John Harvard's Journal fessors as they arrived at University Hall for teractions between during the last cam- the November faculty meeting. “Today, we Overseers and the paign by a petition are asking you to advocate for us,” their flier Undergraduate slate, in 2016—and read. “As FAS debates this critical question, Council (UC) and begins obviously, by we hope you keep in mind how important the Harvard Gradu- building on a base this issue is to us as students who will live ate Council (HGC). of motivated divest- through the increasing dangers of the cli- One perspective the ment advocates. mate crisis. We need a just, rapid transition younger Overseers For full back- to a decarbonized economy, which is why might inject, if pe- ground on Harvard Harvard must cut its financial ties to the tition candidates Forward, the slate fossil-fuel industry….” make the ballot and of petition candi- The alumni correspondents have appar- are elected, is fossil- dates, and alumni ently found a way to tap that energy. They fuel divestment. and student di- informed Bacow and Lee that “we are work- Their effort brims vestment state- ing to engage a broad coalition of alumni with digital-era communications and cam- ments, see harvardmag.com/overseers- who, like us, recognize the urgency of now. paign savvy. Within days of the announce- challenge-slate-19. Given wide agreement We have hired organizers to help us reach ment, Harvard Forward had secured UC on the urgency of addressing climate change, and communicate with alumni”: Canyon and HGC endorsements, a high-profileBos - and sharp disagreement within the commu- Woodward ’15 and Chloe Maxmin ’15, vet- ton Globe op-ed in favor of the campaign, and nity over how to do so, the issue promises eran undergraduate Divest Harvard lead- times and venues for a baker’s dozen in-per- to resonate. It will be equally interesting to ers, have been retained, for 30 and 10 hours son meetings around the United States and see whether, at the same time, the Univer- a week, respectively. in Mexico to talk about the initiative and ad- sity and the faculties find their way toward a That focus on organizing aligns with the vance the proposed slate of candidates’ peti- more concerted effort, across the institution, correspondents’ final point: “We think that tions to get on the ballot. With the advent of to support research and teaching on climate the University should use its existing in- online voting last year, the potential exists to change and sustainable forms of energy. stitutional resources such as the Board of galvanize a significantly higher turnout than vjohn s. rosenberg Overseers and its range of alumni councils to help the University adjust to and target its financial resources to the growing climate to about $5.5 billion (up 5.7 percent), in part crisis.” Although 3,000-plus supporters is The Black…and the Red reflecting slightly less stern restraints on just a percent or so of the alumni at large, it Harvard achieved its sixth consecutive distributions from the endowment, Har- is a significant slice of potential voters in a budget surplus—some $298 million, up from vard’s largest source of revenue (35 percent Board of Overseers election, where partici- $196 million in the prior year—according to of the total). Expenses rose by almost $200 pation is typically a low-teens percentage the University’s annual financial report for million, to $5.2 billion (3.9 percent). Pres- of those eligible. the fiscal period ended June 30, 2019, pub- ident Lawrence S. Bacow’s introductory lished in late October. The surpluses realized letter acknowledged the evident strength, An Overseers Challenge Slate from fiscal 2014 through the most recent year but cautioned that “we, along with all of And there may well be such a contest now total $769 million—the happy result of our colleagues in higher education, must this year. In early November, Harvard For- the proceeds from the $9.62 billion Harvard be conscious of the challenges of our cur- ward announced a campaign, organized by Campaign, a continued benign U.S. economic rent climate,” including an inevitable end Nathán Goldberg ’18 environment, and internal spending restraint. of the economic expansion; the new federal and Danielle Strasburg- That cushion—surely the envy of other insti- taxes on university endowments (for which er ’18, advocating chang- tutions of higher education—provides some Harvard made an estimated $50-million pro- es in University gover- protection against economic or financial ad- vision in fiscal 2019); and uncertain federal nance—and fossil-fuel versity, and creates flexibility in paying for funding for research. divestment. Strasburg- the continuing campus construction boom. Digging a bit deeper, student income totaled er, the campaign manag- It may also serve as a bridge during the mul- $1.2 billion. Given continued torrid growth er, and Goldberg, strate- tiyear effort to strengthen the performance of in executive- and continuing-education rev- gist and policy adviser, the endowment, the foundation of the Uni- enues (up 12 percent), this is now a half- are broadly interested versity’s economic model. The accompanying billion-dollar business, a distinguishing fea- in youth engagement. report from Harvard Management Company ture of Harvard’s operations compared to Danielle They have formulated (HMC) indicates both the magnitude of un- peer institutions. Those fees now essentially Strasburger a platform that would derperforming endowment assets, and the equal revenue (net of financial aid) from all reserve six seats on the time it will take to reinvest the portfolio in undergraduate and graduate degree pro- 30-member Board of Overseers for recent pursuit of hoped-for enhanced returns. grams. The endowment distribution rose nearly graduates of the College and the gradu- $90 million (4.7 percent), to a bit more than ate schools; limit voting on those seats to Budget Highlights $1.9 billion: a Corporation-approved 2.5 per- younger alumni; and promote formal in- Revenue increased nearly $300 million cent increase per unit owned by each school,

