Financial
ReportFISCAL YEAR 2021

2

MESSAGE FROM THE PRESIDENT

3

FINANCIAL OVERVIEW

9MESSAGE FROM THE CEO OFHARVARD MANAGEMENT COMPANYHARVARD UNIVERSITY  TABLE OF CONTENTS

13

REPORT OF INDEPENDENT AUDITORS

14

FINANCIAL STATEMENTS

18

NOTES TO FINANCIAL STATEMENTS

1

Message from the President

I am pleased to submit Harvard University’s financial
results for fiscal year 2021.
Humanity has paid a hefty toll to the pandemic.
Each of us has been affected in different ways, but
all of us have had to contend with a world changed
by a public health crisis. Through everything,
Harvard has remained resilient — financially andotherwise — because of the remarkable efforts ofmembers of our community.
For eighteen months and counting, we have placed
the health and safety of people first. Facing declining
revenues this past fiscal year, we took steps to control
spending while developing and adopting new policies,
providing frequent testing and robust contact tracing,and reimagining our shared practices and physicalspaces to protect our students, faculty, and staff — aninvestment totaling more than $83 million. We also
continued to pay our idled employees and contract
workers at a cost of nearly $60 million. As a result,
we were able to avoid the widespread layoffs that werecommon at so many other colleges and universities. I
am pleased to report that almost all of these membersof our community are now back to work. These
measures also enabled us to continue our teachingand scholarship and to bring a limited number ofstudents back to campus last year. At the same time,
we increased support for undergraduate financial aid,
making it possible for students to study at Harvard
College without the added burden of concerns
about affordability.
These necessary efforts directed inward were
surpassed by extraordinary efforts directed outward.
Since the earliest days of the pandemic, Harvard
people have stepped up and stood out — working on
the frontlines and saving lives in the ever-shifting
landscapes of medicine and science, contributing
to vaccination development and deployment,
devising ways for learning and working to continue
despite disruption, and addressing the profoundracial, economic, and social inequities laid bare by
the pandemic. Against this stunning backdrop,

HARVARD UNIVERSITY  MESSAGE FROM THE PRESIDENT

individuals throughout the University have devoted
themselves to meeting the challenge of climatechange, to preserving and defending democracy,
and to ensuring that higher education in America
continues to attract and welcome the most promisingindividuals to our ranks. At a moment filled with somuch doubt and frustration, Harvard has helped togive the world reason to hope. I cannot imagine abetter use of our resources.
Ongoing investment in teaching, financial aid, thestudent experience, and research is made possibleby the extremely generous support of our alums
and other friends. During a time of disruption
and uncertainty, our loyal donors answered thecall. An increase in gifts for current use gave us
the opportunity to direct funding to areas withthe greatest need, and in ways that have made areal impact as we worked to address and abate thepandemic. Our provost, Alan Garber; our executive
vice president, Katie Lapp; and I also succeeded in
identifying one-time resources to assist our deansin providing more support across our Schools, amechanism intended to ensure progress throughout
the University.
As we continue to adjust to an unpredictable situation,strong financial stewardship has positioned Harvard
and our entire community to accelerate progress.
Rather than facing budget shortfalls, we can makesignificant investments that further our mission.
Most importantly, we can rest assured that future
generations of students, faculty, researchers, and staff
will be able to pursue the opportunity and promisethat are the hallmarks of our beloved institution.

Lawrence S. Bacow
PRESIDENT
October 2021

2

Financial Overview
From the Vice President for Finance and the Treasurer

At the onset of the pandemic, forty million Americans
were out of work, the stock market was down 25%,
vaccines were a distant hope, and Harvard’s campus,
like most every other college and university in the
country, was nearly empty with the move to remotelearning and work. It was during this time — when thescope and duration of the pandemic, and any resulting
economic fallout was unknown — that Harvard’s
governing board approved a budget for fiscal year 2021
that anticipated a severe adverse financial impact fromCOVID-19 on the University. In the face of all thisuncertainty, Harvard’s financial plan was anchoredon three key principles articulated by President Larry
Bacow, Provost Alan Garber, and Executive Vice
President Katie Lapp: to prioritize community healthand safety, advance the mission of pursuing teaching
and research excellence, and recognize that Harvard
is its people. These principles deliberately placed
Harvard’s mission and its people — students, faculty,
researchers and staff — at the heart of Harvard’s
financial focus. By making key investments in remoteteaching and learning, developing extensive testing
and tracing programs, continuing to advance criticalresearch, avoiding widespread layoffs, and continuing
to pay idled workers, the University operated
throughout fiscal year 2021 fulfilling those principles.
Fortunately, Harvard’s finances ended the year in a
dramatically improved position than the initial budget
anticipated, with a consolidated University surplus of$283 million. As expected, revenues were down forthe second year in a row; the first time since the Great
Depression in the 1930’s. This revenue loss was driven
by closed campus operations — affecting net tuitionand executive education, board and lodging, parking,and other services income. The Harvard community
rallied in a shared and purposeful effort to reduce
expenses commensurate with the losses in revenues.
Over the two-year period from fiscal year 2019 to fiscal
year 2021, revenues declined 5%, as did expenses.

HARVARD UNIVERSITY  FINANCIAL OVERVIEW

The success of this effort directly enabled the
University to: Pivot to a remote environment, and then enable
the transition to a hybrid environment throughinvestments in safety and health measures as well
as digital technologies. The University invested$83 million during fiscal year 2021 in testing
and tracing costs, personal protective equipment,
technology of all kinds, and the reconfiguration ofclassrooms and labs. So far, we have kept COVID
cases relatively low within our community thanks
to guidance from many Harvard health leadersand experts, and the cooperation of all members of
the community.
 Support students by granting admission deferrals,
increasing per-student levels of financial aid andscholarships, waiving graduate housing rental
contracts, providing emergency support grants andeliminating work study requirements. In total, net
student income from tuition, room and board was
down $182 million or 17% from fiscal year 2020.
 Avoid any widespread job layoffs. As the pandemic
displaced work for employees and contract workers in
our workforce, Harvard provided nearly $60 million
in continuous pay and benefits to more than 2,800
members of our community. This helped thesecolleagues avoid unemployment and ensured a job forthem to return to as campus activities resumed.
 Preserve and build reserves in the schools and units
for mission purposes.
This work was not easy, and it came with manysacrifices from many people across our entire
community. We thank Harvard’s students, faculty,
researchers and staff, those who have been remote andthose on campus, for their flexibility, hard work, anddetermination to find a way through difficult times.

3

In the midst of the world-wide impacts of thepandemic, with inequities laid bare and exacerbated,
we are inspired to see leaders throughout Harvard
nonetheless finding and acting in new and significant
ways. All of Harvard’s schools are expanding theirreach and pedagogical impact through new methodsof digital learning, increasing access to students, andmaking research discoveries across all fields. Harvard
seems reinvigorated and is capitalizing on new waysof teaching, learning, and trying to make the world abetter place through scholarship and research.
In fiscal year 2022 and beyond, we are focused on
the opportunities the pandemic has provided to
re-imagine how teaching, learning, research, andwork happens — on campus and beyond — to ensurethat our financial resources are allocated to areas ofhighest priority and need.
Thanks to capable and careful management by
Harvard Management Company, the endowment
enjoyed an outstanding year as further describedin Narv Narvekar’s letter later in the annual report.
The endowment is sometimes misunderstood asa checkbook for free spending, however that is not
how it works, nor how it was intended by the donors
whose gifts created the endowment. Their gifts aredesignated for use solely as ongoing funding foracademic, teaching, research, and other campus
activities for generations to come. More often than not,the endowed funds also carry specific use restrictions.
We are gratified that this year’s return results will
provide a lift to operations in the next few years but
remain aware that history teaches that capital markets
give and take away.

HARVARD UNIVERSITY  FINANCIAL OVERVIEW

We want to thank each and every donor to the
University — past and present — for understandingthat Harvard’s excellence in teaching and research
is made possible through philanthropy. Ten percentof this past year’s revenues came from current year
donors, and 39 percent from donors of the pastthrough endowment distributions. We are deeply
appreciative of their support.
Finally, we thank the entire Harvard community forpulling together during an enormously challenging
year, and so successfully advancing the educationaland research mission amid the pandemic. It has been
inspiring to be a part of it.

Thomas J. Hollister
VICE PRESIDENT FOR FINANCE

Paul J. Finnegan
TREASURER
October 2021

4

FINANCIAL OVERVIEWThe University ended fiscal year 2021 with anoperating surplus of $283 million compared to a
$10 million deficit in fiscal year 2020. Our positive
results are due to generous contributions and adisciplined focus on financial management.

OPERATING REVENUE
In fiscal year 2021, total operating revenue decreased
2% or $124 million to $5.2 billion.
Total net student income decreased 17% to$888 million in fiscal year 2021. Revenue fromtraditional student programs (undergraduate andgraduate) was down $55 million as students took
advantage of generous deferral policies to pause theircourse of study during the pandemic. The University’scommitment to financial aid remained steadfast
with aid relative to student charges increasingfrom the prior year. Board and lodging revenue of$69 million declined 58% driven by a significantly
reduced on-campus presence for the full academic
year. Net executive and continuing education totaled$378 million and was substantially impacted by
the COVID-19 pandemic, declining $122 million
or 24% driven by program cancellations andenrollment declines over a two-year span from fiscal
year 2019 to fiscal year 2021.
Sponsored support was not significantly impacted by
the pandemic in fiscal year 2021, as the University
prioritized research activity in return to campus
planning last year. As a result, revenue from federal
and non-federal sponsored sources increased 1% to$927 million. Federal funding, which accounted forapproximately 67% of total sponsored revenue in fiscal
year 2021, increased 1% to $625 million. Non-federal
sponsored revenue, attributable to funding from
corporations, foundations, and other non-federal
sponsors, remained relatively flat at $302 million.

continuing at record levels. Current use gifts,
received from alumni, foundations and others,
totaled $541 million, representing approximately 10%of operating revenues in fiscal year 2021. Combinedwith gifts for current use and Harvard’s endowment
distribution, philanthropy accounts for 49% of fiscal
year 2021 revenue.
In fiscal year 2021, the endowment distribution of$2.0 billion increased by 2% with the help of new
gifts to the endowment. In the aggregate, Harvard’s
endowment payout rate (i.e., the dollars withdrawn
annually for operations as a percentage of theendowment’s prior year-end market value) was 5.2%,
consistent with the prior fiscal year, and in linewith the University’s targeted payout rate range of
5.0% – 5.5%. The University continues to be keenly
focused on managing the endowment’s payout ratein order to maintain an appropriate balance between
supporting the University’s near-term programmaticneeds and aspirations and safeguarding theendowment’s long-term purchasing power.
FISCAL YEAR 2021 UNIVERSITY REVENUE SOURCES

