Key Takeaways:
- Harvard University has received $4.4 billion in federal grants and contracts since 2017.
- The school collected more money from taxpayers than from student tuition during this time.
- Harvard also accepted $1.1 billion in foreign contracts and gifts, including $102 million from China.
Harvard’s Federal Funding Surge
Harvard University, one of the most prestigious private schools in the world, has been raking in billions of dollars from U.S. taxpayers. Since 2017, the school has received $4.4 billion in federal grants and contracts. To put that into perspective, this is more money than it collected from student tuition during the same period.
Where is all this money coming from? Federal agencies like the Department of Health and Human Services have been the biggest contributors, handing over $2.6 billion. The National Science Foundation and the Department of Defense also chipped in, giving $418 million and $357 million, respectively.
Interestingly, Harvard received more federal money during Donald Trump’s first term ($2.4 billion) than during Joe Biden’s presidency ($1.9 billion). So far this fiscal year, the university has already taken in $106.8 million.
Foreign Money Flows In
Harvard isn’t just relying on U.S. taxpayers for funding. The school has also reported $1.1 billion in foreign contracts and gifts since 2017. A significant chunk of this money—$102 million—came from China. Another $78 million was from Hong Kong, and $1.6 million arrived from entities in the Palestinian territories.
This foreign funding has raised eyebrows, especially given ongoing debates about international influence on American universities.
Harvard’s Payroll and Executive Pay
While the school is taking in billions, it’s also spending a lot on payroll. In 2022 alone, Harvard spent $2.9 billion on salaries. Some employees are earning big bucks—23 people at the university took home more than $400,000. Former president Lawrence Bacow was one of them, pocketing $1.3 million.
Despite its massive income, Harvard still claims nonprofit status, which gives it a huge tax break. Instead of paying the usual 20% capital gains tax, the school only pays 1.4% on its endowment gains.
Harvard’s Growing Endowment
Thanks to its nonprofit status, Harvard’s endowment has grown dramatically. In 2018, it was worth $39.2 billion. By 2024, that number jumped to $53.2 billion. Today, the school has over $2.5 million per student in its endowment.
The 2017 Tax Cuts and Jobs Act aimed to tax wealthy universities like Harvard. Any school with an endowment worth more than $500,000 per student must pay a small tax on its investment gains.
Trump’s Threat to Harvard’s Nonprofit Status
Former President Donald Trump has taken aim at Harvard’s nonprofit status. He froze over $2 billion in funding for the school and promised to revoke its tax-exempt status unless it meets certain demands. These include ending diversity, equity, and inclusion initiatives, derecognizing pro-Palestine student groups, and more.
Harvard pushed back, calling Trump’s threats illegal and dangerous. A spokesperson for the school told ABC News, “Such an unprecedented action would endanger our ability to carry out our educational mission.” They warned it could lead to less financial aid for students, fewer medical research programs, and a loss of innovation opportunities.
The Debate Over Taxpayer Funding
At the heart of this debate is whether Harvard—a private university with a massive endowment—should rely so heavily on taxpayer money. Critics argue that while the school is sitting on billions, it’s unfair to bill taxpayers for its operations.
Harvard, on the other hand, believes it’s using federal funds for important work, like medical research and education. The school also claims its nonprofit status is essential to its mission.
What’s Next?
As the debate continues, one thing is clear: Harvard’s funding situation is complex. The school is a powerhouse of research and education, but questions about fairness and accountability remain. Should taxpayers be footing the bill for a university with a $53 billion endowment? And what role should foreign money play in American education?
These are questions that lawmakers, educators, and taxpayers will need to grapple with in the years to come.
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