{shortcode-a0fafb3727a5405eac46bd1741f1eafab86bbf7e}arvard released its Annual Financial Report on Thursday, which offers a rare glimpse into the University’s finances and investment strategy. Here’s a closer look at the data revealed by this year’s disclosures.

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Harvard and many of its peer institutions experienced low returns in fiscal year 2023, with most large endowments reporting investment gains of less than 5 percent. Among its peer institutions, Harvard performed relatively well, reporting a 2.9 percent endowment return. The returns lag only those of Stanford and Columbia, among schools who have reported fiscal year 2023 results thus far, which achieved returns of 4.4 percent and 4.7 percent, respectively.

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Harvard’s endowment now stands at $50.7 billion, down from $50.9 billion in fiscal year 2022. Under current Harvard Management Company CEO N.P. “Narv” Narvekar, who began his tenure in December 2016, the asset allocation of the endowment has shifted heavily towards alternative investments, such as private equity and hedge funds, and away from public equities.

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The University achieved a $186 million budget surplus – less than half of last year’s value.

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Almost half of Harvard’s revenue in fiscal year 2023 came from current use gifts and endowment distributions, making philanthropy the largest revenue source for the school. Philanthropy has consistently been the largest revenue source for Harvard over the past 20 years.

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The primary driver for the decline in budget surplus was a 9 percent increase in operating expenses – almost twice the revenue growth rate – fueled by inflation and full-capacity campus operations.

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Distributions from Harvard’s endowment contributed $2.2 billion to the school’s operating expenses, or 37 percent of its total revenue. Consistent with past trends, the schools that relied most on endowment distributions for their revenue were the Radcliffe Institute for Advanced Study, Harvard Divinity School, and Faculty of Arts and Sciences.

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The Faculty of Arts and Sciences has $20.4 billion in endowed funds, which is more than any other school or department. Harvard’s endowment is an aggregate of more than 14,000 funds, many of which are earmarked for specific uses.

—Staff writer Krishi Kishore can be reached at krishi.kishore@thecrimson.com. Follow him on X @tweetykrishi.

—Staff writer Rohan Rajeev can be reached at rohan.rajeev@thecrimson.com. Follow him on X @rohanrajeev_.