22 January - February 2020

Reprinted from . For more information, contact Harvard Magazine, Inc. at 617-495-5746 plus growth reflecting earnings and distri- butions from new gifts (emanating from The Harvard Campaign and subsequent philan- thropy). A similar 2.5 percent increase per Explore More endowment unit owned is budgeted for the ; current fiscal year, plus incremental distri- Harvardmagazine.com brings you butions from gifts and other additions to the endowment. Sponsored research revenue continuous coverage of University and alumni news. rose modestly to $937 million, with federal Visit to find these stories and more: grants weaker than those from foundations, “Smarter, Stronger, Kinder” corporations, and individuals. Sesame Street celebrates a 50-year collaboration In part, Harvard got lucky in fiscal 2019. with Harvard. Continuing and executive education was harvardmag.com/sesame-st-19 more robust than anticipated. Current-use giving, expected to tail off after the cam- paign, in fact increased modestly, as a large Harvard and Life Sciences Partners to payment to fulfill a pledge came in at year- Build a Center for Biological Therapies end. And there was a large royalty payment A new center will bring cutting-edge medicines for the use of intellectual property. “from laboratory to approved therapy.” About half of expenses are for compensa- harvardmag.com/biotherapies-19 tion. Wages and salaries rose 4.9 percent, accelerating from fiscal 2018, reflecting pay “Stories Are Powerful” increases and additional employees—many Harvard and the University of Michigan’s second of them on term agreements related to re- joint summit on opioids addresses stigma, race, search funding, or in growth areas like con- and access to care. tinuing and executive education. Employee- harvardmag.com/opioids-summit2-19 benefits costs appear to have decreased. In fact, benefits for active employees are being visit harvardmagazine.com COURTESY OF LISA ABITBOL/HARVARD CHAN SCHOOL constrained by higher deductibles and coin- FROM TOP: COURTESY OF THE HARVARD GRADUATE SCHOOL OF EDUCATION; ILLUSTRATION COURTESY GAZETTE OF THE HARVARD surance put in place in recent years; retiree costs have been lower than expected; and an nual financial statement revealed that it has receivable increased by nearly $600 million in annual accounting adjustment this year had been authorized to spend $960 million so fiscal 2019, suggesting several major gifts in the effect of reducing the reported expense. far on House renewal, a sum that will ap- the pipeline, at least. An accounting change Capital spending totaled $903 million—on parently take it through perhaps one-third somewhat bolstered this year’s report, but pace with the record $908 million in fiscal of the Adams House work. Extrapolating, the salient fact is that total pledges receiv- 2018 and $906 million the prior year. The completion of Adams might bring the bill able increased by more than $900 million— University expected to have to borrow to to $1.1 billion to $1.2 billion, for about 1.05 after the Harvard Campaign. pay for all the large projects under way million gross square feet of space: an indi- On balance, the surpluses and pledge (Lowell House renewal is complete, and Ad- cation of just how costly it is to do high- pipeline are obvious strengths in a uncer- ams House is under way; the Allston science quality renovation, in tight quarters, in tain, volatile world. Harvard’s costs will and engineering complex comes into use by Boston’s pricey construction market. FAS rise as expensive new facilities open, fi- the fall semester of 2020), but the large, cu- is incurring substantial new debt to pur- nancial aid increases, researchers need more mulative surpluses (and depreciation, now sue the work—with the enormous Eliot and equipment and computing to conduct their nearly $400 million per year) may provide projects potentially loom- work—and the Graduate Student Union sufficient room to stave off any resort to ing over its budget later in the decade, pos- negotiations likely result in enhanced com- the debt markets. That is especially so if ing hard choices about investing in faculty pensation for that large cohort of workers. the building boom subsides: many current growth and new research priorities. Inevi- And of course University leaders are mind- projects stem from the capital campaign, tably, that points to future fundraising (not ful that the endowment, now valued at $40.9 which is now well in the rearview mirror. least, to repurpose and re-equip the spaces billion, represents little, if any, appreciation But not every faculty is in equally favor- SEAS will quit in Cambridge). in inflation-adjusted terms from the pre-fi- able circumstances. The School of Engi- In that vein, Harvard continues to en- nancial-crisis level of $36.9 billion in 2008— neering and Applied Sciences (SEAS) faces joy astonishing philanthropic support. Be- a period during which Harvard’s expenses substantially higher operating expenses in oc- yond the continued strength in current-use have increased by about $1.5 billion. cupying the huge Allston quarters next year, giving, even after the end of the campaign, raising questions—as yet unanswered— pledges for future current-use gifts in- The Endowment about how that burden will be divvied up creased nearly $200 million. And even as In his report, HMC chief executive N.P. between the University and the school. And past pledges for endowment gifts continue Narvekar explained the substantial deploy- the Faculty of Arts and Sciences’ (FAS) an- to be fulfilled, the balance for such pledges ment of endowment assets that has taken

