In a year of cost cutting, Harvard’s endowment reached a new peak: a whopping $68 billion

Harvard University reported that its endowment rose to about $68 billion in fiscal year 2026, a gain of nearly 20 percent from the prior year, driven by strong stock market performance and a 27 percent investment return, according to the report cited by The Boston Globe. Private equity grew to nearly half of the portfolio, its largest component. The endowment comprises roughly 15,000 individual funds, and because most are restricted by donor directives, the university can freely access less than 5 percent of it. Endowment distributions of $2.6 billion funded nearly 40 percent of Harvard's operating revenue. Harvard also rebounded from its first deficit since the pandemic and closed the fiscal year with a $100 million surplus, which Chief Financial Officer Ritu Kalra said would cover only five days of operations.

The growth came during a year of cost cutting. Dozens of employees were laid off, mainly in the Faculty of Arts and Sciences, as leaders sought to address a $365 million deficit in that division. Compensation accounted for just over half of expenses, and total costs fell by $104 million. Kalra wrote in the report that "we would like to tell you that the uncertainty of the past two years is behind us. It is not."

Harvard faces a significant new tax burden. An 8 percent tax on endowment income begins this fiscal year, up from 1.4 percent, which the university estimates at $300 million annually, nearly equivalent to 40 percent of its annual student financial aid. The tax applies to wealthy private universities with endowments above $2 million per student, and MIT is also affected. Narv Narvekar, chief executive of the Harvard Management Company, said the tax "will redirect a meaningful share of investment gains that would otherwise support teaching, research, financial aid, and other purposes designated by donors." Former budget director Larry Ladd called the tax "punitive." Legal fees for defending against the Trump administration reached $210 million this fiscal year, up from $126.6 million in 2025 and roughly $80 million in 2024, according to tax filings.

Philanthropy remained strong despite donor pressure over antisemitism allegations and negotiations with the administration. Donors gave $1.5 billion, including a record $684 million in current-use gifts. Harvard President Alan Garber described the gifts as "votes of confidence." Meredith Weenick, executive vice president, said philanthropy funds financial aid, and students from families earning less than $200,000 paid no tuition for the first time. Julien Foriel, a Harvard researcher, said the endowment growth shows the university's financial strength even as nontenure-track academic workers, represented by a union that authorized a strike, have had stalled negotiations.