Harvard Boosts MBA Support To $33 Million

REVENUE FROM UNRESTRICTED CURRENT USE GIFTS HIT A RECORD $36 MILLION

Even more impressive, however, was the amount of money HBS raised for what it called “current use giving.” “Driven by the HBS community’s generosity, recent restricted and unrestricted current use giving to HBS has been nothing short of extraordinary, growing from a total of $26 million five years ago to $63 million in fiscal 2015,” said Melnick. “Fiscal 2015 was a strong year for unrestricted current use giving to HBS. Including campaign giving as well as reunion and annual giving, revenue from unrestricted current use gifts in fiscal 2015 grew by $8 million, or 29%, from the prior year to a record $36 million.”

The school said its total revenue for 2015 of $707 million, up from $676 million a year earlier, exceeded forecasts. Cash flow increased from fiscal 2014, and HBS ended the year with a larger unrestricted reserves balance than expected–some $125 million, up from $99 million in fiscal 2014. HBS’ publishing operations, including the sale of a record 13.2 million case studies, brought in $203 million in revenue, while the school’s executive education unit reported $168 million in revenue. Endowment distributions to revenue accounted for $127 million, while MBA tuition and fees came to $120 million.

For the first time, Harvard reported that it had booked $5 million in revenue on HBX, its online digital learning initiative. But HBX racked up expenses more than three times the revenue, totaling $16 million. The result: An operating deficit of $11 million. The school conceded that it anticipated still higher expenses this year, saying flatly that HBX HBX is “not expected to contribute positive operating margin in the near term.”

A DROP IN THE RESEARCH PRODUCTIVITY OF HARVARD BUSINESS SCHOOL FACULTY

Besides running HBX that deeply in the red, there were other surprises in the report as well. Harvard disclosed that the research productivity of its faculty declined in teaching materials, research articles, and books last year, despite increasing spending on research (see table below). HBS said the number of teaching materials produced fell to 544 from 617 a year earlier, while the number of research articles fell to 183 from 193, and books declined to 13 from 18. That’s despite a research budget of $123 million, up from $117 million a year earlier, though the full-time equivalent faculty was 231, down from 234 in fiscal 2014.

Student tuition and fee revenue from the MBA program grew to $120 million, from $113 million in fiscal 2014. First-year MBA tuition in fiscal 2015 was $58,875, compared with $56,175 last year. The school said that its combined tuition and fees for fiscal 2015 were near the midpoint among the seven peer schools tracked by HBS. The report noted that tuition and fee revenues “do not fully recover MBA program operating expenses at HBS, much less the school’s long-term investments in academic innovation. The shortfall is offset primarily with income from gifts given by alumni and friends of the school.”