Harvard Magazine 23

Reprinted from Harvard Magazine. For more information, contact Harvard Magazine, Inc. at 617-495-5746 's Journal place during the first two-plus years of his off, again depressing restructuring of the organization, its per- returns. sonnel, and their investment strategies. He Looking forward, also detailed some of the painful costs of at what he believes effecting those changes: is the halfway point Some $1 billion of natural-resources assets of HMC’s transfor- were written down or written off in fiscal mation, Narvekar in- 2017, with a further $100 million of write- tends to invest sig- downs in fiscal 2019—plus sales of $1.1 bil- nificantly in private lion of such holdings, with another $200 mil- equity. The asset lion designated for sale. Even so, remaining class has, historically, natural-resources assets produced a return delivered superior re- of -7 percent this past year, and they and turns, so HMC’s rela- other “illiquid anchors” will continue to tive under-investment weigh on performance. in such assets has pe- And a significant volume ofprivate-equity, nalized endowment performance. But there equity in a prudent manner”: selecting the real-estate, and other assets, totaling perhaps $1 is no quick fix. “Early in my time,” he wrote, right fund managers, diversifying invest- billion, has been sold, with other miscel- “we modeled it to take 7-9 years to attain ments by maturity, and being patient dur- laneous holdings written down or written a meaningfully higher allocation to private ing an “aggressive valuation environment.”

pus housing and social events, secondarily in an interview some of the long-term News Briefs local commercial establishments such as changes in the student-athlete experi- restaurants and bars. Although the rates ence since his arrival at Harvard, includ-

