Hoekstra Tells FAS To ‘Prepare for Significant Financial Challenges’ Amid Uncertainty From Washington

Faculty of Arts and Sciences Dean Hopi E. Hoekstra told faculty on Tuesday that she has instructed FAS officials “to prepare for significant financial challenges” and “build financial capacity” as President Donald Trump ramps up threats to Harvard’s funding.

Her warning came in response to new annual budget guidance sent by the University to all 13 of Harvard’s schools. The guidance — issued earlier this year — directed administrators to cut costs and explore new revenue sources, according to FAS spokesperson James M. Chisholm.

University officials have long treated research cuts and proposed increases to the endowment tax as a serious threat. But Hoekstra’s comments, made at the FAS’ monthly meeting, show Harvard is now readying itself to weather a storm.

“We are experiencing times of uncomfortable uncertainty,” Hoekstra said of universities across the country.

She told professors that the FAS would need to tighten its purse strings.

“We need to find ways to build financial capacity by reducing expenses and thinking about building new sources of revenue,” Hoekstra said. “Can we be more efficient? The answer is simple: yes.”

Hoekstra said the FAS has provided budget guidance to divisions in recent weeks and is working directly with divisional deans and department chairs to “set clear, principled priorities” to “invest in the strength of our core academic mission of research and teaching.”

Hoekstra added that more details on the FAS’ budgeting strategy would be shared in future FAS meetings.

According to Hoekstra, shoring up the FAS’ financials has been a goal for her ever since she assumed the deanship in 2023, well before the University’s funding came under threat from Washington.

“Even before recent events, we were organizing to address the challenge of long-term sustainability,” Hoekstra said.

Though the FAS is Harvard’s richest school, it continues to face a “structural deficit.” In fiscal year 2024, FAS’ expense growth outpaced its revenue growth due to “increased operational costs” caused by inflation and a full return to post-pandemic activities, according to the 2024 FAS Annual Report.

“The FAS must remain disciplined in managing our expenses,” the report stated, adding that it will continue reviewing the FAS’s administrative functions, investing in technologies to “operate more efficiently,” and working to “continue efforts to unlock restricted funds.”

Though increases in expenses outpaced revenue growth, the FAS ended last year with a $3 million surplus. However, this figure represented a steep decline from the school’s $62 million surplus in 2023 and its lowest surplus since 2020.

The University has also faced financial headwinds amid its worst leadership crisis in recent memory and criticisms of its response to campus antisemitism complaints, experiencing a more than $150 million decline in endowment contributions in fiscal year 2024.

Hoekstra said she hoped the FAS would emerge stronger — but she told faculty to brace for the worst.

“Let me be clear: it will be difficult. But I know when times are tough the FAS steps up,” Hoekstra said.

—Staff writer William C. Mao can be reached at william.mao@thecrimson.com. Follow him on X @williamcmao.

—Staff writer Veronica H. Paulus can be reached at veronica.paulus@thecrimson.com. Follow her on X @VeronicaHPaulus.