Harvard Calls On Its B-School To Help Plug University’s Budget Gap

It’s an open secret in higher education: business schools are among the biggest cash cows on any university campus. So when Harvard University’s finances began buckling under federal funding cuts and endowment pressures last year, it turned, predictably, to Harvard Business School.

According to The Harvard Crimson, which obtained notes from a November 2025 internal presentation, Harvard asked HBS to raise its surplus contribution to the university’s consolidated operating results for fiscal year 2026 – a target that climbed over the summer from roughly $60 million to $82 million. A subsequent April presentation projected a university target of $97 million for fiscal year 2027.

“Given the many challenges to the university’s financial model in recent years,” HBS spokesperson Brian Kenny told The Crimson, “every school is being asked to do what it can to improve the overall picture.”

THE LEVERS HBS IS PULLING

For a school generating roughly $1.1 billion in annual revenue – drawn largely from executive education, publishing, MBA tuition, and endowment distributions – the mandate was not exactly existential. But it has meant real belt-tightening: According to The Crimson, HBS outlined $29 million in expense cuts and additional revenue for fiscal year 2026, including salary and benefits reductions of $4 million; deferred IT projects worth $2 million; and planned cuts to catering, travel, and events.

The squeeze has been felt on the ground. Faculty support specialist Cameron Wetzel told The Crimson that after a colleague left and wasn’t replaced, Wetzel’s workload jumped from three or four faculty members to six.

Nevertheless, HBS enters this period from a position of relative strength. Unlike schools that draw heavily on federal research awards, federal funding makes up a small share of HBS’s revenue – giving it a buffer that, say, Harvard’s Faculty of Arts and Sciences does not enjoy.

HEADWINDS ON MULTIPLE FRONTS

The surplus push comes as some of HBS’s most dependable revenue streams are under pressure. Harvard Business Publishing – one of the school’s largest revenue sources – was projected to come in roughly $10 million below its $303 million budget for fiscal year 2026, The Crimson reports, driven in part by an 8% drop in paid Harvard Business Review circulation and weaker advertising and book sales.

International enrollment is another watch item. International students make up about 37% of the HBS Class of 2027, and roughly 70% of executive education participants come from outside the U.S. Dean Srikant M. Datar told faculty last semester that international applications had declined by double digits amid the Trump administration’s visa restrictions – a figure HBS confirmed, though it noted the data weren’t yet final.

ALUMNI MONEY – AND ALUMNI ANGER

On the fundraising front, the picture is mixed: New gifts and pledges fell from $145 million in fiscal year 2024 to $121 million in fiscal year 2025, but The Crimson reports that HBS is on track to raise close to $200 million in fiscal year 2026. Some donors, in fact, increased their giving in response to the Trump administration’s pressure on Harvard.

Others cut theirs to $1. A contingent of alumni remains angry over what they see as HBS’s inadequate response to Hamas’s October 7, 2023, attack on Israel and subsequent pro-Palestinian campus protests – a rift that shows no sign of closing. As alumnus Jason E. Klein tells The Crimson: “The dean has a lot of work to do.”

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