Research18%
Non-Federal
Sponsored
DegreeSeeking
Education

Net Student
Income17%
Continuing &Executive
EducationFederalSponsored

12%

Current
Use Gifts

Philanthropy
49%

10%

6%
10%

39%

Net
Endowment
Distribution

7%

16%

Non-Academic

We are grateful to all donors who have continued
to support the University’s mission during thisunprecedented time, with current use giving

HARVARD UNIVERSITY  FINANCIAL OVERVIEW

5FISCAL YEAR 2021 SOURCES OF OPERATING REVENUE

4%
14%

16%
16%

8%
9%

9%

10%

1%
4%

6%
13%
9%
3%
1%

4%

5%

8%
15%

17%
30%

4%

6%
13%

3%
18%
16%

41%

41%

5%

38%

28%

13%

13%

40%

28%

13%

61%

8%

15%
35%
17%
80%

3%
72%

28%

22%

31%

31%

10%

54%

9%
42%

39%

40%

38%
27%

University

Radcliffe

Divinity

Facultyof Arts &Sciences

DesignLaw

26%

Engineering & Kennedy
SchoolAppliedSciences

Dental

25%

23%

22%

MedicalBusiness

Education

20%

PublicHealthOPERATING EXPENSESThe University’s operating expenses decreased by$417 million or 8%, to $5.0 billion as of June 30,
2021. While much of this decline was the result oflarge, one-time costs incurred during fiscal year 2020($71 million related to early retirement benefits inaddition to other costs related to asset impairment
and environmental remediation), Harvard did
realize significant cost savings, a testament to the
University’s ability to pivot and adapt to the changing
environment. Excluding fiscal year 2020’s early
retirement costs, compensation expense decreased 1%,
as retiree-driven vacancies offset contractual union
wage increases and year-end bonuses for faculty andstaff. By avoiding widespread layoffs and continuing
to compensate our idle workers, Harvard was able
to continue to support its community throughout
the pandemic.
The reduced on-campus presence, combined withsound financial management, resulted in a decreasein non-compensation related expenses in fiscal year
2021. The decrease in discretionary spending wascomprised of savings in travel (-$69 million, 97%),
HARVARD UNIVERSITY  FINANCIAL OVERVIEW

space and occupancy (-$47 million, 13%), supplies andequipment (-$33 million, 14%), and services purchased(-$26 million, 4%).
FISCAL YEAR 2021 OPERATING EXPENSES

Supplies &Equipment
Services
Purchased

Salaries &
Wages

4%
13%
42%
Other

11%

People54%

6%Space &
Occupancy

4%Interest

8%

12%

Depreciation

Space 18%

Benefits

6

RESPONDING TO COVID-19
The COVID-19 vaccine is one of the breakthroughs
made through Harvard’s research enterprise thatyields discoveries with the potential to improve lives,transform industries, and make a positive social andeconomic impact.
Two of the three vaccines currently available in the
United States have their origins in Harvard Medical
School laboratories: the Moderna vaccine and theJohnson & Johnson vaccine.

Harvard awarded the coveted George Ledlie Prize
to Dan H. Barouch, the William Bosworth Castle
Professor of Medicine at Harvard Medical School
and Director of the Center for Virology and Vaccine
Research at Beth Israel Deaconess Medical Center for
his research culminating in an effective vaccine for
COVID-19 developed by Johnson & Johnson.
“If you ever wondered why you support this work,
the answer is you are literally helping to savehumanity as we speak.” – President Lawrence S. Bacow

To respond to the critical challenges of COVID-19, the University launched several initiatives to offer muchneeded resources and support for communities where we live, learn, and work.

COVID-19 Testing
Regular testing has been a key part of the
University’s collective efforts to protect
the health and safety of our community.
Over 1 million COVID-19 tests have been
administered to Harvard affiliates with an oncampus presence since June 1, 2020.

Economic Impact
As the fifth largest employer in
Massachusetts, the University anchoredthe state’s knowledge-based economy byproviding nearly $60 million in continuous
pay and benefits to more than 2,800
employees and contract workers whose work
had been either fully or partially displaced or
idled due to the pandemic.

HARVARD UNIVERSITY  FINANCIAL OVERVIEW

Financial Aid
Building on the commitment toexpanding access to an affordable
college education, the University
granted $597 million in financial aid
and scholarships for fiscal year 2021
to support need from students andfamilies during a period of economic
uncertainty.

Support for Temporary Emergency Shelter
The University and the Massachusetts
Institute of Technology each donated$250,000 to the City of Cambridge to support
the creation of a temporary emergency
shelter, providing relief for the City’s
homeless residents during the pandemic.

Community Partnerships
The University awarded emergency
response grants to local nonprofit
organizations to support thedelivery of food supplies, medicine,
educational programming, andessential resources to more than
19,000 residents in Cambridgeand Allston-Brighton.

Housing Health Care Workers
and First Responders
The University offered the use of theHarvard Square Hotel to the Cambridge
Health Alliance and Cambridge Police, Fire,and Emergency Medical Services for housing
health care workers and first responders whoneeded a place to stay in close proximity tohospitals and health care facilities.

7

BALANCE SHEETInvestments and endowment
In fiscal year 2021, the return on the endowment
was 33.6% and its value (after the net impact of
distributions from the endowment for operations,and the addition of new gifts to the endowment
during the year) increased from $41.9 billion at theend of fiscal year 2020 to $53.2 billion at the end of
fiscal year 2021. More information can be found in
the Message from the CEO of Harvard Management
Company, found on page 9 of this report.
The University has a policy of maintaining liquidity
outside of the General Investment Account (GIA)
through a combination of cash, cash equivalents andshort-term investments. These investments totaled$1.5 billion at June 30, 2021 compared to $1.6 billion
at June 30, 2020 (see Note 2).
MARKET VALUE OF THE ENDOWMENT AS OF JUNE 30, 2021
In millions of dollars

Business$5,265

Other$4,954President’s funds $3,389
Law $2,636
Public Health $2,125

Medical$5,806Engineering & Applied
Sciences $1,969

Faculty ofArts & Sciences$21,487

Debt
Bonds and notes payable decreased from $5.7 billion
at June 30, 2020 to $5.5 billion at June 30, 2021. The
University maintained its AAA rating by S&P Global
Ratings and Aaa by Moody’s Investor Services.
Fixed assets
The University’s Science and Engineering Complex(SEC) building, home to the Harvard John A.
Paulson School of Engineering and Applied Sciences(SEAS), came online in fiscal year 2021, resulting
in over $40 million in incremental costs including
depreciation. The SEC opened its doors to students
in the fall of 2021 and this 544,000-square-footcomplex has been certified as one of the healthiest,
most sustainable, and energy-efficient laboratories in
the world.
The University curtailed spending on capital projects
and acquisitions as a result of the COVID-19 pandemic,
and for fiscal year 2021 it invested $410 million
compared to $627 million in fiscal year 2020. The
University has continued to invest in renewal projects
across the campus in a manner that will allow us
to prudently manage capital projects during thisupcoming period of financial uncertainty.

Kennedy School $1,667
Radcliffe $848
Divinity $847
Education $796
Design $649
University professorship $445
Dental $283

TOTAL MARKET VALUE $53,166

HARVARD UNIVERSITY  FINANCIAL OVERVIEW

8

RI
TAS

Message from the CEO
OCTOBER 2021

Dear Members of the Harvard Community,
For the most recent fiscal year, which ended on June 30, 2021, the return on the Harvard endowment was
33.6% and the value stood at $53.2 billion. The endowment also distributed more than $2 billion toward
the University’s operating budget, which continues to represent more than one-third of annual revenue.

Performance
Asset Class

Allocation

ReturnPublic Equity

14%

50%

Private Equity

34%

77%

Hedge Funds

33%

16%

Real Estate

5%

13%

Natural Resources

1%( 1 )%

Bonds/TIPS

4%

3%

Other Real Assets

1%

1%Cash & Other*

8%

---

Endowment

100%

34%

*Cash held alongside equity index hedges used to reduce risk.

Fiscal year 2021 was an extraordinary year. Public and private markets both continued their strong
performance, which allowed the endowment to not only increase its distribution to the University, butalso continue to grow during this critical time when pandemic-related financial pressures challenge all ofhigher education.
For each of the last three fiscal years, asset allocation/risk level was a significant determinant ofreturns — the higher the risk taken, the higher the return generated. The same was true in FY21, with one
major difference. During the previous three fiscal years, the impact was measured in a few percentage
points. In fact, during that period, HMC’s strong alpha generation was enough to overcome the impact ofa lower level of portfolio risk. By contrast, the impact of lower portfolio risk this past year was measured
in tens of percentage points.

OCTOBER
2021
HARVARD
UNIVERSITY  HARVARD MANAGEMENT COMPANY

91

Put another way, given the extraordinarily strong performance of the overall market this past year,
a meaningfully higher level of portfolio risk would have increased HMC’s returns dramatically.
Specifically, key determinants of returns were:
1. Overall portfolio risk;
2. Venture capital, growth private equity, buyouts, public equity allocations andthe directionality of hedge funds (all key expressions of portfolio risk);

3. Historical exposure to specific venture firms and vintage years 2009 – 2014, which had
a dramatic impact upon FY21 returns (due to previous portfolio risk allocations).

