Kellogg | Mr. Engineer Volunteer
GMAT 710, GPA 3.8
Kellogg | Mr. Operations Analyst
GMAT Waived, GPA 3.3
Kellogg | Mr. Double Whammy
GMAT 730, GPA 7.1/10
Kellogg | Mr. Defense Engineer
GMAT 760, GPA 3.15
Cornell Johnson | Mr. Indian Dreamer
GRE 331, GPA 8.5/10
McCombs School of Business | Mr. Ernst & Young
GMAT 600 (hopeful estimate), GPA 3.86
Kellogg | Mr. Innovator
GRE 300, GPA 3.75
London Business School | Ms. Private Equity Angel
GMAT 660, GPA 3.4
Harvard | Mr. Defense Engineer
GMAT 730, GPA 3.6
Chicago Booth | Ms. Indian Banker
GMAT 740, GPA 9.18/10
Harvard | Ms. Developing Markets
GMAT 780, GPA 3.63
Yale | Ms. Biotech
GMAT 740, GPA 3.29
McCombs School of Business | Mr. Marine Executive Officer
GRE 322, GPA 3.28
Stanford GSB | Ms. Global Empowerment
GMAT 740, GPA 3.66
Chicago Booth | Mr. Bank AVP
GRE 322, GPA 3.22
Harvard | Mr. Renewables Athlete
GMAT 710 (1st take), GPA 3.63
Stanford GSB | Mr. Infantry Officer
GRE 320, GPA 3.7
UCLA Anderson | Ms. Apparel Entrepreneur
GMAT 690, GPA 3.2
Harvard | Mr. Armenian Geneticist
GRE 331, GPA 3.7
Berkeley Haas | Mr. 1st Gen Grad
GMAT 740, GPA 3.1
Ross | Mr. Travelpreneur
GMAT 730, GPA 2.68
London Business School | Ms. Numbers
GMAT 730, GPA 3.5
IU Kelley | Mr. Fortune 500
GMAT N/A, GPA 2.2
N U Singapore | Mr. Naval Officer
GMAT 710, GPA 3.2
NYU Stern | Ms. Entertainment Strategist
GMAT Have not taken, GPA 2.92
INSEAD | Ms. Spaniard Consultant
GMAT 710, GPA 8.5/10.00
NYU Stern | Mr. Army Prop Trader
GRE 313, GPA 2.31

The World’s Highest Earning Business Schools

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You know the saying: ‘Money talks and BS walks.”

Well, in the business school world, the money is the revenue a school actually takes in on an annual basis. The BS is the slick promotional websites and the flawed rankings that obsessively dominate much of the talk about which school is better than another.

So when it comes to the money, which school comes out on top? It’s hardly a surprise that Harvard Business School is solidly No. 1. What’s shocking is by how much. HBS’ total revenues last year were $707 million. That’s almost two and one-half times that of the second business school which racked up the second highest revenue in the world: the University of Chicago’s Booth School of Business, which brought in $288 million in revenue in 2015. Yet, Harvard did it with 2,012 students vs 3,297 at Booth–while the two-year tuition bill is roughly $120,000 at both schools and Harvard gave out more money in scholarships. So how is this possible?

TUITION AND FEES ARE ONLY ONE OF FOUR SOURCES OF REVENUE

Although the typical business school sources the majority of its revenue from its students, some prominent schools have created other revenue streams which can actually generate more money than their degree programs. In fact, Harvard generated more money from executive education ($168 million), philanthropy ($190 million), and other sources, mainly the sale of case studies, ($229 million) than it did from tuition and fees for its MBA program ($120 million). On any level, that is an extraordinary exception to the rule. At HBS, tuition and fees amount to only 17% of revenue. At Wharton, Chicago, MIT and Columbia, tuition is relied upon for more than half of those school’s revenue.

Many schools, of course, rely on executive education as an important and sometimes growing source of money. At INSEAD, 44% of revenues came from non-degree executive education programs vs 41% coming from its degree programs. This is similar to the European School of Management and Technology (ESMT) in Berlin, with 37% of revenues coming from executive education programs and 20% from its degree program, and to Spain’s ESADE which generated 40% of revenues from executive education and 43% from traditional degree programs.

Where U.S. and European business schools differ is in their philanthropy. Not only do U.S. business schools carry endowments worth more than $100 million, and in some cases even more than $1 billion, they also boast successful fundraising campaigns and a much higher class participation in such campaigns. The exception to this rule would be INSEAD and ESMT. Harvard Business School benefits the most from philanthropy overall, followed closely by Stanford GSB and Booth at the University of Chicago.

ADJUSTING FOR SIZE, STANFORD IS THE GREATEST BENEFICIARY OF PHILANTHROPIC SUPPORT

If there is one business school (and university) that stands out in their success with fundraising campaigns, it is Stanford. Although HBS’s endowment is three times the size of Stanford’s, the GSB manages to attract enough sponsors, alumni, and other philanthropists to make up for the difference. On a per student basis, philanthropy at GSB and HBS is roughly $100,000 every year, which is almost twice as much as the tuition sticker price of $60,000. If philanthropy at HBS and the GSB did not exist, students would have to pay $160,000 in tuition every year (the total tuition for the two years would be about $320,000, not $120,000) for the schools to maintain their budgets. Although students tend to focus on scholarships, they may fail to realize that at GSB and HBS, a $100,000 “scholarship” is already effectively baked in to their yearly tuition, which is made possible by the generosity of generations of successful alumni and friends.

Other sources of revenue are side businesses at private schools and government funding at public schools. Harvard Business Publishing generated $203 million in 2015, selling more than 12 million case studies to business schools and corporate learning centers all over the world. Chicago Booth generated $31 million  from the Center for Research in Security Prices (CRSP), which generates revenues through subscriptions and indexes. On the public side, the most heavily subsidized business school in this survey is HEC Monreal, generating 71% of revenues through other sources, most of which is from government support. Other schools receiving government support, although to a lesser extent, include UT-Austin (McCombs) and Indiana (Kelley).

Where does the cash go? The overwhelming majority of all this money goes to fulfilling the mission of the business school, which is done mostly through faculty as well as the backstage team of administrators who help admit candidates, insure that they stay on track throughout the program, and then help to place them in lucrative post-MBA jobs. Student to faculty ratios will differ among business schools, but another big difference is compensation. Business school faculty at schools with large sources of revenue rival the compensation of senior executives at Fortune 500 companies. At HBS, for example, Vilangadu G. Narayanan, a management accounting professor who is also chair of HBS’ elective curriculum, and Paul M. Healy, a finance professor who is also senior associate dean for faculty development, earned $638,940 and $606,618, respectively, in fiscal 2014.

The bottom line is this: Schools that produce outsized revenues have unusual advantages to maintain their excellent value propositions over the long term to both students and alumni–and to sustain repetitional capital during the highs and lows of economic cycles. While rankings do ultimately matter to reputation, money really talks. And the BS truly walks.

(See following page for our exclusive analysis of business school annual revenue).

About The Author

John A. Byrne is the founder and editor-in-chief of C-Change Media, publishers of Poets&Quants and four other higher education websites. He has authored or co-authored more than ten books, including two New York Times bestsellers. John is the former executive editor of Businessweek, editor-in-chief of Businessweek. com, editor-in-chief of Fast Company, and the creator of the first regularly published rankings of business schools. As the co-founder of CentreCourt MBA Festivals, he hopes to meet you at the next MBA event in-person or online.