Harvard University warned that donations to its endowment have nosedived as outraged alumni cut ties with the school over its feeble response to on-campus antisemitism.
Cash gifts to the Ivy League school fell about 15% to less than $1.2 billion during the fiscal year ended June 30, according to a Harvard financial report released Thursday.
Harvard was mired in controversy after Hamas’ Oct. 7 terrorist attacks on Israel. Like other elite colleges across the US, pro-Palestinian students protested and set up encampments on Harvard’s campus.
Tensions boiled over when Harvard’s then-president Claudine Gay refused to condemn student groups that held Israel “entirely responsible” for the Oct. 7 attacks.
Soon after, deep-pocketed donors – including billionaire investor Len Blavatnik and hedge fund titan Ken Griffin – suspended giving to the university. Less-wealthy alumni also abandoned their contributions.
Harvard said it has been forced to rely on its $53 billion endowment – the largest in the world – to make up the difference.
The fund posted a 9.6% investment return, the best in three years. Chief Financial Officer Ritu Kalra called it a “welcome boost,” but warned that the college will need to cut costs to keep up with slowing revenue.
“The pace of our recent spending underscores the need for prudence going forward,” Kalra said during a discussion about Harvard’s finances.
Some of the increased spending has been allocated toward advanced technologies, artificial intelligence and improving campus facilities, so the increase in costs is “purposeful,” she said.
Harvard said it is also spending more on financial aid.
Operating expenses rose 9%, compared to 6% growth in operating revenue, making it the second year in a row in which Harvard has seen its costs rise at a quicker rate.
The university finished the fiscal year with a surplus of $45.3 million.
The university has faced backlash since its handling of on-campus antisemitism last year. Though Gay resigned from her position in January, the school is still reeling from the aftermath of her comments as alumni continue to keep Harvard at arm’s length.
Alan Garber, who took over as Harvard’s president after Gay’s resignation, has been fighting to repair the school’s reputation.
Though he told the school newspaper, The Harvard Crimson, that he was disappointed by this year’s fundraising numbers, he remains hopeful a turnaround is on the horizon.
He pointed to “growing levels of support over the course of the year” from alumni and other supporters in a statement on Thursday.
Though billionaires have turned their backs on elite universities, they haven’t given up on higher education altogether.
Blavatnik, a billionaire who has cut his donations to the school, is now funding an anti-woke university in Texas that has just 92 students so far.
The University of Austin has cashed in on donors’ concerns and raked in about $200 million so far.
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