Harvard’s Risk Tolerance
During FY21, Harvard enjoyed tremendous returns, but also experienced the opportunity cost of taking
lower risk. As readers of previous letters will recall, determining Harvard’s risk tolerance (and therefore
the appropriate risk in the portfolio) has been a topic actively discussed between HMC and the University,
starting with my arrival in December 2016. Over the last decade, HMC has taken lower risk than many ofour peers and establishing the right risk tolerance level for the University in the years ahead is an essential
stewardship responsibility.
In order to maximize the endowment’s returns in support of Harvard’s mission, Harvard should take anappropriate amount of risk, subject to some important constraints. The main constraint for any university
is its ability to absorb a significant reduction (even if only temporary) in the value of the portfolio and theresulting reduction in distributions critical to the annual operating budget. Furthermore, since most of thehighest risk assets are illiquid ones (such as venture capital funds) a major decline in market/portfolio will
generally result in a reduction in portfolio liquidity, a potential issue for both HMC and Harvard. How much
portfolio risk can and should Harvard tolerate? While this appears to be a simple question, the answer isless obvious.
Accordingly, in 2018 HMC formed a Risk Tolerance group. This group includes board members, Harvard
faculty, and colleagues from the Harvard administration, and is led by Jeremy Stein, the Moise Y.
Safra Professor of Economics. Professor Stein and Harvard’s CFO, Tom Hollister, have led us throughan extraordinarily thoughtful analysis and debate, integrating Harvard’s financial position, its need forbudgetary stability, and its ability to handle more risk. It has been an honor and a great opportunity for
HMC team members to be a part of and contribute to these discussions.
The level of portfolio risk is ultimately the most important and fundamental aspect of portfolio construction(reflected in asset/risk allocation) and a critical decision for the University. The findings and recommendationsof our collective work will be reviewed carefully in the next several months, with ultimate oversight by theHarvard Corporation, and the decisions will direct and inform our management of the portfolio in the years
ahead. I look forward to sharing our evolving thinking on portfolio risk levels in future letters.
We take pride in the fact that a deep dialogue with regards to Harvard’s risk tolerance and its implicationsfor HMC’s portfolio is occurring. Ultimately, we all seek the appropriate risk level for Harvard, which mightwell be different from that of other university endowments. We believe that Harvard’s financial future isvery well served by this process.

OCTOBER
2021
HARVARD
UNIVERSITY  HARVARD MANAGEMENT COMPANY

102

Portfolio Initiatives
As discussed in the past, our portfolio initiatives over the last few years have aimed to:
1. Reduce Natural Resources exposure
2. Reduce Real Estate exposure
3. Increase Private Equity, especially growth and venture exposures
4. Reduce Public Equity exposure
5. Increase Hedge Funds, particularly those with low equity exposure and correlation

These initiatives are essentially completed, given our current risk tolerance level. Notably, the first three
initiatives were driven by our investment views. All but the third initiative were also driven by our need tokeep the portfolio within its current risk budget while adding to private venture and growth exposure. While
reducing public equities proved to be painful in FY21, we needed to do so in order to remain within our
portfolio risk budget. Overall, we are exceptionally pleased that we made these asset allocation moves,
as they added about 5 percentage points to the FY21 portfolio return as compared to the FY17 allocation.
Building a large hedge fund allocation during these past few years was also a way to mitigate risk as we
significantly increased our unfunded capital commitments during the private equity and venture capital
ramp-up period. This ramp-up period is mostly behind us now, though may go up a bit more should ourrisk levels increase.
As sophisticated observers are aware, building venture capital portfolios is a multi-year effort for several
reasons: vintage year diversification, highly prudent manager selection, and the years it takes for these
exceptional managers to competently invest our capital. Perhaps not surprisingly, a very large share of thetremendous gains from venture funds over the last year related to investments made over a decade ago.
Therefore, our recent venture investments could take about a decade to bear fruit, though up rounds are
happening much quicker today than in normal market periods. We expect an inevitable pullback, but also
believe that certain tech and healthcare sectors offer great secular growth opportunities in the longer term.

Benchmark Relative Performance
As readers of previous letters will understand, we do not regard a focus upon benchmarks as a good way
to invest. Nevertheless, I mentioned them in previous letters, and again here, simply as a way to show
our early progress and success.
With regards to public markets (Public Equities and Hedge Funds) our four-year outperformance remains
excellent—over 400bps on an annualized basis. While equivalent reporting for the private equity side of
the portfolio is not yet available for FY21 close, we expect the four-year private equity portfolio benchmark
relative performance to continue to be excellent and, therefore, expect that the four-year outperformancefor the portfolio in aggregate to remain strong.

A Word of Caution
As experienced investors understand, Harvard’s endowment will not produce 33.6% returns each year.
Indeed, there will inevitably be negative years, hence the importance of understanding risk tolerance.
Similarly, not every four-year period will generate the excellent benchmark relative performance or theabsolute performance HMC has generated. What is more important is that our team, investment process/analytics, organizational structure, culture, and aligned incentives provide HMC with the framework forlong-term success.

OCTOBER
2021
HARVARD
UNIVERSITY  HARVARD MANAGEMENT COMPANY

113

Net-Zero Efforts
As we highlighted in HMC’s first annual Climate Report, our team is making aggressive progress on threeconsiderable challenges toward the 2050 portfolio net-zero pledge: development of a comprehensive
calculation methodology for the portfolio’s greenhouse gas (GHG) emissions, data access from a wide
range of external managers, and engagement with both asset managers and corporations.
Harvard was the first university to make a net-zero endowment pledge, but others have joined the cause
as well. Consultation and collaboration with like-minded institutions will accelerate our efforts and establish
standards that accurately reflect the real-world emissions of our investments.
While work on the net-zero portfolio continues, HMC recognizes that our own operations should meet thatsame standard. Since we believe we can do so well in advance of 2050, HMC became the first endowment
office to announce that its own operations will be net-zero, beginning in FY22.
Our team looks forward to sharing more thoughts on both our operational and portfolio net-zero efforts
in the annual Climate Report early next year.

Diversity and Inclusion
Early in FY21, HMC responded to an inquiry from Representative Emanual Cleaver, II and Representative
Joseph Kennedy, III regarding diversity among our external asset managers. As we have discussed in thepast, this is an issue of great importance to us as we believe that both our organization and our portfolio
can only excel if we seek talent from the broadest pool possible. I encourage you to review our responses
to their thoughtful questions and know that our efforts to broaden our pipeline of diverse managers andincrease our investments with them continues.

In Closing
Shortly after our last annual report was released, HMC announced that we had completed our five-year
organizational transition more than a year ahead of schedule. The changes we enacted, as a team, havedrastically reshaped both the way HMC operates and the way we invest. I am tremendously grateful forthe hard work that each member of our team has contributed over the past few years. There is certainly
more work for us to do and we will always look for ways to improve and adapt HMC and our processes.
That said, I truly believe that HMC and the endowment are on a pathway to best serving our singular goal
to provide long-term financial stability to Harvard University.
Best regards,

N.P. “Narv” Narvekar
Chief Executive Officer

OCTOBER
2021
HARVARD
UNIVERSITY  HARVARD MANAGEMENT COMPANY

124

Report of Independent Auditors
To the Joint Committee on Inspection of the Governing Boards of Harvard University:
We have audited the accompanying consolidated financial statements of Harvard University and its subsidiaries (the“University”), which comprise the consolidated balance sheet as of June 30, 2021, and the related consolidated statementsof changes in net assets with general operating account detail, changes in net assets of the endowment and of cash flows
for the year then ended.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements inaccordance with accounting principles generally accepted in the United States of America; this includes the design,
implementation and maintenance of internal control relevant to the preparation and fair presentation of consolidated
financial statements that are free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on the consolidated financial statements based on our audit. We conducted our
audit in accordance with auditing standards generally accepted in the United States of America. Those standards requirethat we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated
financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material
misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments,
we consider internal control relevant to the University’s preparation and fair presentation of the consolidated financial
statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the University’s internal control. Accordingly, we express no such opinion.
An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial
statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion.
OpinionIn our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial
position of Harvard University and its subsidiaries as of June 30, 2021, and the changes in their net assets and their cash
flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Other Matter
We previously audited the consolidated balance sheet as of June 30, 2020, and the consolidated statements of changes in
net assets with general operating account detail, changes in net assets of the endowment and of cash flows for the year
then ended (not presented herein), and in our report dated October 22, 2020, we expressed an unmodified opinion on
those consolidated financial statements. In our opinion, the information set forth in the accompanying summarized
financial information as of June 30, 2020 and for the year then ended is consistent, in all material respects, with theaudited consolidated financial statements from which it has been derived.

Boston, MA
October 13, 2021
PricewaterhouseCoopers LLP, 101 Seaport Boulevard, Suite 500, Boston, Massachusetts 02210
T: (617) 530 5000, F: (617) 530 5001, www.pwc.com/us

HARVARD UNIVERSITY  INDEPENDENT AUDITOR’S REPORT

13

BALANCE SHEETS
with summarized financial information as of June 30, 2020

June 30
2021

In thousands of dollars
ASSETS:Cash and cash equivalents
Receivables, net (Note 4)
Prepayments and deferred charges
Operating leases — right of use assets (Note 18)
Notes receivables, net (Note 5)
Pledges receivables, net (Note 6)
Fixed assets, net (Note 7)
Interests in trusts held by others (Note 3)
Securities pledged to counterparties, at fair value (Note 3)
Investment portfolio, at fair value (Note 3)
TOTAL ASSETS$LIABILITIES:
Accounts payable
Deferred revenue and other liabilities
Operating lease liabilities (Note 18)
Other liabilities associated with the investment portfolio (Notes 3 and 10)
Liabilities due under split interest agreements (Note 9)
Bonds and notes payable (Note 10)
Accrued retirement obligations (Note 11)
Government loan advances (Note 5)
TOTAL LIABILITIESNET ASSETSTOTAL LIABILITIES AND NET ASSETSNET ASSETS:
General Operating Account (GOA) (Note 8)
Endowment (Note 8)
Split interest agreements (Note 9)
TOTAL NET ASSETS

Without donor
restrictions

With donor
restrictions$ 6,588,391
9,423,055$ 2,847,600
43,742,698
773,330$ 47,363,628$ 16,011,446

224,042
322,482
315,172
689,962
377,596
2,335,958
8,463,008
515,757
290,388
61,141,750$ 74,676,115

$

$

$

488,896
1,716,026
702,872
756,237
1,019,357
5,503,199
1,078,647
35,807
11,301,041

2020

176,615
262,731304,920754,699372,234
2,403,175
8,435,255
427,359
214,010
48,111,441$ 61,462,439

321,666
1,580,178
767,599
878,018
819,584
5,664,679
1,216,251
44,748
11,292,723

63,375,074

50,169,716$ 74,676,115$ 61,462,439

June 302021$ 9,435,991
53,165,753
773,330$ 63,375,074

2020$ 7,677,143
41,894,380
598,193$ 50,169,716

The accompanying notes are an integral part of the consolidated financial statements.

