decisions we make operationally or certainly not our strategic plan for our educational mission.’ And I have not heard that.”