Harvard University is expecting big losses from the coronavirus pandemic, to the tune of a $750 million revenue shortfall for fiscal year 2021, and $415 million for the current period, Executive Vice President Katie Lapp wrote in a letter describing the state of the school’s finances.
“This figure includes, among other things, refunding room and board for the last half of the semester and providing moving, travel, and other financial assistance to students who were required to depart campus,” Lapp said in the letter. “It also includes canceling [in-person courses] and programs, and the loss of funding from federal and non-federal sources due to the closure of labs.”
As a result, the university is implementing a host of cost-saving measures to help mitigate the severity of the impact. Lapp said the school is “facing significant challenges which will require difficult decisions in the coming months.”
These steps include salary freezes for all faculty and exempt staff, a hiring freeze across all functions of the university, a review of projects requiring significant capital to prioritize them and defer less important expenditures until later, deferring or canceling any nonessential spending, and voluntary salary reductions for senior staff. Lapp also said the university is considering laying off some staff or putting them on furlough.
The university’s $41 billion endowment, the United States’ largest, is a stalwart environmental, social, and governance (ESG)-minded collective, its staff having voted to divest its $41 billion portfolio of fossil fuel investments earlier this year. As a result, the university instructed the endowment to develop a strategy to achieve net-zero greenhouse gas emissions from its investment portfolio by 2050.
“Harvard’s endowment should be a leader in shaping pathways to a sustainable future,” Harvard University President Lawrence Bacow wrote in a letter to members of the faculty of arts and sciences.