HARVARD UNIVERSITY  FINANCIAL STATEMENTS

14

STATEMENTS OF CHANGES IN NET ASSETS WITH GENERAL OPERATING ACCOUNT DETAIL
with summarized financial information for the year ended June 30, 2020
In thousands of dollars
OPERATING REVENUE:
Net student income (Notes 2 and 12)

Without Donor
Restrictions$

For the year ended
June 302021
2020

With Donor
Restrictions$

888,284$ 1,070,156

188,239
20,543208,782

442,268
182,750
259,553
42,116926,687436,552
179,678
260,739
40,552
917,521888,284

Sponsored support (Note 13)
Federal government – direct costs
Federal government – indirect costs
Non-federal sponsors – direct costs
Non-federal sponsors – indirect costs
Total sponsored support

442,268
182,750
71,314
21,573717,905

Gifts for current use (Note 14)

142,710398,249

540,959

477,564

Investment income:Endowment returns made available for operations (Note 8)
GOA returns made available for operations
Other investment income
Total investment income

378,998
143,788
10,751
533,537

1,660,526
5,166
1,665,692

2,039,524
143,788
15,917
2,199,229

1,998,756
176,174
33,3052,208,235$

Other revenue (Note 15)
Net assets released from restriction

693,915
2,138,218(2,138,218)

693,9150699,354
0

TOTAL OPERATING REVENUE

5,114,569

134,505

5,249,074

5,372,830

OPERATING EXPENSES:
Salaries and wages
Employee benefits (Note 11)
Services purchased
Depreciation (Note 7)
Space and occupancy
Supplies and equipment
Interest (Note 10)
Scholarships and other student awards (Note 12)
Other expenses (Note 16)
TOTAL OPERATING EXPENSES

2,076,665
578,126
644,699
410,229
316,916
210,697
183,455
160,744384,825
4,966,356

02,076,665
578,126
644,699
410,229
316,916
210,697
183,455
160,744384,825
4,966,356

2,131,511
620,752
670,485
376,855
364,163
243,870
180,727
163,618
630,897
5,382,878

148,213

134,505

282,718(10,048)(2,156)21,019(184,495)(41,741)

2,504
1,529,850(143,787)(12,362)765
135,488
105,987(162,718)(616)
21,0190
1,476,1308,808
281,613(176,174)(171,440)
657
51,448(81,927)(12,670)
1,543
11,916
0(86,226)

92,764
9,223,128
175,137
9,491,029
37,872,599$ 47,363,628

1,758,848
11,271,373
175,137
13,205,358
50,169,716$ 63,375,074(96,274)
964,680
24,824
893,230
49,276,486$ 50,169,716

NET OPERATING SURPLUS/(DEFICIT)NON-OPERATING ACTIVITIES:
Income from GOA investments
GOA realized and change in unrealized appreciation, net (Note 3)
GOA returns made available for operations
Change in pledge balances (Note 6)
Change in interests in trusts held by others
Gifts for facilities and loan funds (Note 14)
Change in retirement obligations (Note 11)
Other changes
Transfers between GOA and endowment (Note 8)
Transfers between GOA and split interest agreements (Note 9)
Non-operating net assets released from restrictions
TOTAL NON-OPERATING ACTIVITIESGENERAL OPERATING ACCOUNT NET CHANGE DURING THE YEAR
Endowment net change during the year
Split interest agreements net change during the year (Note 9)
NET CHANGE DURING THE YEAR
Net assets, beginning of year
NET ASSETS, END OF YEAR

2,504
1,529,850(143,787)(12,362)765
135,488
105,987(162,718)
1,540
184,495
1,517,871
1,666,084
2,048,245
3,714,329
12,297,117$ 16,011,446

The accompanying notes are an integral part of the consolidated financial statements.

HARVARD UNIVERSITY  FINANCIAL STATEMENTS

15

STATEMENTS OF CHANGES IN NET ASSETS OF THE ENDOWMENT
with summarized financial information for the year ended June 30, 2020

In thousands of dollars
Investment return (Note 3):
Income from general investments
Realized and change in unrealized appreciation, net
Total investment return
Endowment returns made available for operations
Net investment return

Without Donor
Restrictions

Gifts for endowment (Note 14)
Transfers between endowment and the GOA (Note 8)
Capitalization of split interest agreements (Note 9)
Change in pledge balances (Note 6)
Change in interests in trusts held by others (Note 8)
Other changes
Net assets released from restrictions
NET CHANGE DURING THE YEAR
Net assets of the endowment, beginning of year
NET ASSETS OF THE ENDOWMENT, END OF YEAR

$

3,284
2,344,997
2,348,281(378,998)
1,969,283
49,076(1,540)(5,216)36,642
2,048,245
7,374,810$ 9,423,055

For the year ended
June 302021
2020

With Donor
Restrictions$

14,63910,469,783
10,484,422(1,660,526)
8,823,896

415,943
2,156
16,830(54,262)
87,633(32,426)(36,642)
9,223,128
34,519,570$ 43,742,698$

17,923
12,814,780
12,832,703(2,039,524)
10,793,179

465,019616
16,830(54,262)
87,633(37,642)
0
11,271,373
41,894,380$ 53,165,753$

74,3052,602,126
2,676,431(1,998,756)
677,675

469,203(1,543)
12,136(191,451)
6,331(7,671)
0964,680
40,929,700$ 41,894,380

The accompanying notes are an integral part of the consolidated financial statements.

HARVARD UNIVERSITY  FINANCIAL STATEMENTS

16

STATEMENTS OF CASH FLOWS
with summarized financial information for the year ended June 30, 2020

For the year ended
June 30

In thousands of dollars
CASH FLOWS FROM OPERATING ACTIVITIES:
Change in net assets
Adjustments to reconcile change in net assets to net cash (used in) operating activities:
Depreciation
Amortization of premium and discount related to bonds and notes payable
Realized and change in unrealized appreciation, net
Change in fair value of interest rate exchange agreements
Change in interests in trusts held by others
Change in liabilities due under split interest agreements
Gifts of donated securities
Proceeds from the sales of gifts of unrestricted securities
Gifts for restricted purposes
Cost of issuance of debt
Loss on disposal of assets
Change in accrued retirement obligations
Non-cash operating lease costs
Changes in operating assets and liabilities:
Receivables, net
Prepayments and deferred charges
Pledges receivable, net
Accounts payable
Deferred revenue and other liabilities
Operating lease liability
NET CASH USED IN OPERATING ACTIVITIES

2021$ 13,205,358

2020$

893,230

410,229(38,512)(14,741,458)(12,928)(88,398)
226,092(111,634)
22,290(527,463)
362
39,033(137,604)
64,737

376,855(28,489)(2,940,852)
16,832(6,988)(14,147)(114,118)
18,886(335,376)(4,213)
181,349
95,70725,759(59,751)(10,252)
67,217
155,865
135,848(64,727)(1,465,696)

33,590(38,201)
362,652(37,995)
77,367(27,070)(1,465,222)(50,412)55,893(10,843)
17,206,874(15,952,533)
427,855(472,027)
1,204,807(49,990)
52,515(1,136)
14,837,933(13,911,250)
296,726(764,415)
460,383

6,377(26,319)(8,941)
464,594

4,194(26,013)602,131(118,099)
95,232
335,376
56(21,985)
870,892

NET CHANGE IN CASH
Cash, beginning of year
CASH, END OF YEAR

203,705
1,360,598$ 1,564,303(133,947)
1,494,545$ 1,360,598

Cash and cash equivalents (per Balance Sheets)
Cash and cash equivalents held in investments (Note 3)
TOTAL CASH AND CASH EQUIVALENTS$

224,042
1,340,261$ 1,564,303

$

$
$

$
$
$
$

CASH FLOWS FROM INVESTING ACTIVITIES:
Loans made to students, faculty, and staff
Payments received on student, faculty, and staff loans
Change in other notes receivable
Proceeds from the sales and maturities of investments
Purchase of investments
Change associated with repurchase agreements
Additions to fixed assets
NET CASH PROVIDED BY INVESTING ACTIVITIESCASH FLOWS FROM FINANCING ACTIVITIES:
Change in overdrafts included in accounts payable
Change in split interest liability from new contributions, income and payments to annuitants
Proceeds from issuance of debt
Debt repayments
Proceeds from the sales of gifts of restricted securities
Gifts for restricted purposes
Affiliated entity contributions and distributions, net
Change in government loan advances
NET CASH PROVIDED BY FINANCING ACTIVITIESSupplemental disclosure of cash flow information:
Accounts payable related to fixed asset additions
Cash paid for interest
Non-cash proceeds from issuance of debt
Use of non-cash proceeds to refinance debt

(123,330)
89,344
527,463

40,225
223,715

176,615
1,183,983$ 1,360,598
35,237
212,831450,000(450,000)

The accompanying notes are an integral part of the consolidated financial statements.
HARVARD UNIVERSITY  FINANCIAL STATEMENTS

17

1. UNIVERSITY ORGANIZATION
Harvard University (the “University”) is a private, not-forprofit institution of higher education with approximately
5,200 undergraduate and 13,400 graduate students infiscal year 2021, as compared to 6,700 undergraduate and13,600 graduate students in fiscal year 2020. Establishedin 1636, the University includes the Faculty of Arts andSciences, the John A. Paulson School of Engineering andApplied Sciences, the Division of Continuing Education, ten
graduate and professional Schools, the Radcliffe Institutefor Advanced Study, a variety of research museums andinstitutes, and an extensive library system to support theteaching and research activities of the Harvard community.

The President and Fellows of Harvard College (the“Corporation”), a governing board of the University, hasoversight responsibility for all of the University’s financial
affairs. The Corporation delegates substantial authority to
the Schools and departments for the management of theirresources and operations.
The University includes Harvard Management Company(HMC), a wholly owned subsidiary founded in 1974 to
manage the University’s investment assets. HMC isgoverned by a Board of Directors that is appointed by
the Corporation.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESBasis of presentation
The accompanying consolidated financial statements
have been prepared on the accrual basis of accounting
and include the accounts of the University and affiliatedorganizations controlled by the University. Significant interaffiliate accounts and transactions have been eliminated.
Funds transferred to the University on behalf of specificbeneficiaries (agency funds) are recorded as assets andliabilities in the Balance Sheets and are not included in theStatement of Changes in Net Assets with General Operating
Account Detail.
The financial statements include certain prior year
summarized comparative information in total, not by net
asset classification. This information is not presented in
sufficient detail to conform to generally accepted accounting
principles (GAAP). Accordingly, such information should
be read in conjunction with the University’s financial
statements for the year ended June 30, 2020, from which
the summarized information is derived. Certain prioryear amounts have been reclassified to conform to current
year presentation.

