Harvard posts biggest operating loss in 14 years as Trump cuts bite
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Harvard University ended its most recent fiscal year with an operating deficit, despite increased giving, according to an annual report released on Thursday.
Why it matters: The Trump administration's efforts to cut Harvard's federal funding took a toll, even though a federal judge has reinstated much of the money.
What they're saying: "Even by the standards of our centuries-long history, fiscal year 2025 was extraordinarily challenging ... We announced a hiring freeze and painful layoffs, kept salary increases flat for exempt employees, and scaled back projects and expenditures," Harvard president Alan Garber wrote in the report.
By the numbers: Harvard reported a nearly $113 million operating loss for the year ending June 30, 2025, compared to a $45 million gain for the prior fiscal year.
- Federal funding, both direct and indirect, fell by around $58 million.
- The school also reported increased costs tied to health benefits, wage increases, and new hires. There was no mention of severance costs tied to layoffs.
- This is Harvard's first operating loss since fiscal 2020, which included the pandemic, and its largest operating loss since fiscal 2011.
Donations: Current-use gifts totaled around $629 million, the most in Harvard's history and up from $528 million the prior year. Such gifts can be used in their entirety.
- Endowment gifts, however, didn't recover from a masssive fiscal 2024 decline, which was driven by donor dissatisfaction over how the school handled campus protests over the Israel-Gaza war.
- The total for such gifts, which are largely restricted, was $364 million — down from $368 million in fiscal 2024 and $561 million in fiscal 2023.
Investments: Harvard's endowment generated an 11.9% return, up from 9.6% the prior year, bringing its value to $56.9 billion. Its largest asset class continues to be private equity, which grew to 41% from 39%.
- Over 80% of the endowment's funds are restricted, but it contributed $2.5 billion to support the school's operations. That's a significant increase in both dollars and percentage from the prior year.
- The school also warns that future endowment results will be negatively impacted by a new excise tax that goes into effect for fiscal 2027.
The bottom line: The White House, which appealed the judge's funding cuts freeze, reportedly is in negotiations with Harvard over a possible settlement.
