Financial Overview

Summarized financial information for the year ended June 30, 2016

The University’s operating surplus for the year was $77 million or 1.6% of revenue, slightly higher than last year’s operating surplus of $62 million, or 1.4% of revenue. The University’s net assets decreased 5%, going from $44.6 billion to $42.4 billion. Given the challenging investment climate, this was not a surprise; it was a very difficult investment year for all endowments and pensions. Nonetheless, Harvard’s financial condition continues to earn a AAA-rating by the leading rating agencies, due in large part to the overall strength and size of the endowment, manageable debt profile and operating surpluses.

Read the full FY16 Financial Overview from the Vice President for Finance and the Treasurer

Operating Revenue

Total operating revenue increased 6% to $4.8 billion. The largest drivers were the annual endowment distribution, revenue from continuing and executive education programs and sponsored revenues.

Sources of Operating Revenue for Fiscal 2016
Endowment income made available for operations36%
Student income21%
Sponsored support17%
Gifts for current use9%


Operating Expenses

Total operating expenses increased by 5% to $4.7 billion. Compensation expense (i.e. salaries, wages and benefits), which represents approximately half of the University's total operating expense, increased 6% to $2.3 billion.

Operating Expenses for Fiscal 2016
Employee salaries, wages, and benefits50%
Operating expenses
(space and occupancy, services purchased, supplies and equipment, other expenses)
Depreciation and interest12%
Scholarships and other student awards3%

Read the full FY16 Financial Report

Harvard's Endowment

Harvard’s endowment is a dedicated and permanent source of funding that maintains the teaching and research mission of the University. Made up of more than 13,000 individual funds invested as a single entity, the endowment’s returns have enabled leading financial aid programs, groundbreaking discoveries in scientific research, and hundreds of professorships across a wide range of academic fields.

Distributions from Harvard’s endowment provide a critical source of funding for the University. The endowment distributed $1.7 billion in the fiscal year 2016.

About 70 percent of the funds that make up Harvard’s endowment are restricted to specific programs, departments, or purposes (dedicated scholarships, named professorships, etc.), and must be spent in accordance with terms set forth by the donor. Payout from these funds can only be spent in support of the fund’s designated purpose. 

Unrestricted funds, which account for about 30 percent of Harvard’s endowment, are more flexible in nature and are critical in supporting structural operating expenses and transformative, strategic initiatives.

Learn more about Harvard's endowment