Net asset classifications
For the purposes of financial reporting, the University
classifies resources into two net asset categories pursuant
to any donor-imposed restrictions and applicable law.
Accordingly, the net assets of the University are classified
in the accompanying financial statements in the categories
that follow:

HARVARD UNIVERSITY  NOTES TO FINANCIAL STATEMENTSWITHOUT DONOR RESTRICTIONS — Net assets not subject todonor-imposed restrictions. Funds invested in fixed assets
and unrestricted endowment funds comprise 85% of the
University’s net assets without donor-imposed restrictions
as of June 30, 2021. In addition, this category includes
gifts and endowment income balances where the donor
restriction has been met, University-designated loan funds,
and other current funds.
WITH DONOR RESTRICTIONS — Net assets subject tolegal or donor-imposed restrictions that will be satisfied
either by actions of the University, the passage of time,or both. These net assets include net assets subject todonor-imposed restrictions that are invested to provide aperpetual source of income to the University. Generally,
donors of these assets require the University to maintainand invest the original contribution in perpetuity, but
permit the use of some or all investment returns for generalor specific purposes. The appreciation on these perpetual
contributions must be reported as net assets with donor
restrictions until appropriated for spending in accordancewith Massachusetts law. Also included in this category
are gifts donated for a particular purpose and amounts
subject to time restrictions such as funds pledged for
future payment.
Revenues from sources other than contributions are
generally reported as increases in net assets without donor
restrictions. Expenses are reported as decreases in net
assets without donor restrictions. Gains and losses

18

on investments are reported as increases or decreases in
net assets without donor restrictions, unless their use
is restricted by donor stipulations or by law. Investment
returns earned by restricted donor funds are initiallyclassified as net assets with donor restrictions and thenreclassified to net assets without donor restrictions when
expenses are appropriated or incurred for their intended
purpose. Expirations of donor restrictions on net assets
are reported as reclassifications from net assets withdonor restrictions to net assets without donor restrictions
and appear as “Net assets released from restrictions” and“Non-operating net assets released from restrictions” in theStatements of Changes in Net Assets.

Liquidity and availability
As part of the University’s liquidity management, it hasa policy to structure its financial assets to be available asits general expenditures, liabilities and other obligations
come due. A significant portion of the University’s annual
expenditures are funded by operating revenues in thecurrent year including student income, sponsored support,
endowment returns made available for operations, gifts for
current use and other revenues.
The University’s financial assets available within one yearof the balance sheet date for general expenditure, such as
operating expenses, scheduled principal payments on debt,
and capital construction costs not financed with debt, are as
follows (in thousands):
June 30,
2021

FINANCIAL ASSETS
Cash and cash equivalents
Receivables, net
Pledge receivables due in one year
Cash, cash equivalents and short-term investments held separately by General Operating Account (GOA)1
Endowment and GOA returns made available for operations in the following year
TOTAL FINANCIAL ASSETS AVAILABLE WITHIN ONE YEAR
LIQUIDITY RESOURCES
Credit facility, undrawn balanceTax-exempt commercial paper, undrawn balanceTaxable commercial paper, undrawn balance
TOTAL FINANCIAL ASSETS AND RESOURCES AVAILABLE WITHIN ONE YEAR$

224,042
322,482
347,284
1,539,736
2,308,724

2020$

176,615
262,731
340,017
1,559,440
2,184,082$ 4,742,268$ 4,522,885

1,500,000
1,000,000
2,000,000

1,500,000
1,000,000
2,000,000$ 9,242,268$ 9,022,885

1 The University has a policy of maintaining liquidity outside of the General Investment Account (GIA) through a combination of cash, cash equivalents andshort-term investments, as referenced on page 8 in the Financial Overview.

Endowment and GOA returns liquidated from investments
and made available for operations over the course of the
fiscal year are distributed to University department andprogram budgets to spend, subject to donor restrictions
where applicable.

Revenue recognition

While the University has no intention of doing so, there
are additional investments held by the University and theendowment that could be liquidated in the event of an
unexpected disruption. While a portion of the endowment
is subject to donor restrictions, there is $9.4 billion and$7.4 billion in endowment funds without donor restrictions
at June 30, 2021 and 2020, respectively and $4.8 billion
and $3.5 billion of General Operating Account investments(GOA) at June 30, 2021 and 2020, respectively, that could beaccessed with the approval of the Corporation and subject tothe redemption provisions described in Note 3.

Student income is derived from degree programs as well
as executive and continuing education programs andincludes tuition, fees, and board and lodging. Student
income is recognized ratably over the academic period of
the course or program offered based on time elapsed, andscholarships awarded to students reduce the amount ofrevenue recognized. The University’s individual schools
have various billing and academic cycles and the majority ofour programs are completed within the fiscal year. Student
income received in advance of services to be rendered isrecorded as deferred revenue which totaled $226.0 million
and $208.3 million, respectively, at June 30, 2021 and2020, which are primarily recognized in the subsequentfiscal year.

HARVARD UNIVERSITY  NOTES TO FINANCIAL STATEMENTS

Revenue is recognized when control of promised goods
or services is transferred to customers, in an amount thatreflects the consideration the University expects to beentitled to in exchange for those goods or services.

19

Total student income of $888.3 million and $1.1 billion
was recorded during the years ended June 30, 2021 and2020, respectively. Student tuition, fees, board and lodging
at published rates is summarized as follows for the years
ended June 30, 2021 and 2020 (in thousands of dollars):
Undergraduate program
Graduate and professional degree programsContinuing education and executive programs
Board and lodging

2021$ 278,412
581,259
395,076
69,4962020$ 347,292
613,614425,867
164,372

Scholarships applied to student charges were $435,959 and $480,989 for theyears ended June 30, 2021 and 2020, respectively.

Unconditional contributions including pledges arerecognized immediately and classified as either net
assets with donor restrictions or net assets without
donor restrictions. Conditional contributions for whichcash is received are accounted for as a liability withindeferred revenue.
Sponsored support of $926.7 million includes support
from governmental and private sources. Certain sponsoredarrangements are considered exchange arrangements,
and revenue under these agreements is recognized basedon the University’s fulfillment of the contract, which
is typically based on costs incurred or the achievementof milestones. Other sponsored support is considered
contribution revenue, which is recognized when any
donor-imposed conditions have been met, if applicable.
Sponsored conditional contributions received, where thebarrier to entitlement is not yet overcome, are recorded
as deferred revenues of $68.2 million and $51.2 million
as of June 30, 2021 and 2020, respectively. As of June 30,
2021, the University also had $1.6 billion awarded but not
yet expended contributions related to sponsored programs
where the condition had not yet been met. This is subject
to federal appropriations. Funding received in advance ofrecognition is recorded as deferred revenue.
Other revenue of $693.9 million includes several revenue
streams considered exchange contracts with customers
totaling $605.3 million for fiscal year 2021. These revenues
are recognized at the point in time goods or services areprovided. Deferred revenues related to other income of$102.1 million and $107.6 million were recorded as ofJune 30, 2021 and 2020, which are primarily recognized in
the subsequent fiscal year.

HARVARD UNIVERSITY  NOTES TO FINANCIAL STATEMENTS

Measure of operations
Revenues earned, expenses incurred, and returns madeavailable for operations for the purpose of teaching,conducting research, and the other programs and servicesof the University are the components of “Net operating
surplus” in the Statement of Changes in Net Assets with
General Operating Account Detail. The University’s nonoperating activity within the Statement of Changes in Net
Assets with General Operating Account Detail includes
contributions to the University’s building construction andrenovation funds, investment returns (net of amounts madeavailable for operations), change in pledge balances, longterm benefit plan obligation funding changes, and otherinfrequent transactions.

Collections
The University’s vast array of museums and libraries
contains priceless works of art, historical treasures, literaryworks, and artifacts. These collections are protected andpreserved for public exhibition, education, research, andthe furtherance of public service. They are neither disposedof for financial gain nor encumbered in any manner.
Accordingly, such collections are not recorded for financial
statement purposes. Proceeds on deaccessioned collections
are used to fund new collections or the direct care ofexisting collections. Direct care is defined as general carefor the preservation of a collection.

Insurance programs
The University, together with the Harvard-affiliatedteaching hospitals, has formed a captive insurancecompany, Controlled Risk Insurance Company (CRICO), toprovide limited professional liability, general liability, andmedical malpractice insurance for its shareholders. The
University self-insures a portion of its professional liability
and general liability programs and maintains a reserve forincurred claims, including those related to Harvard Medical
School activities not occurring in the affiliated teaching
hospitals. CRICO provided malpractice coverage applies
with no deductible for medical professionals practicing
within Harvard’s University Health Services department,
the School of Dental Medicine, and the T.H. Chan Schoolof Public Health. The University also maintains reserves
for the self-insured portion of claims related to automobile
liability, property damage, and workers’ compensation;these programs are supplemented with commercial excess
insurance above the University’s self-insured retention. In
addition, the University is self-insured for unemployment,20

the primary retiree health plan, and all health and dental
plans for active employees. The University’s claims
liabilities are recognized as incurred, including claims thathave been incurred but not reported, and are included inoperating expenses.

Tax
The University is a tax-exempt organization under
Section 501(c)(3) of the Internal Revenue Code.
On December 22, 2017, the Tax Cuts and Jobs Act (the“Act”) was enacted. The Act impacts the University inseveral ways, including the addition of excise taxes on
executive compensation and net investment income, as
well as new rules for calculating unrelated business taxable
income. The University records an estimate for related tax
expense based on currently available regulatory guidance of
the Act, and continues to evaluate the impact of the Act on
current and future tax positions.

Use of estimates
The preparation of financial statements in accordance with
U.S. GAAP requires management to make estimates andassumptions that affect reported amounts and disclosures.
Actual results could differ from those estimates.

