An update on the University’s initial responses to the worsening economic climate
(Sidebar) The shrinking Harvard endowment affects the University’s different schools differently.
The University moved quickly to sell new bond issues, to refund existing short-term debt, to increase financial flexibility, and as it turns out to extricate itself from expensive interest-rate swap agreements.
Harvard Management Company has issued its annual report on the compensation of its highest-earning investment professionals, likely a sensitive subject when their past performance has strongly exceeded the market but attention is now focused on the sharp decline in endowment-asset values.
Yale disclosed the impact of the financial markets on its endowment, and outlined a series of phased budget-cutting measures.
Harvard’s government and medical schools are pursuing cost reductions of up to 10 percent in next year’s budget.
The Faculty of Arts and Sciences has outlined large cost cuts, even after freezing salaries and slashing the number of faculty searches it will authorize.
The Faculty of Arts and Sciences has detailed its debt, spending, and other financial challenges as it prepares much leaner budgets in light of the sharp decline in Harvard’s endowment.
Harvard’s endowment declined 22 percent through October 31, so the University is responding with budget reductions and a new financial strategy of substantial borrowing to maximize flexibility in light of uncertain market conditions.
Dean Michael D. Smith outlined for the Faculty of Arts and Sciences the severe challenges—as much as a $200-million shortfall in revenue—looming in the next year as the endowment declines in value.
Each Harvard unit is exposed to declining endowment values, but to different degrees; the schools’ exposures are detailed, using University data, and FAS’s dean writes to his faculty about an unprecedented financial squeeze.
President Drew Faust today e-mailed a letter to faculty, students, and staff, highlighting the “extraordinary turbulence still roiling the world’s financial markets and the broader economy.”
A look at Harvard’s reliance on endowment income to fund academic operations; the news from other academic institutions; and the composition of the endowment
Harvard’s endowment grows in fiscal year 2008 by $2.0 billion, or 5.7 percent, to $36.9 billion.
A summary of the Harvard University Financial Report for fiscal year 2008