Harvard logs $100M surplus despite 20% drop in federal research money

Dive Brief:

Harvard University brought in $6.7 billion in total operating revenue in fiscal 2026, remaining roughly flat compared to prior year, according to its latest financials released Thursday.
The Ivy League institution posted a surplus of $100.4 million compared to a $112.6 million deficit last year. With the surplus, Harvard had a 1.5% operating margin after a major cost-cutting effort reduced its workforce and shaved 2% off its expenses.
However, revenue from federal research funding dropped to $506 million, down 19.5% compared to fiscal 2025. That loss was among the biggest hits to Harvard's budget this year, according to CFO Ritu Kalra and Treasurer Timothy Barakett.

Dive Insight:

University leaders invoked Harvard’s resilience in letters introducing the university’s latest financial report.

“Our stewardship has been focused on driving efficiencies and adapting our operations to meet the uncertainty of the moment,” Meredith Weenick, Harvard’s executive vice president, said in a statement Thursday. “Our focus has been on resiliency.”

By the numbers

$1.5 billion

The revenue Harvard made from net tuition and other sources from its students. That comprised about 22% of the university’s $6.7 billion in total operating revenue for fiscal 2026.

$104 million

The decline in Harvard’s spending on employee pay, which represents a 3.8% year-over-year dip as the university slashed its workforce through hiring freezes, attrition and restructuring.

27.1%

The return rate on Harvard’s investments, as its endowment grew to $68 billion in fiscal 2026.

However, resiliency came at a cost, namely a reduction to the university’s employee headcount that included layoffs. “Those two facts — a surplus, and a smaller community — sit uneasily together,” Kalra and Barakett wrote. “Yet they cannot be separated.”

Also key to Harvard’s resiliency is its massive endowment, which is typically the largest of any U.S. institution by billions of dollars. By the end of the fiscal 2026 year in late June, Harvard’s endowment was valued at $68 billion, up over 19% from last year.

Investment income grew 5.1% year over year to $2.9 billion. Those earnings include the $2.6 billion the university withdrew from its endowment, amounting to 39% of its operating revenue in fiscal 2026.

That kind of money helped Harvard plug the research funding shortfall amid the Trump administration's ongoing political attacks on the university.

“Fewer new awards and slower spending on existing awards drove the decline — the consequence of a longstanding relationship between the federal government and American research universities now called into question,” Kalra and Barakett wrote.

Amid the decline, Harvard put up $400 million of its own money toward the $1.2 billion it logged in research activity, or about one-third of the total.

Kalra said in a statement Thursday that the university was working with foundations and industry to diversify its research funding going forward.