New accounting pronouncements
Effective July 1, 2020, the University adopted ASU 2019-03,
Not-for-Profit Entities (Topic 958):Updating the Definition ofCollections. The accounting pronouncements updates thedefinition of “collections” to align with the definition usedby the American Alliance of Museums. The change inthe definition requires proceeds from sales of collections
to be used for acquisition of additional collections ordirect care of existing collections. The University adopted
ASU 2019-03 prospectively. The guidance did not havea significant impact on the University’s consolidated
financial statements.
Effective July 1, 2019, the University adopted ASU 2017-07,
Compensation — Retirement Benefits (Topic 715): ImproVing
the Presentation of Net Periodic Pension Cost and Net Periodic
Postretirement Benefit Cost. The amendment requires
the bifurcation of net benefit cost where the service cost
component continues to be presented with other employee
costs in operating income (or capitalized in assets) and theother components (such as interest, expected return on plan

HARVARD UNIVERSITY  NOTES TO FINANCIAL STATEMENTS

assets, and amortization of actuarially determined amounts)
are required to be presented as a nonoperating change innet assets without restrictions. The effects of adopting thisamendment resulted in the inclusion of all net periodic
benefits costs, other than services costs, in “Change inretirement obligations”, reported in nonoperating activities
in the Statement of Changes in Net Assets with General
Operating Account Detail.
Effective July 1, 2019, the University adopted ASU 2016-02,
Leases, which requires a lessee to recognize a right ofuse asset and a lease liability, initially measured at thepresent value of the lease payments, in its balance sheet.
The guidance also expands the required quantitative andqualitative disclosures surrounding leases. The effects
of adopting this guidance resulted in the inclusion of
the present value of operating lease payments in the
Balance Sheets as “Operating leases — right of use assets”
of $780.5 million and “Operating leases liabilities” of$794.7 million upon adoption. The University elected the
package of practical expedients to not reassess: (1) whether
any expired or existing contracts are or contain leases,(2 lease classification for any expired or existing leases and(3) initial direct costs for any expired or existing leases.
The University elected the short-term lease exemption
policy as well as the practical expedient that allows lessees
to treat the lease and non-lease components as a single
lease component. In addition, the University elected touse hindsight to reassess lease terms or impairment at the
adoption date. The effects of adopting this amendment are
addressed in Note 18.
Effective July 1, 2019, the University adopted ASU 2016-18,
Restricted Cash (Topic 230): Statement of Cash Flows. The
amendments in the update require that a statement of cash
flows explain the change during the period in the total of
cash, cash equivalents, and amounts generally described
as restricted cash or restricted cash equivalents. Therefore,amounts generally described as restricted cash andrestricted cash equivalents are now included with cash andcash equivalents when reconciling the beginning-of-period
and end-of-period total amounts shown on the statement ofcash flows. The effects of adopting this amendment resulted
in all cash and cash equivalents, including those held in theendowment, to be included in cash and cash equivalents
presented in the Statements of Cash Flows.

21

Effective July 1, 2019, the University adopted ASU 2016-15,
Classification of Certain Cash Receipts and Cash Payments(Topic 230): Statement of Cash Flows. ASU 2016-15 clarifies
how certain cash receipts and cash payments in thestatement of cash flows are presented. The University
adopted ASU 2016-15 retrospectively. The guidance did nothave a significant impact on the University’s consolidated
financial statements.
Effective July 1, 2019, the University adopted ASU 2016-01,
Recognition and Measurement of Financial Assets and Financial
Liabilities, which addresses certain aspects of recognition,measurement, presentation and disclosure of financial
instruments. This guidance allows an entity to choose,investment-by-investment, to report an equity investmentthat neither has a readily determinable fair value, norqualifies for the practical expedient for fair value estimation
using net asset value (NAV), at its cost minus impairment(if any), plus or minus changes resulting from observable
price changes in orderly transactions for the identical orsimilar investment of the same issue. Impairment of suchinvestments must be assessed qualitatively at each reporting
period. Entities must disclose their financial assets andliabilities by measurement category and form of asset
either on the face of the statement of financial position
or in the accompanying notes. This guidance did nothave a significant impact on the University’s consolidated
financial statements.
In August 2018, FASB issued ASU No. 2018-15,
Intangibles — Goodwill and Other — Internal-Use Software(Subtopic 350-40): Customer’s Accounting for Implementation
Costs Incurred in a Cloud Computing Arrangement That is
a SerVice Contract. This guidance aligns the requirements
for capitalizing implementation costs incurred in a hostingarrangement that is a service contract with the requirements
for capitalizing implementation costs incurred to develop
or obtain internal-use software or software licenses.
The amendment is effective for fiscal year 2022 and the
University is evaluating the impact of the new guidance on
the consolidated financial statements.

3. INVESTMENTS
Investments are presented at fair value in accordance withGAAP and under the guidelines prescribed by the HMC
investment valuation policy, which is reviewed and approvedby the HMC Board of Directors on an annual basis.

The majority of the University’s investments are managed
by HMC in the GIA, a pooled investment account thatconsists primarily of endowment assets. Certain otherinvestments such as cash, short-term investments, split
interest agreements and other assets, are managed
separately from the GIA.

The University’s investment holdings as of June 30, 2021 and 2020 are summarized in the following table (in thousandsof dollars):
2021

2020

Investment portfolio assets
Pooled general investment account assets
Other investments
Investment portfolio, at fair value
Securities pledged to counterparties, at fair value
TOTAL INVESTMENT ASSETS$ 58,566,261
2,575,489
61,141,750
290,388
61,432,138$ 45,681,215
2,430,226
48,111,441
214,010
48,325,451

Pooled general investment account liabilities
Interest rate exchange agreement
TOTAL OTHER LIABILITIES ASSOCIATED WITH THE INVESTMENT PORTFOLIOTOTAL INVESTMENTS, NET

724,924
31,313756,237$ 60,675,901

833,777
44,241
878,018$ 47,447,433

HARVARD UNIVERSITY  NOTES TO FINANCIAL STATEMENTS22

As of June 30, 2021 and 2020, University net investments were comprised of the following components (in thousandsof dollars):
POOLED GENERAL INVESTMENT ACCOUNT
Endowment1
General operating account
Split interest agreements
Other internally designated funds
TOTAL POOLED GENERAL INVESTMENT ACCOUNT NET ASSETSOTHER INVESTMENTS OUTSIDE THE GENERAL INVESTMENT ACCOUNT
General operating and other investments2
Split interest agreements
TOTAL OTHER INVESTMENTS OUTSIDE THE GENERAL INVESTMENT ACCOUNTTOTAL INVESTMENTS, NET

2021

2020

$ 51,279,803
4,777,430
1,021,209
1,053,283$ 58,131,725$ 39,982,475
3,486,092
803,490789,391$ 45,061,448

1,772,698
771,478$ 2,544,176$ 60,675,901

1,771,698
614,287$ 2,385,985$ 47,447,433

1 Includes only the portion of the endowment invested in the GIA and excludes pledges, interests in trusts held by others, other non-GIA investments, and GIA

interest and dividends net of all internal and external management fees and expenses.

2 Consists primarily of repurchase agreements, US government securities, money markets, and fixed income funds, net of unsettled trades, totaling $1,563,715

and $1,582,042 as of June 30, 2021 and 2020, respectively.

Investment return
A summary of the University’s total return on investments for fiscal years 2021 and 2020 is presented below (in thousandsof dollars):
Return on pooled general investment account:
Realized and change in unrealized appreciation, net
Interest, dividend, fees, and expenses, net
Total return on pooled general investment account1
Return on other investments:
Realized and change in unrealized appreciation, net
Interest, dividend, fees, and expenses, net
Total return on other investments
Realized and change in unrealized appreciation/(depreciation) on interest rate exchange agreement, net
TOTAL RETURN ON INVESTMENTS 2

2021

2020

$ 14,522,886
20,216
14,543,102$ 2,931,018
83,852
3,014,870

218,572
26,093$244,665
9,272$ 14,797,039

9,834
45,685$55,519(19,070)$ 3,051,319

1 Net of internal and all external management fees and expenses.
2 Total return on investments is comprised of returns on the endowment, GOA, Split Interest Agreements and other.

Fair value hierarchy
The University’s investments have been categorized based
upon the fair value hierarchy in accordance with ASC 820,
which prioritizes the inputs to valuation techniques used tomeasure fair value of investment assets and liabilities into
three levels:
LEVEL 1 Unadjusted quoted prices in active markets thatare accessible at the measurement date for identical,
unrestricted assets or liabilities;
LEVEL 2 Quoted prices in markets that are not considered tobe active or financial instruments for which all significant
inputs are observable, either directly or indirectly;

HARVARD UNIVERSITY  NOTES TO FINANCIAL STATEMENTSLEVEL 3 Prices or valuations that require inputs
that are significant to the fair value measurement,
unobservable and/or require the University to develop its
own assumptions.
Investments in externally managed funds where theUniversity utilizes net asset values (as reported byexternal managers) as a practical expedient for fair value
measurements are excluded from the fair value hierarchy.
The level of an asset or liability within the fair value
hierarchy is based on the lowest level of any input that issignificant to the fair value measurement. The University
endeavors to utilize all relevant and available information inmeasuring fair value.

23

The following is a summary of the levels within the fair value hierarchy for those investment assets and liabilities subject tofair value measurement as of June 30, 2021 and summarized as of June 30, 2020 (in thousands of dollars):
2021

Level 1ASSETS:Cash and cash equivalents1
Repurchase agreements
Domestic equity
Foreign equity
Global equity
Domestic fixed income
Foreign fixed income
Emerging market equity and debt
High yield
Hedge funds
Private equity
Natural resources
Real estate
Inflation-indexed bonds
Due from brokers
Other investments
INVESTMENT ASSETS SUBJECT TO
FAIR VALUE LEVELING
Other investment assets not subject to fair value2
TOTAL INVESTMENT ASSETS 3
Interests in trusts held by others4

Level 2

$ 1,340,261$

50,0632,354,507
183,240
1,256,155
1,920
32,4652,051$ 1,956,807
1,971,680
2,351,562
1,133,259

10,0034,529,686$

273,571
1,891,116

14,30023,8591,156,229
3,981$ 6,345,109

$

5,305
35,532

4,625

100,903$ 2,193,171

515,757

NON-INVESTMENT ASSETS SUBJECTTO FAIR VALUE LEVELINGTOTAL ASSETSLIABILITIES:Due to brokers5
Other liabilities subject to fair value
INVESTMENT LIABILITIES SUBJECTTO FAIR VALUE LEVELING

Level 32020
NAV asPractical
Expedient$$

0

Other investment liabilities not subject tofair value6
TOTAL INVESTMENT LIABILITIES
Liabilities due under split interest agreements4
NON-INVESTMENT LIABILITIES SUBJECTTO FAIR VALUE LEVELINGTOTAL LIABILITIES$$

515,757$

148,728$

148,728

131,941

131,941

1,019,357$ 1,019,357

18,030,872
18,796,946
449,978
2,883,237$ 52,104,027

Total

Total

$ 1,340,261
50,063
4,311,314
2,154,920
2,351,562
2,399,417
1,920
4,562,151
275,622
18,030,872
20,688,062
464,278
2,907,096
1,156,229
13,91135,532$ 1,183,983
477,918
3,615,658
1,867,503
1,542,236
2,712,900
20,7293,256,427
267,728
15,515,652
11,047,118
1,329,924
3,209,643
935,440
30,293
6,712$ 60,743,210
688,928$ 61,432,138
515,757$ 47,019,864
1,305,587$ 48,325,451
427,359$
515,757$ 61,947,895$
427,359$ 48,752,810$

131,941
148,728$132,065
246,410$

280,669$

378,475$

475,568
756,237
1,019,357$

499,543878,018
819,584$ 1,019,357$ 1,775,594$
819,584$ 1,697,602

1 This excludes money markets held in “Cash and cash equivalents” on the Balance Sheets of $65.0 million as of June 30,2021 and 2020, respectively, which are

Level 1 investments.

