Bacow Says Harvard Has Incurred ‘Significant’ COVID Costs, Including Tens of Millions for Tests

University President Lawrence S. Bacow said Harvard’s expenditures related to the pandemic have been “significant” — including “tens of millions of dollars” in COVID-19 testing alone — in an interview with The Crimson Friday.

“The expenditures are ongoing but they're significant,” he said.

Still, some of the financial devastation that experts predicted at the start of the pandemic has not come to fruition.

“We've done better in some areas than we anticipated doing, in part because the financial markets have recovered reasonably quickly,” Bacow said. “And that's good news. But we also continue to face headwinds in other areas.”

On top of purchasing and administering tens of thousands tests, Bacow said the University has been forced to spend on the curriculum redesigns and information technology required to sustain remote teaching.

The pandemic has also slowed the rate at which labs — which resumed some in-person activities in June — spend their federal research grants, he noted.

“That has consequences, because for every dollar of direct expenditure on a government research grant, we get indirect cost recovery back which supports the fixed cost of operating the University, and that money is not coming in as quickly,” Bacow said.

Interruptions to construction projects — like the near-complete Science and Engineering Complex in Allston and the renewal of Adams House — are also “always expensive,” Bacow said.

“We've made judgments and decisions about deferral of specific capital projects that we could defer,” he said. “There are others that as a practical matter, we could not, because the buildings were half constructed, or the renovations were half done.”

“Those are decisions which we continue to look at and try and evaluate and make judgments in the face of enormous uncertainty,” he added.

Bacow said the University has also been forced to grapple with “substantial foregone revenue.”

“Because we're not collecting room and board, for example, from many students. We have fewer students enrolled, so that's less tuition revenue,” Bacow said. “We've seen a dramatic decline in our executive education activities, so that's less revenue there.”

“The financial impacts of the pandemic have affected philanthropy, they have affected virtually everything that we've done,” he added.

To mitigate the financial fallout, the University-wide salary and hiring freezes announced on April 14 remain in place, per Bacow.

—Staff writer Camille G. Caldera can be reached at camille.caldera@thecrimson.com. Follow her on Twitter @camille_caldera.

—Staff writer Michelle G. Kurilla can be reached at michelle.kurilla@thecrimson.com. Follow her on Twitter @MichelleKurilla