Economy Tests Harvard
Elite Universities See Recession’s Toll on Endowments, Pinching Operating Costs
By Jennifer Levitz
BOSTON—In 2009, as its endowment plunged by nearly 30%, Harvard University halted construction on a $1.2 billion science center across the Charles River, angering the neighborhood there by leaving behind a foundation and an idle construction site.
Due to budgetary constraints, Harvard has delayed the construction of a science complex, seen in the foreground above, inside the fenced-in area.
Many universities face shaky finances because of declining state aid and weakened returns on endowments. At Harvard—and some of its Ivy League peers —the recession has lingered because of an unusually heavy dependency on their endowments for operating income. Harvard’s $32 billion endowment is up from its 2009 drop to $26 billion, but still off its pre-recession 2008 value of $36.9 billion.