2 As of June 30, 2021, other assets not subject to fair value consists primarily of receivables for transactions that settled subsequent to the balance sheet date of$612,801. As of June 30, 2020, other assets not subject to fair value consists primarily of receivables for transactions that settled subsequent to the balance sheet
date of $1,189,950, before eliminating inter-company balances, and consolidated assets of $146,365.
3 As of June 30, 2021 and 2020, total investment assets, net equal $60,675,901 and $47,447,433, respectively.
4 Amounts excluded from investments and included separately on the University’s Balance Sheets.
5 Includes fair value of an interest rate exchange agreement on the University’s debt portfolio of $31,313 and $44,241 as of June 30, 2021 and 2020, respectively.
6 As of June 30, 2021 and 2020, other liabilities not subject to fair value include consolidated liabilities of $11,925 and $167,795, respectively.

HARVARD UNIVERSITY  NOTES TO FINANCIAL STATEMENTS

24

The following is a rollforward of Level 3 investments for the year ended June 30, 2021 and the condensed June 30, 2020
rollforward of Level 3 investments (in thousands of dollars).
Beginningbalance as ofJuly 1, 2020
INVESTMENT ASSETS:
High yield
Private equity
Natural resources
Real estate
Due from brokers
Other investments
INVESTMENT ASSETSSUBJECT TO FAIR VALUELEVELING
Interests in trusts held by others
NON-INVESTMENT ASSETSSUBJECT TO FAIR VALUELEVELING$

Net changeNetrealized in unrealized
gains/ appreciation/
Purchases/
Sales/(losses) (depreciation)1 contributions distributions

264,452 $ 2,142
477,858(528)
1,291,911(5,756)
24,627
4,629
6,712

$

7,806
388,813(317,207)(5,768)(4)$ 2,070,189 $ (4,142)
427,359$ 73,640
90,076$$ 90,076

427,359

TOTAL ASSETS SUBJECTTO FAIR VALUE LEVELING$ 2,497,548 $ (4,142)

INVESTMENT LIABILITIES:Other liabilities subject to fair value$

246,410TOTAL LIABILITIES SUBJECTTO FAIR VALUE LEVELING$

246,410 $NET ASSETS SUBJECT TO
FAIR VALUE LEVELING$ 2,251,138 $ (4,142)0$ 163,716$

0$ 163,716$

84,723400,340
27,0095,000$ 517,072$(85,552)(66,815)(570,840)

EndingTransfers
out of balance as ofLevel 3 June 30, 2021

Transfers
into Level 3$$ 740,943$ (481,324)(214)$ 2,193,171$ 515,757$$$(723,207)(1,464)$(1,464)$(724,671)$ (134,980) $37,298$

148,728$ (134,980) $37,298$

148,728$ 517,072$ 652,052$(761,969)$ 740,943(6,712)

273,571
1,891,116
0
23,8594,625
0$ (49,495)(425,117)$ 740,943$ 740,943(214)$ (481,538)$ (481,538)

515,757$ 2,708,928$ 2,560,200

1 Total change in unrealized appreciation/(depreciation) relating to Level 3 investment assets and investment liabilities still held by the University at June 30,

2021 is $206,133 and is reflected in “Realized and change in unrealized appreciation, net” in the Statements of Changes in Net Assets.

Beginningbalance as ofJuly 1, 2019
PRIOR YEAR NET ASSETS SUBJECTTO FAIR VALUE LEVELINGNet changeNetrealized in unrealized
gains/ appreciation/
Purchases/
Sales/(losses) (depreciation)1 contributions distributions$ 2,594,348 $ 87,592$ (198,967)$ 1,000,889$ (1,232,724)

EndingTransfers
out of balance as ofLevel 3 June 30, 2020

Transfers
into Level 3
$

0

$

0

$ 2,251,138

1 Total change in unrealized appreciation/(depreciation) relating to Level 3 investment assets and investment liabilities still held by the University at June 30,

2020 is $(233,329) and is reflected in “Realized and change in unrealized appreciation, net” in the Statements of Changes in Net Assets.

At June 30, 2021, certain private equity investments werevalued using a secondary sale price and were transferred
into Level 3. In October 2020, the University sold a portionof its direct natural resource portfolio to a third-party andtransferred a portion to an external investment manager.
As of June 30, 2021, the fair value of these investments
are measured at NAV as reported by the external
investment manager.

The University’s investment strategy incorporates adiversified asset allocation approach and maintains,
within defined limits, exposure to the movements of the
global public and private equity, fixed income, real estate,
and commodities markets. Exposure to these markets
is achieved through direct investments in individual
securities, investments in special purpose vehicles
and/or through investments in vehicles advised byexternal managers.

Investment strategy and risk
The University utilizes a number of wholly owned
subsidiary entities to support its investment activities.
The consolidated financial statements include all assets,
liabilities, income, and expenses associated with these
entities and intercompany accounts and transactions havebeen eliminated during consolidation.

HARVARD UNIVERSITY  NOTES TO FINANCIAL STATEMENTS

Investments in global markets involve a multitude ofrisks such as price, interest rate, market, sovereign,
currency, liquidity and credit risks, amongst manyothers. The University manages exposure to these risks
through established policies and procedures related toits ongoing investment diligence and operational due

25diligence programs. The University also considers manager
concentration risk. As of June 30, 2021, 18% of the GIA
NAV was invested across 5 diversified fund managers. The
University anticipates that the value and composition of its
investments may, from time to time, fluctuate substantiallyin response to any or all of the risks described herein.

estimated impact of those restrictions. Investments in nonexchange traded debt and equity instruments are primarily
valued using inputs provided by independent pricing
services or by broker/dealers who actively make markets inthese securities.

Derivatives
Cash and cash equivalents
Cash and cash equivalents are recorded at cost, whichapproximates fair value, and includes cash in bank accounts,
institutional money market funds and other temporary
investments held for working capital purposes withoriginal maturities of three months or less. Cash and cash
equivalents do not include cash balances held as collateralby the University. Cash and cash equivalents designatedfor investment purposes are included in the “Investment
portfolio, at fair value” in the Balance Sheets.

Repurchase agreements
The University Balance Sheets display the assets generated
by repurchase transactions. The University enters into thesetransactions under agreements containing master netting
arrangements. The University requires the fair value of thecollateral exchanged under these agreements to be equal toor in excess of the total amount of the agreement, includinginterest where applicable. At June 30, 2021 and 2020
the University had gross asset repurchase agreements of$0.1 billion and $0.5 billion which were fully collateralized.
The University does not offset repurchase agreementsthat are subject to master netting arrangements or similararrangements on the University’s Balance Sheets.

Dividend and interest income
Dividend income is recognized net of applicable
withholding taxes on the ex-dividend date. Non-cash
dividends are recorded at the fair value of the securities
received. Interest income and expense is recorded net of
applicable withholding taxes, on an accrual basis. The
University amortizes bond premiums and accretes bonddiscounts using the effective yield method and when cash
collection is expected.

Traded securities
Instruments listed or traded on a securities exchange arevalued at the last quoted price on the primary exchange
where the security is traded. Where there is no readily
available closing price on the valuation date, long positions
are valued at the bid price and short positions are valued at
the ask price. Restrictions that are attached to a security arefactored into the valuation of that security, reflective of the

HARVARD UNIVERSITY  NOTES TO FINANCIAL STATEMENTS

The University uses a variety of financial instrumentswith off-balance sheet risk involving contractual or
optional commitments for future settlement, which areexchange traded or executed over the counter (OTC). These
instruments are used to (1) manage exposure to certain
asset classes and/or various market risks, (2) arbitrage
mispricings of related securities and (3) to manage theinterest, cost and risk associated with its outstanding and/or future debt. These instruments are classified as due
to/from brokers and may include option, swap, credit
default, interest rate, and forward contracts. These types of
instruments are primarily valued using industry standard
models with independent market inputs, or by broker
quotes. Inputs such as prices, spreads, curves, and/or broker
quotes are evaluated for source reliability and consistency
with industry standards. Counterparty marks obtained
and utilized to determine daily collateral requirements
are also used to corroborate input reasonability. The
University considers current market conditions includinginterest rate and credit risks in its evaluation of inputs,
pricing methodologies, and models utilized to determine
fair values.
In connection with its investments in derivatives, theUniversity maintains master netting agreements andcollateral agreements with its counterparties. These
agreements provide the University the right, in the eventof default by the counterparty (such as bankruptcy or a
failure to pay or perform), to net a counterparty’s rights andobligations under the agreement and to liquidate and offset
collateral against any net amount owed by the counterparty.
Collateral, generally in the form of debt obligations issued
by the US Treasury, is exchanged on a daily basis asrequired by fluctuations in the market.
Specific credit limits are established for counterparties
based on their individual credit ratings. Credit limits
are monitored daily by the University and are adjusted
according to policy, as necessary. Some of the financial
instruments entered into by the University contain creditrisk-related contingency features that allow the parties to theagreement to demand immediate payment for outstanding
contracts and/or collateral.

26

The following table presents information about the University’s derivatives by primary risk exposure for the years ended
June 30, 2021 and 2020 (in thousands of dollars):

Primary risk exposure
Equity instruments
Fixed income instruments1
Currency instruments
Credit instruments
SUBTOTALAs of June 30, 2021
Average
Gross
Gross
Quarterly
derivative
derivative
Notional
assetsliabilities$ 5,904,280$ 88,221$ 179,670
117,000
31,313
7,951
5,966
5,963
4,747
4,729
$ 98,916$ 216,946

For theyear ended
June 30, 2021
Net profit/(loss)4$ (726,954)
9,272
3,163
(49)
$ (714,568)

As of June 30, 2020
Average
Gross
Gross
Quarterly
derivative
derivative
Notional
assetsliabilities$ 3,443,938$ 59,867$ 122,097
117,000
44,241
21,020
10
14
4,723
4,703
$ 64,580$ 166,352

TOTAL COUNTERPARTY
NETTING 2(85,005)(85,005)(34,984)(34,984)

NET AMOUNTS INCLUDEDIN THE BALANCE SHEETS 3

13,911

131,941

29,596

131,368

3,183

250,592

23,586

189,564

TOTAL SECURITIES COLLATERALRECEIVED/POSTED 5

8,650

250,592

23,586

189,564

NET AMOUNT

5,261(118,651)

6,010(58,196)0$ 6,010

Collateral
Cash collateral received/posted
Securities collateral
received/posted5

NET AMOUNT IN ACCORDANCEWITH ASC 2106

For theyear ended
June 30, 2020
Net profit/(loss)4$ 92,208(19,070)(150)
21$ 73,009

5,467$ 5,261$$0

1 For the year ended June 30, 2021 and 2020 the balance represents an interest rate exchange swap on the University’s debt portfolio.
2 GAAP permits the netting of derivative assets and liabilities and the related cash collateral received and paid when a legally enforceable master netting

agreement exists between the University and a derivative counterparty.

