CFO Hollister Predicts Harvard’s Second Consecutive Year of Declining Revenues for First Time Since Great Depression


Vice President for Finance and Chief Financial Officer Thomas J. Hollister offered a bleak projection of the University’s finances in a Tuesday interview with The Crimson, forecasting that Harvard will experience its second consecutive year of declining revenues for the first time since the Great Depression of the 1930s.

Ever since Covid-19 upended the University’s operations, Harvard has struggled to balance its checkbook as it racks up pandemic-related expenses. The University’s revenue also dropped by $138 million in fiscal year 2020, for a net loss of $10 million, compared to a surplus of $308 million in 2019.

Hollister said he expects revenues to decline once more in 2021, although he declined to offer a specific estimate, citing uncertainty over revenues and expenses for the remainder of the fiscal year.

“It does look as if it’s highly likely we’ll have two years in a row of declining revenues,” Hollister said. “We haven’t seen that at the University since the depression in the 1930s.”


Hollister nonetheless praised the University’s decision to forgo layoffs of direct employees and furloughs altogether.

“A number of colleges and universities, unfortunately, had to resort to layoffs in higher education,” Hollister said. “At one point a year ago, roughly 30 million Americans had lost jobs, and Harvard, fortunately, has not had to have any job layoffs.”

“It’s a great credit to the entire Harvard community. Everyone has been terrific at managing our expenses, and that has made a huge difference,” he added.

Early on in the pandemic, University officials decided to offer an early retirement program to staff as a way to mitigate layoffs and cut costs, setting aside $71 million for the initiative. The program provided eligible staff who opted to retire early an additional benefit equal to one year of their wages.

Out of almost 1,600 eligible employees, nearly 700 staff members opted to retire early, according to a September 2020 letter from University President Lawrence S. Bacow, University Provost Alan M. Garber ’76, and Executive Vice President Katherine N. Lapp.

Hollister declined to comment on whether the University would continue other cost-cutting efforts such as discretionary spending cuts, hiring freezes, and reductions in capital spending.

“Budgeting for this year was an adventure for everyone, because there was so much uncertainty,” Hollister said. “We need to remain very careful, because it is so dynamic and uncertain still.”

While major capital projects such as the Adams House renewal remain on track, other initiatives across the University have been cut or slowed down, according to Hollister.

“Everyone has tried to reduce spending in every category including capital spending,” Hollister said. “There are dozens and dozens of projects across the university and in laboratories, in athletics, in classrooms — projects of all kinds.”

Hollister said the University expects its finances to improve as Harvard plans to welcome back faculty, staff, and researchers on Aug. 2, and students later that month.

“The schools and units are in the midst of budgeting right now for the coming year,” Hollister said. “Having more students on campus will be helpful to revenues such as tuition, and room and board.”

Hollister said the University is nonetheless planning for accompanying costs incurred in the transition back to in-person instruction.

“We do expect increased financial aid to be one example, certainly ongoing testing and tracing costs to campus safety and labs, classroom reconfigurations, technology support are all examples of increased costs in managing the pandemic,” Hollister added.

Hollister emphasized that Harvard has sought to protect its educational and research initiatives throughout the pandemic. He cited financial aid for undergraduate students, funding for research efforts, and stipends for graduate students as examples of programs the University has maintained over the course of the past year.

“Harvard is about students, faculty, academics and researching,” Hollister said. “We’ve focused on trying to reduce all other discretionary spending, but trying to limit as much impact as possible on teaching and research.”

—Staff writer Virginia L. Ma can be reached at

—Staff writer Kevin A. Simauchi can be reached at Follow him on Twitter @Simauchi.