HARVARD BUSINESS SCHOOL RAISED A RECORD $1.4 BILLION DURING ITS SEVEN-YEAR CAMPAIGN
The school noted that fiscal 2018 marked the conclusion of The Campaign for Harvard Business School, a seven-year effort that resulted in 59% MBA alumni participation and 26,000+ donors. “In addition to surpassing its financial goal, the Campaign achieved milestones in all four of its non-fundraising objectives, including alumni engagement, student and young alumni focus, support for One Harvard, and building the narrative about the role of HBS and business in society,” according to the report.
“Of the $1.4 billion in endowment and current use gifts raised through the Campaign, $1.1 billion had been received by the school as cash at year-end fiscal 2018. Outstanding pledges totaled $317 million. Endowment giving to the Campaign strengthened the school’s core programs by creating an impressive number of new associate professorships and fellowship funds.”
“Current use giving to the HBS Fund was a key Campaign objective,” the report added. “HBS alumni and friends rose to the challenge with enormous generosity, achieving the school’s $40 million target three years after the Campaign’s public launch in fiscal 2013. HBS Fund gift income has doubled since then, growing from $22 million in fiscal 2013 to $44 million this year. Restricted current use giving has grown nearly 67 percent during the same five-year period, providing seed funding for HBS Online, the Harvard Innovation Labs ecosystem, MBA innovation including Field Immersion Experiences for Leadership Development, and other strategic initiatives.”
‘THERE ARE AMPLE REASONS FOR CAUTION’
Melnick, however, expressed some caution for the near-term and the risk of a new recession. “The next fiscal year at HBS will be the 10th since the Great Recession,” he noted. “The school’s financial health has improved over the past decade, as has the health of the global economy. Each additional year of recovery, however, makes it increasingly important to prepare for a potential reversal of today’s generally favorable economic conditions.
“Looking back at the school’s financial performance in fiscal 2009—when the economy last hit bottom—there are ample reasons for caution. The HBS revenue sources that were most directly affected by the Great Recession—HBP, Executive Education, and current use giving—have grown substantially. Raising the stakes further, fixed costs at HBS today are significantly higher than they were in fiscal 2009. Continued investment in core activities and strategic innovation have expanded the school’s operating footprint. Our IT infrastructure is larger and more complex. New buildings have added more than 300,000 square feet of learning and residence space to the campus, leading to higher maintenance, repair, and depreciation expenses.
“With these realities in mind, we developed our fiscal 2019 financial plan with the goal of strengthening the School’s resilience in the event an economic downturn materializes. We will continue to closely monitor the school’s actual financial performance versus budget as the year unfolds. Contingency plans for spending are in place should revenues fall short, and, as in recent years, the year’s top-line performance may turn out better than we had anticipated.”