4.2 percent of Harvard University's operating budget comes from non-federal sponsored sources.

Part II of a two-part series examining how the looming cuts in federal funding could impact research at Harvard. Part I ran on Feb. 25.

Anticipating unprecedented cuts in federal funding, researchers and administrators at Harvard are faced with the challenge of making ends meet.

The looming cuts, known as sequestration, will be triggered automatically if lawmakers do not reach a budget agreement by March 1 and could cost Harvard millions of dollars in annual revenue.

Regardless of what happens on Capitol Hill this week, Harvard will have to contend with decreased revenue from federal agencies by reevaluating its reliance on different sources of income.

Marshaling the help of administrative offices, faculty members, and researchers across the University, Harvard is already exploring possible solutions.

“There are different ways in which we are planning for and responding to these changing circumstances,” said University President Drew G. Faust.

Harvard’s solutions largely fall into two categories—cost-cutting by maximizing the efficiency of existing operations and revenue-generating by finding ways to stand out in what is an increasingly competitive pool of grant applicants and diversifying sources of sponsorship.

Still, researchers worry that Harvard’s cost-cutting efforts may jeopardize their work and fear that Harvard’s revenue generating measures, particularly private sponsorship, may not be worth the attached strings.

TIGHTENING THE BELT

Researchers are exploring a variety of methods aimed at cutting spending in an effort to preempt the potentially unprecedented cuts to University federal funding. Last fiscal year Harvard received over $650 million from Washington.

One of these solutions may be hiring fewer researchers in the future, according to Stem Cell and Regenerative Biology professor Jeffrey D. Macklis.

“I’m thinking that if this is the trajectory of the federal budget...then perhaps I’m going to be a little less welcoming to that superstar from Germany, or that superstar from California,” Macklis said.

According to the Office of Sponsored Programs’ annual report, compensation—including salaries, wages, and fringe benefits—comprised approximately 30 percent of Harvard’s total costs in fiscal year 2012.

“If there’s less federal funding, the entire system will be able to support fewer investigators,” said assistant biology and computer science professor David D. Cox ’00.

Cost-cutting may also take the form of reductions in significant equipment purchases. Many researchers have already begun to be more frugal in their expenditures.