Faculty of Arts and Sciences Ends Fiscal Year 2023 with $62 Million Surplus

Harvard’s Faculty of Arts and Sciences reported a surplus of $62 million for fiscal year 2023, according to a report presented at a faculty meeting Tuesday.

The surplus represents a decrease from the $68 million surplus the FAS reported from fiscal year 2022. The dean’s unrestricted reserves rose to $205 million, rounding out at 13 percent of the annual expense and meeting the University’s benchmark of 10 percent. The FAS reached this threshold for the first time in its history in fiscal year 2022.

In the presentation, the FAS highlighted its investment in faculty and expansion of the Harvard Financial Aid Initiative.

“Beginning with the Class of 2027, the cost to attend Harvard College is free for families with annual incomes below $85,000, and expected contributions for families with incomes between $85,000 and $150,000 max out at 10 percent of annual income,” the report read.

Total revenues rose 7.1 percent from fiscal year 2022 to $1.6 billion. Endowment income distribution continued to account for the largest share of cash revenues.

Current use gifts grew 32.6 percent, representing the largest category of growth from fiscal year 2022 to fiscal year 2023. This value also signifies the highest value for the category in five years, “attributed to one significant gift of $35M,” per the report.

The modest returns on revenues come amid a decrease in Harvard’s overall endowment value for the second consecutive year, with rising distributions to Harvard’s schools that have outpaced revenue growth over the same period.

The report states that though “the Harvard Corporation manages distributions to reduce the impact of down years on the FAS, continued below-target earnings could constrain revenue growth in future years.”

FAS expenses totaled $1.5 billion, an 8.5 percent increase from fiscal year 2022. Compensation — salaries, wages, and benefits — comprised the vast share of expenses at $707 million, 46 percent of the total.

Non-compensation expenses — such as for space and occupancy, supplies, and equipment — accounted for an increased 8.4 percent from fiscal year 2022, as the report cited on-campus activities having “surged back to levels seen before the pandemic.”

In a closing note, the report classified fiscal year 2023 as “the end of the pandemic period” as a financial matter.

“During this year, we saw a return to prepandemic levels of staffing, following an early retirement program, and prepandemic levels of expenditure on everything from campus operations, to travel and meals,” the report read.

Reflecting on fiscal year 2023, the FAS administration expressed optimism for future growth in the face of “elevated inflation levels, capital market fluctuations, and increasing competition for talent,” though noted that this optimism is tempered by the “muted” performance of recent years.

“However, we enter this period of uncertainty from a position of financial strength and, thanks in no small part to our strategic planning efforts, prepared for the careful financial management and tradeoffs that will be required,” the report stated.

—Staff writer Rohan Rajeev can be reached at rohan.rajeev@thecrimson.com. Follow him on X @rohanrajeev_.