Campus & Community

Harvard University endowment delivers 15.4% return for fiscal year 2014

4 min read

Endowment supports academic, research, and financial aid programs

Harvard University announced today that its endowment posted a 15.4 percent return and was valued at $36.4 billion for the fiscal year ended June 30, 2014. The fiscal year 2014 endowment return was 82 basis points in excess of the 14.6 percent return on the benchmark Policy Portfolio.

Over the past five years, the Harvard Management Company (HMC) has delivered investment returns in excess of its benchmark, resulting in a cumulative value-added above the markets of $1.9 billion, net of all costs. Additionally, over the past five years HMC has distributed a total of $11.6 billion in cash to the University.

Jane Mendillo, president and CEO of Harvard Management Company, said: “We are pleased to continue to deliver substantial financial support for Harvard’s academic, financial aid, and research programs. We have delivered a five-year average annual return of 11.6 percent, which is consistent with the long-term returns HMC has delivered over the last 10, 20, and 40 years. Our organization and our portfolio are now well positioned to continue to deliver substantial returns and cash flow to the University for decades to come.”

Harvard’s endowment helps to fund operations critical to the University’s educational and research objectives. In fiscal year 2014, distributions from the endowment contributed over a third of the operating budget. Endowment income supports Harvard’s academic programs, science and medical research, and student financial aid programs, which allow the University to admit qualified students regardless of their ability to pay.

“Jane and the HMC team have done an excellent job strengthening the portfolio and investment organization, and we are proud to deliver strong returns to the University,” said James Rothenberg, chair of the HMC Board of Directors. “At the same time, HMC’s unique hybrid model has saved the University approximately $2 billion over the last decade as compared to the cost of management for a completely external model.”

The endowment allows Harvard to undertake specific activities that donors have supported over the years, in areas including staff and faculty salaries, facilities maintenance, and Harvard’s generous financial aid programs.

Nearly 60 percent of Harvard undergraduates received need-based scholarship aid this year, totaling more than $170 million. Families of undergraduate students receiving financial aid pay an average of only $12,000 per year; in addition, one in five families of students at Harvard College pays no tuition, room, or board, based on economic need. Throughout Harvard, scholarships and awards to students from University funds have almost tripled over the past decade, passing $460 million. The College’s industry-leading financial aid policies are designed to make Harvard affordable for families across the economic spectrum, a commitment that has remained a high priority despite economic uncertainties.

The endowment has earned an average annual return of 11.6 percent over the past five years, 8.9 percent over the past 10 years, and 12.3 percent over the past 20 and 40 years.

The endowment is not a single fund, but comprises more than 12,000 individual funds, many of them restricted to specific uses such as support of a research center or the creation of a professorship in a specific subject. The funds are invested by HMC, which oversees the University’s endowment, pension, trust funds, and other investments at a significant savings relative to outside management.

The endowment’s total value is affected by several factors each year, including investment returns, new contributions, and the annual payout for University programs.

About Harvard Management Company

Harvard Management Company is a subsidiary of Harvard University. Founded in 1974, HMC provides professional investment management of the University’s $36 billion endowment as well as its related financial assets, using a unique hybrid structure integrating internal and external management. HMC’s strong investment results over four decades have enabled the world-class teaching, groundbreaking research, and extensive financial aid programs of Harvard University.

Contact: Emily Guadagnoli,, 617.720.6994