Harvard CFO says university revenue ‘rebounded’ to pre-pandemic levels | News
Harvard vice president and chief financial officer Thomas J. Hollister said the university’s revenue had “rebounded” to pre-pandemic levels, putting Harvard in a “healthy” financial position, in a interview last week.
In the past fiscal year, Harvard saw its revenue plummet by $124 million — fueled by reduced room and board revenue due to fewer students living on campus — marking the first time that the University has seen two consecutive years of declining income since the Great Depression. Despite the decline in revenue, an influx of current-use donations and savings in operating costs enabled the University to end the year with a surplus of $283 million.
After returning to in-person operations last fall, Hollister said revenue from tuition and room and board has returned to 2019 levels, though he noted that not all revenue streams have recovered. fully recovered.
“Some areas such as parking fees, service fees of all kinds have not fully rebounded,” he said.
He also noted that record levels of inflation and “signs of stock market weakness” could reduce the amount of current-use donations and endowments Harvard receives this year.
During the interview, Hollister also discussed the following topics:
Expenses for pandemic measures
In recent months, Harvard has relaxed its Covid-19 policies, lifting its mask mandate and announcing that it will end all mandatory virus testing by May 10.
Although Hollister called the spending cuts for security restrictions “helpful” for Harvard’s finances, he said the University continues to spend heavily on pandemic measures.
“Testing and tracing continues to be a focus,” he said. “But as faculty learn and provide feedback on what is most effective and how to teach in a hybrid way, reconfiguring classrooms represents a lot of [the] expenditures that are made and planned for the future.
The University also recently ended its coronavirus workplace policies – which expired on April 1 – ending paid emergency sick leave benefits and partial compensation for inactive workers.
Hollister said financial considerations were not part of the decision, noting that inactive Harvard workers are simply “back to work.”
To deal with rising costs, Hollister said the Faculty of Arts and Science is engaging in “scenario planning” and trying to “stretch the money” to meet its needs effectively, noting that the Financial aid funds do not come entirely from the University’s endowment.
“Not all of our undergraduate financial aid is endowed, so the money has to come from somewhere else,” he said. “Often it’s annual donor funds that make up the shortfall.
Hollister said “it’s not always easy” to effectively allocate money in the FAS budget. However, he said financial aid remains ‘top of the list’.
“Planners at the Faculty of Arts and Science make projections over many years,” he said. “They are trying to prepare to continue to deliver on this pledge of financial aid.”
Hollister said the pandemic still adds “tremendous uncertainty” to Harvard’s finances, but praised the University’s ongoing scenario planning to ensure it remains prepared for changing circumstances. He also said Harvard was “positively” prepared and planning for a possible recession, pointing to the University’s “recession playbook”, published in 2019.
“Harvard tries to be disciplined in our financial planning,” he said. “We have been doing this for many years.”
Hollister called the uncertainty of the pandemic one of the most “difficult and crazy” parts of the University’s financial planning in recent years.
“We are trying to prepare in case things change,” he said. “And Harvard, by virtue of its planning – and this is a credit to many throughout the University – continues to pursue its mission effectively in these trying times.”
—Writer Dekyi T. Tsotsong can be reached at [email protected]
—Editor Eric Yan can be reached at [email protected]