Summarized financial information for the year ended June 30, 2023
The University ended fiscal year 2023 with an operating surplus of $186 million compared to $406 million in fiscal year 2022, on an operating revenue base that increased 5% or $262 million, to $6.1 billion. The reduced surplus was not unexpected and was driven primarily by expenses associated with renewed return to campus activity and strategic investments in our workforce, with increased compensation for faculty and staff, a decrease in vacancy rates, and overall growth in new workers across campus.
Read the full FY23 Financial Overview from the Vice President for Finance and the Treasurer
Operating Revenue
Total operating revenue increased 5% or $262 million to $6.1 billion. Harvard’s diversified revenue portfolio relies on three main sources of revenue: education or tuition, sponsored research, and philanthropy.
Sources of Operating Revenue for Fiscal 2023
Philanthropy: Endowment income made available for operations and Gifts for current use | 45% |
Education: Degree seeking education and Continuing & executive education |
22% |
Research: Federal and Non-Federal sponsored revenue | 17% |
Other | 16% |
Operating Expenses
Total operating expenses increased by $482 million or 9% to $5.9 billion. Spending rebounded in many areas across the University, reflecting both increased campus activity following the pandemic as well as the impact of inflation, with increases in compensation and higher discretionary spending (travel, food, supplies and equipment) leading the growth. Compensation expense (i.e. salaries, wages and benefits), represented more than half of the University's total operating expense in fiscal year 2023, increased 9%.
Operating Expenses for Fiscal 2023
People: Salaries and wages, benefits | 52% |
Space: Space and occupancy, depreciation, interest | 17% |
Other Operating Expenses | 31% |
Harvard's Endowment
Harvard’s endowment has existed for nearly four centuries and belongs to current and future generations of Harvard students, faculty, and researchers. The aggregate endowment is made up of over 14,000 individual endowments that support nearly every aspect of the University’s work, from student financial aid to neighborhood programs, from museum and library preservation to campus activities, from faculty and fellow positions to scientific advancement. Donor contributions to the endowment 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 $2.2 billion in the fiscal year 2023.
While the endowment is a critical source of funding, 70% of the annual distribution from the endowment is directed to specific programs, departments, or purposes and must be spent in accordance with the terms set forth by the donor. Funds without donor restriction are more flexible in nature, although are often restricted at a high level such as to one school, and are critical in supporting structural operating expenses and transformative, strategic initiatives.