Harvard Boosts MBA Support To $33 Million

Source: 2015 Harvard Business School Financial Report

HARVARD PAID ITS PROFESSIONAL STAFF, INCLUDING FACULTY, $294 MILLION LAST YEAR

Against the revenues of $707 million, the school’s total operating expenses were $660 million, up by $15 million, or 2.3%, from the prior year. This increase was primarily driven by spending aimed at positioning HBP and HBX for future growth, and was partially offset by decreased expenses in Executive Education. The biggest expense item, of course, was employee compensation, comprising more than 40% of total operating costs.

HBS said its salaries and benefits expense increased 7% in fiscal 2015 to $294 million, from $276 million in the prior year. Full time equivalent faculty fell by three positions to to 231 last year, from 234 FTEs a year earlier. HBS also continued to expand its administrative staff, which grew to a budgeted 1,541 FTEs, from 1,447 in fiscal 2014.

Of the $44 million spent on fellowships, HBS said that it treats such funding as an expense line item. “Making education at HBS affordable to a broader cross-section of applicants, regardless of their country of origin or their financial resources, is a long-standing goal of the school,” according to the financial report. “The prospect of entering or returning to the workforce with high levels of education debt can deter strong MBA candidates from applying to HBS and can restrict their career choices upon graduation. This is particularly true for younger students, women, those from outside the United States, and students whose early career paths have not enabled them to reduce their undergraduate loans. Consequently, one of the school’s long-standing goals is to assist students in minimizing their debt at graduation by ensuring that fellowship support at least keeps pace with tuition and fees.” Funding for fellowships comes from restricted endowment.

HBS said it paid the university assessments of $20 million to cover such services as payroll and benefits administration, the processing of accounts receivable and payable, and legal services. That was an increase over the previous year of $1 million.

Source: 2015 Harvard Business School Financial Report