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Harvard Medical School Dean George Q. Daley ’82 said the University’s central administration had instructed him to cut spending on the Medical School’s research enterprise by at least 20 percent by the end of the fiscal year in his annual State of the School address Wednesday morning.
The school is “on track” to hit that target, Daley said.
Daley’s speech was a public nod to the continued uncertainty facing HMS even after a judge struck down the Trump administration’s funding freeze to Harvard at the beginning of the month. HMS has spent the past seven months reeling from funding cuts that froze approximately $230 million in grants to the school, which relies heavily on federal dollars.
Weeks after the judge’s order, with researchers still waiting to receive funds and the Trump administration vowing to appeal, the school has yet to see relief from the cuts. And the administration may try to slash budgets at agencies like the National Institutes of Health and National Science Foundation — or redirect funds toward its own political priorities.
Daley said he was reassured by bipartisan efforts in Congress to head off President Donald Trump’s proposals to decimate agency budgets, but that grim prospects for federal funding over the next few years meant the school would not back off from planned austerity measures.
“Given the dark clouds hanging over — not only Harvard’s federal grant dollars, but all of NIH — reducing our research spending and focusing on our most critical research is the responsible thing for us and other institutions to do,” he added.
Daley said he also worried the government would impose new limits on the reimbursement rate that universities receive from the NIH to cover overhead costs — on the heels of a failed effort this spring to limit indirect cost reimbursements to 15 percent of direct research spending. If the lower cap had been in place last year, Harvard, which receives an average indirect cost rate of 69 percent, would have lost more than $100 million compared to what it actually took in.
An increase in the endowment tax, which Congress hiked from 1.4 percent to 8 percent this summer, will also cut into HMS’s revenue, Daley said.
He said that with federal sponsorships in limbo, HMS will place a “greater priority on securing non-federal sources of support.”
After federal funding for HMS’s M.D.-Ph.D. program was terminated, the school raised more than $8 million to support the program, according to Daley. He added that HMS received donations from almost 4,000 individuals since April — 700 of which had never donated to the school before.
Those contributions include a $30 million gift from philanthropist K. Lisa Yang to establish a new center to research brain-body signaling, announced by Daley on Wednesday, and a roughly $19 million gift from billionaire Leonard V. Blavatnik, announced over the summer.
“As we contemplate the future of our research enterprise, we must bear in mind that the model of support from the National Institutes of Health and other federal agencies is no longer a given,” Daley said. “Nor is it the only way that we will be able to succeed in the future.”
But lost federal funding will be hard to replace. In fiscal year 2024, HMS took in more than $230 million from federal grants — representing 73 percent of research funding and nearly a third of operating revenue. The projected total for fiscal year 2025 increased to $251 million.
Over the short term, HMS is also drawing on bridge funding from Harvard’s central budget.
The University is set to contribute $90 million in research sustainability funding, which HMS plans to match with $120 million in bridge funds from the school’s level.
HMS projects that bridge funds — in combination with labs’ rainy day funds and departmental discretionary funds — will make it possible for the school to sustain an average of 74 percent of federal sponsored research activity through the upcoming fiscal year. The funds will also allow HMS to support its M.D.-Ph.D. students and junior faculty for the rest of the year.
“I wish it could be more,” Daley said.
The Medical School is taking “proactive measures to retain our institutional resilience,” Daley said — including deferring approximately $50 million dollars of capital projects.
Schools across Harvard began reviewing planned capital spending in March, and University budget guidance over the summer instructed its units to further cut spending in anticipation of “long-lasting declines” in revenue.
Daley said he would do what he could to mitigate the Trump administration’s attacks on international students at Harvard, which have been temporarily halted by a federal judge.
“I resolve to maintain our right to educate, to train and employ the most talented individuals at Harvard Medical School and to sustain our commitment to recruiting and nurturing the remarkable students who come to this community from all parts of the globe to learn and to serve,” Daley said.
Daley did not refer to Trump by name. But he criticized the administration’s funding cuts and attacks on the credibility of scientists.
“When scientists are not respected, when scientific reasoning is not the basis for rendering sound policy on matters of public health, we again collectively become susceptible to the return of diseases which science itself had long eradicated,” Daley said.
Daley described the uncertainty and anxiety at HMS as painful, but said that restructuring would be necessary to confront a future where HMS could no longer rely on the federal government for support.
“As heartrending as this is, we have to adjust,” he said.
–Staff writer Abigail S. Gerstein can be reached at abigail.gerstein@thecrimson.com. Follow her on X @abbysgerstein.
—Staff writer Ella F. Niederhelman can be reached at ella.niederhelman@thecrimson.com. Follow her on X @eniederhelman.