Sexual Assault Rates Unchanged at which students disclose these incidents ing a one-sport focus for most students, have been climbing rapidly, the majority of and greatly intensified recruiting amid On October 15, Harvard released the re- students do not disclose incidents to the fierce competition for qualified candi- sults of a survey estimating the prevalence University, the survey showed. For a full dates. “Valuable life lessons” such as how of sexual assault and other sexual miscon- report, see harvardmag.com/assault-sur- to persevere “when things don’t go well,” duct among its undergraduate, graduate, vey-19. vjonathan shaw he said, can be learned through sport. And and professional-school students. The he raised the question of how to better in- data (with 8,300 of 23,000 students sur- tegrate men and women in the “key edu- veyed in the spring of 2019 responding) Athletics Director to Retire cational experience of athletics”: creating echoed those from the 32 other private and Robert L. Scalise, Nichols Family direc- “shared experiences where people need public Association of American Universi- tor of athletics since 2001, and previously to work together to accomplish common ties (AAU) institutions that participat- a Harvard coach since 1974, will retire at goals…because that will serve society in ed—and showed that sexual assault and the end of this academic year. In an Oc- the best way.” On November 14, Gay an- harassment remain serious problems. At tober message to the community, Faculty nounced a nationwide search for his suc- Harvard, the prevalence of sexual assault of Arts and Sciences dean Claudine Gay cessor, led by Finley professor of engineer- (12.4 percent) was essentially unchanged praised his thoughtful leadership of the ing and applied sciences and former FAS from that in a 2015 survey. Harassment largest Division 1 athletics program in the dean Michael D. Smith. Read more at har- was reported by 39.3 percent of respon- nation, recounted the many athletic suc- vardmag.com/scalise-19. vj.s. dents, and 17.7 percent indicated that it cesses of his tenure—in- interfered with their academic or profes- cluding “22 national team sional lives. As with allegations of assault, championships and 144 most harassment was perpetrated by other titles”—and students. singled out his role as “a The vast majority of nonconsensual leading voice in national sexual contact among undergraduates is discussions of the student student to student (82.5 percent), occurs athlete experience.” in on-campus housing (more than two- The announcement thirds overall, and 79.4 percent in inci- came during a study of dents of penetration or sexual touching the athletics department, by physical force and/or inability to con- launched by Gay in Sep- sent), and involves alcohol (75.6 percent), tember. Scalise, a member according to the survey. Lead-up locations of the advisory committee Robert L. to these incidents are primarily on-cam- for that study, discussed Scalise ROSE LINCOLN/HPAC ROSE

24 January - February 2020

Reprinted from Harvard Magazine. For more information, contact Harvard Magazine, Inc. at 617-495-5746 That suggests another five to six years to achieve a targeted endowment allocation, and a subsequent multiyear period to harvest the results. In the meantime, HMC and the BRIDGE University are also deep into an exploration of Harvard’s risk tolerance and the appro- priate investment allocation and portfolio Their Future construction to achieve it. * * * This is a long game, with crucial implica- tions for the future fulfillment of Harvard’s academic mission. The institution is fortu- nate to pursue it fortified with operating surpluses and the support of dedicated, gen- erous supporters. For detailed analysis of the financial and endowment reports, see harvardmag.com/financial endowment - - Tuck Business Bridge reports-19. vjohn s. rosenberg is a business immersion program designed to prepare top liberal arts, Preparing for science, and engineering students for a Profession challenging careers in business and beyond. In just a few weeks, the Tuck Business Last summer, especially ambitious stu- dents enrolling for a Harvard professional Bridge Program®, held at the Tuck education could have begun work simul- School of Business at Dartmouth, delivers taneously on their M.B.A., J.D., and Ed.M. a comprehensive business curriculum degrees while the University was out of ses- sion. That possibility is, thankfully, imprac- taught by Tuck’s top-ranked MBA faculty, tical—and contrary to the intent of what is a capstone team project, recruiting, in fact a promising advance in post-college and one-on-one career guidance, to give education. Several schools have deployed online instruction during the months before students the tools they need to get an matriculation to introduce managers-, law- internship or job and succeed. yers-, and teachers-to-be to the vocabulary, skills, and teaching styles they will encoun- Financial aid is available! ter in the classrooms at the business, law, and education schools. 2020 Summer Bridge Program These summer experiences hold the po- Session 1: June 15–July 3 tential for at least two significant education- Session 2: July 8–29 al gains central to the University’s mission. First, they equip students to learn from day 2020 December Bridge Program one: an investment in their intellectual pro- November 30–December 18 ductivity, as they embark on expensive pro- fessional degrees. Second, they assure that increasingly diverse student cohorts—from different socioeconomic backgrounds (and increasingly, countries), college concentra- tions, and prior work—embark on their learning with some common preparation: a commitment to more fully inclusive school- Dartmouth College . Hanover, NH ing at Harvard. Over time, such instruction 603-646-6459 may be introduced by other University facul- [email protected] ties, adopted by other institutions, and even offered for sale (the three-course business bridge.tuck.dartmouth.edu sequence already is). • CORe. (HBS)

Harvard Magazine 25

Reprinted from Harvard Magazine. For more information, contact Harvard Magazine, Inc. at 617-495-5746