Harvard University has warned that donations to its endowment are plummeting as alumni outraged over its weak response to anti-Semitism on campus have severed ties with the university.
Cash gifts to Ivy League schools fell about 15% to less than $1.2 billion during the fiscal year that ended June 30, according to one study. Harvard University Financial Report It was released on Thursday.
Harvard University was mired in controversy after the October 7 terrorist attacks in Israel by Hamas. As at other elite universities across the country, pro-Palestinian students staged protests and set up encampments on Harvard's campus.
Tensions escalated after Harvard University's then-president Claudine Gay refused to condemn a student group that held Israel “full responsibility” for the October 7 attack.
Shortly after, deep-pocketed donors, including billionaire investor Len Blavatnik and hedge fund mogul Ken Griffin, stopped giving to the university. Less affluent alumni also waived their donations.
Harvard University said it was forced to rely on its $53 billion endowment, the largest in the world, to make up the difference.
The fund's investment return was 9.6%, the highest in three years. Chief Financial Officer Ritu Kalra called it a “welcome boost” but warned universities would need to cut costs to cope with slowing revenues.
“The recent pace of spending underscores the need for prudence going forward,” Kalra said during a discussion on Harvard's finances.
She said the cost increases are “purposeful,” with some of the increased spending earmarked for advanced technology, artificial intelligence and improvements to campus facilities.
Harvard University also said it was increasing spending on financial aid.
While operating revenue increased 6%, operating expenses rose 9%, marking Harvard's second consecutive year of accelerating cost increases.
The university ended the fiscal year with a surplus of $45.3 million.
The university has faced backlash since responding to anti-Semitism on campus last year. Gay resigned from her position in January, but the school is still reeling from the fallout from her comments as alumni continue to distance themselves from Harvard.
Alan Garber, who took over as president of Harvard after Gay's resignation, has struggled to restore the school's reputation.
He told the school's newspaper, the Harvard Crimson, that he is disappointed with this year's fundraising numbers, but remains hopeful that a turnaround is on the horizon.
In a statement Thursday, he noted “the level of support has increased throughout the year” from alumni and other supporters.
Billionaires have turned their backs on elite universities, but they haven't given up on higher education altogether.
Billionaire Blavatnik, who has cut donations to schools, is now funding an anti-woke university in Texas that still only has 92 students.
UT Austin has capitalized on donor concerns, raising about $200 million to date.
