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.
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.
This is Harvard’s first operating loss since fiscal 2020, which included the pandemic, and its largest operating loss since fiscal 2011.
In an annual report released Thursday, Harvard University reported that, despite increased giving, it had an operating deficit at the end of its most recent fiscal year.
Why it matters Although a federal judge has restored a large portion of Harvard’s federal funding, the Trump administration’s attempts to reduce it have had a negative impact.
In their own words: “Fiscal year 2025 was incredibly difficult, even by our centuries-old standards. In the report, Harvard President Alan Garber stated, “We reduced projects and expenses, announced a hiring freeze and painful layoffs, and kept salary increases flat for exempt employees.”.
According to the figures, Harvard reported an operating loss of almost $113 million for the fiscal year that ended on June 30, 2025, as opposed to a gain of $45 million for the previous fiscal year.
Direct and indirect federal funding decreased by about $58 million.
The school also reported higher expenses related to new hires, wage increases, and health benefits. The severance costs associated with layoffs were not mentioned.
This represents Harvard’s biggest operating loss since fiscal 2011 and its first since fiscal 2020, which included the pandemic.
Donations: This year’s current-use gifts came to approximately $629 million, the highest amount in Harvard’s history and an increase from $528 million the year before. Gifts like these can be used in full.
But a massive fiscal 2024 decline in endowment gifts was caused by donor discontent with the school’s handling of campus protests over the Israel-Gaza conflict.
These mostly restricted gifts came to $364 million, a decrease from $368 million in fiscal 2024 and $561 million in fiscal 2023.
Investments: The value of Harvard’s endowment increased to $56.9 billion with an 11.9% return, up from 96.6 percent the previous year. Private equity remains its largest asset class, rising from 39 percent to 41 percent.
Although the endowment has restricted more than 80 percent of its funds, it has contributed $2.05 billion to the school’s operations. Both in terms of dollars and percentage, that represents a substantial increase over the previous year.
Additionally, the school warns that a new excise tax that will take effect in fiscal 2027 will have a negative impact on future endowment results.
The bottom line: Harvard and the White House are reportedly negotiating a potential settlement after the White House appealed the judge’s funding cuts freeze.
