The most recent academic year marked a difficult time for Harvard, with sharp criticism from politicians, prominent alumni and donors leading to a public freeze on donations over concerns about the campus climate, rising anti-Semitism and anti-Muslim sentiment following the Hamas-led attack on October 7th was expressed in Israel. However, total donations fell about 15 percent to about $1.2 billion in fiscal year 2024 Gifts that the university can use immediately grew 9 percent year over year to $528 million.

Harvard President Alan Garber acknowledged donors' recent concerns in a statement Thursday and said the university is “well positioned to further advance its excellence in teaching and research.”

“As the University dealt with long-standing challenges highlighted by the events of the past year, alumni and others demonstrated both their concern and concern for the future of the institution by receiving increasing support throughout the year.” says Garber said. “Their commitment to Harvard’s core mission of excellence in teaching, learning and research is among our institution’s greatest strengths and will continue to enable discoveries and innovations whose impact reaches far beyond the boundaries of our campus.”

Harvard ended fiscal 2024 with an operating surplus of $45 million, compared to $185.5 million the previous year. Revenue rose 6 percent, or $375 million, but expenses increased 9 percent, or $515 million, primarily due to salary increases and the hiring of more employees.

In the report, Harvard leaders noted, “Research universities across the country face similar challenges, with rising labor costs, higher operating costs and greater burdens from regulatory and oversight requirements.”

This is the second year in a row that spending has exceeded revenue, which is “not a sustainable path in the long term,” Ritu Kalra, Harvard's chief financial officer, told the Harvard Gazette.

“The pace of our recent spending underscores the need to exercise caution going forward,” Kalra said. “Although it was effective in the short term, without corresponding sales growth it will not be sustainable in the long term.”

Harvard declined to make Kalra available for an official interview with the Globe.

According to the annual report, the university increased student financial aid by 4.8 percent to $891.8 million in fiscal year 2024. About a quarter of students pay nothing to attend university. To help middle-income students, Harvard caps tuition at 10 percent of annual income for families with annual incomes between $85,000 and $150,000.

Harvard's large endowment enables the university to offer generous financial support, and the fund supports 37 percent of operating revenue. Tuition, room and board generated 21 percent of revenue in fiscal year 2024.

The university also invested in its technology infrastructure this year, including expanding access to artificial intelligence capabilities and launching efforts to make its library collections more accessible to scholars and students around the world.

Harvard's endowment exceeded the Massachusetts Institute of Technology's 2024 investment growth of 8.9 percent and Dartmouth College's 8.4 percent growth. It lagged Brown University's investment gains of 11.3 percent.

NP “Narv” Narvekar, chief executive of Harvard Management Company, which oversees the foundation, said in the report that Harvard “has a lower tolerance for risk than many of our largest private university peers, which can lead to delays in busy environments, but also offers.” Protection during downturns.”

Narvekar said his team reviewed the university's risk tolerance when he first joined the management company and approved a “moderate increase in portfolio risk” in 2021, which has since “strengthened returns.” He added that his team remains in discussions with university leadership “to determine whether future increases in risk tolerance are warranted.”

Harvard's endowments are heavily invested in private equity and hedge funds; Natural resources account for less than 1 percent of the fund's allocation.

Ratings agency S&P gave Harvard its highest bond rating of “AAA” earlier this year, citing its “exceptional financial resources,” “strong demand for academic programs,” and “very strong fundraising ability.”

Hilary Burns can be reached at [email protected]. Follow her @Hilarysburns.