3 Included within the “Investment portfolio, at fair value” and “Other liabilities associated with the investment portfolio” line items of the Balance Sheets.
4 Included within “Realized and change in unrealized appreciation, net” within the Statements of Changes in Net Assets.
5 Includes securities posted to meet initial margin requirements on exchange traded futures.
6 Excludes any over-collateralized amounts in accordance with ASC 210.

External advisors
Investments managed by external advisors include
investments in private equity, real estate, natural resources,
hedge funds, and other externally managed funds. The
University generally utilizes the capital account balance
provided by the external advisor as a practical expedient
to fair value. To evaluate the adequacy of these fair value
measurements, the University has assessed factors
including, but not limited to, the external advisor’s
adherence to fair value principles in calculating the capital
account balance, the existence of transactions at NAV at
the measurement date and the existence or absence ofPrivate equity funds
Real estate funds
Other externally managed funds3
TOTAL

Fair value1$ 16,240,336
2,881,483
3,654,807$ 22,776,626

certain restrictions at the measurement date. In addition,
the University evaluates these external advisors throughongoing due diligence and operational oversight, which
includes an analysis of an advisor’s use of and adherence tofair value principles.
The University, as an investor, has commitments to makeperiodic contributions in future periods to the investments
managed by external advisors. The amounts of these
expected disbursements as of June 30, 2021 and 2020 are
disclosed below (in thousands of dollars):

As of June 30, 2021
Remaining
unfunded
Estimated
commitments
remaining life2$ 7,688,416
4 – 101,856,495
4 – 102,921,156
2–8$ 12,466,067

Fair value1$ 9,017,706
3,154,066
3,386,081$ 15,557,853

As of June 30, 2020
Remaining
unfunded
Estimated
commitments remaining life2$ 6,813,583
4 – 101,734,565
4 – 102,221,023
2–8$ 10,769,171

1 Represents the fair value of the funded portion of investments with remaining unfunded commitments.
2 The estimated remaining lives of these funds, expressed in years, are forward-looking projections based on the University’s estimates and could vary significantly

depending on the investment decisions of external managers, changes in the University’s investment portfolio, and other circumstances.

3 Investments in externally managed funds primarily include exposures to hedge funds and natural resources.

HARVARD UNIVERSITY  NOTES TO FINANCIAL STATEMENTS

27

Investments in externally managed funds generally have
limited redemption options for investors and, subsequent
to final closing, may or may not permit subscriptions by
new or existing investors. These entities may also have theability to impose gates, lockups and other restrictions on an
investor’s ability to readily redeem out of their investment
interest in the fund.

Direct investments
Direct investments are primarily valued using a
combination of independent appraisals and/or one ormore industry standard valuation techniques (e.g., income
approach, market approach, or cost approach). The income
approach is primarily based on the investment’s anticipatedfuture income using one of two principal methods: thediscounted cash flow method or the capitalization method.
Inputs and estimates developed and utilized with thesetechniques may be subjective, unobservable, and require
judgment regarding significant matters such as estimating
the amount and timing of future cash flows, forward pricing
assumptions and the selection of discount and capitalization
rates that appropriately reflect market and credit risks.

The market approach derives investment value throughcomparison to recent and relevant market transactions
with similar investment characteristics. The cost approach
is utilized when the cost of the investment is determined
to be the best representation of fair value. This method istypically used for newly purchased or undeveloped assets.
When applicable, the University examines market dataand collaborates closely with independent appraisers toarrive at the best estimation of fair value for each respective
asset. The HMC Board of Directors discusses the valuation
process and results with HMC management, and makes
determinations on significant matters impacting valuationthat may arise from time to time.
The following table presents the ranges of significant
unobservable inputs used to value the University’s Level 3
assets. While the inputs described below represent therange of inputs utilized as of the measurement date, these
inputs may change over time, which may have a material
effect on the valuation of these types of investments inthe future.

As of June 30, 2021

Significant unobservable input
by asset class1
Natural resources:
Income approach discount rate
Price per planted hectare
Price per gross hectare
Discount for lack of marketability
High yield:
Income approach discount rate
Collateral coverage recovery rate
EBITDA multiple
Real estate:
Income approach discount rate
Income approach growth rate
Discount for lack of marketability
Private equity:
Income approach discount rate
EBITDA multiple
Cost multiple
Other liabilities subject to fair value
Loan to valueMarket interest rate
NET AMOUNTLevel 3
investments
subject tofair value(in thousandsof dollars)2$0

Range ofinputs utilized in
valuation model3

As of June 30, 2020
Weighted
averageof inputs
utilized in
valuation
model

Level 3
investments
subject tofair value(in thousandsof dollars)2$ 469,811

239,573

Range ofinputs utilized in
valuation model3

Weighted
averageof inputs
utilized in
valuation
model

6.0% – 16.0%$1,073 – $156,351$168 – $57,530
2.0% – 20.0%

10.8%$36,646$10,393
16.7%

6.8% – 15.8%
100%
9.0X – 19.5X

8.6%
100%
13.3X

14.5%
3.0%
15.0%

14.5%
3.0%
15.0%

6.0% – 15.0%
8.7X

14.0%
8.7X

5.0% – 43.5%
3.5% – 6.5%

16.8%
3.9%

264,027
6.0% – 16.1%
100%
7.5X – 19.0X

7.7%
100%
8.8X

14.5%
3.0%
15.0%

14.5%
3.0%
15.0%

6.0% – 15.0%
9.0X
2.5X

14.3%
9.0X
2.5X

17,391

22,868207,033

150,294(148,728)(246,410)
2.5% – 2.8%

$ 315,269

2.6%$

660,590

1 The fair value of investments may be determined using multiple valuation techniques.
2 Included within Level 3 investments is $2,244,931 and $1,590,548 as of June 30, 2021 and 2020, respectively, which were valued using other inputs including,but not limited to, single source broker quotations, third party pricing and recent transactions.

3 The range of inputs encompasses a variety of investment types within each asset class.

HARVARD UNIVERSITY  NOTES TO FINANCIAL STATEMENTS

28

4. RECEIVABLES
The major components of receivables, net of reserves for
doubtful accounts of $13.7 million and $13.9 million as ofJune 30, 2021 and 2020, respectively, were as follows (inthousands of dollars):

2021
73,40057,32155,05832,731
20,774
11,536
7,985
63,677$ 322,482$

Executive education
Federal sponsored support
Publications
Leases
Tuition and fees
Non-federal sponsored support
Gift receipts
Other
TOTAL RECEIVABLES, NET

2020
50,15561,93948,0850
22,1089,950
9,263
61,231$ 262,731$

5. NOTES RECEIVABLE
Notes receivable are recorded initially at face value plus accrued interest, which approximates fair value. Notes receivable, andrelated allowance for doubtful accounts, were as follows (in thousands of dollars):Student loans:
Government revolving
Institutional
Total student loans
Faculty and staff loans
Other loans
TOTAL

Receivable

2021
Allowance$$

31,93377,306109,239
252,090
57,615$ 418,944

$

832
2,237
3,069
179
38,10041,348Government revolving loans are funded principally withfederal advances to the University under the Perkins
Loan, the Health Professions Student Loan (HPSL) andLoans for Disadvantaged Students in Health Professions(LDS) Programs. These advances totaled $35.8 million and$44.7 million as of June 30, 2021 and 2020, respectively,
and are classified as liabilities in the Balance Sheets. During
fiscal year 2018, the Perkins Loan Program ended and as aresult the University began making required repayments
to the government. In fiscal year 2021 the University madethe requested $8.8 million repayment. Interest earned on
the revolving and institutional loan programs is reinvested
to support additional loans. The repayment and interest rate
terms of the institutional loans vary considerably.
Faculty and staff notes receivable primarily consists ofmortgage and educational loans. Mortgages include
shared appreciation loans, loans that bear interest at theapplicable federal rate and interest-free loans. In addition,

HARVARD UNIVERSITY  NOTES TO FINANCIAL STATEMENTS

Net$

31,10175,069106,170
251,911
19,515$ 377,596

Receivable

2020
Allowance$$

39,382
83,000122,382244,642
39,257$ 406,281

$

999
2,284
3,283
179
30,58534,047

Net$38,38380,716
119,099
244,463
8,672$ 372,234

certain mortgages that bear interest at the current market
rate or applicable federal rate may be subsidized for an
initial period. The educational loans are primarily zerointerest loans.
The University assesses the adequacy of the allowancefor doubtful accounts by evaluating the loan portfolio,
including such factors as the differing economic risks
associated with each loan category, the financial conditionof specific borrowers, the economic environment in which
the borrowers operate, the level of delinquent loans, thevalue of any collateral, and, where applicable, the existenceof any guarantees or indemnifications. In addition tothese factors, the University reviews the aging of the loans
receivable and the default rate in comparison to prior years.
The allowance is adjusted based on these reviews. The
University considers the allowance at June 30, 2021 and2020 to be reasonable and adequate to absorb potential
credit losses inherent in the loan portfolio.

29

6. PLEDGES RECEIVABLE
Unconditional promises to donate to the University in the
future are initially recorded at fair value (pledge net of
discount) and subsequently amortized over the expected
payment period, net of an allowance for uncollectible
pledges. The University’s indicative 1- to 5-year taxable
unsecured borrowing rate is used to discount pledges
receivable at the end of the fiscal year they are received.
Discounts of $76.3 million and $100.2 million for the years
ended June 30, 2021 and 2020, respectively, were calculatedusing rates ranging from 0.77% to 3.10%.
Pledges receivable included in the financial statements asof June 30, 2021 and 2020 are expected to be realized asfollows (in thousands of dollars):Within one year
Between one and five years
More than five years
Less: discount and allowance foruncollectible pledges
TOTAL PLEDGES RECEIVABLE, NET2021$ 660,300
1,673,468
257,2322020$ 651,310
1,646,632
353,091(255,042)$ 2,335,958(247,858)$ 2,403,175

Pledges receivable as of June 30, 2021 and 2020 havebeen designated for the following purposes (in thousandsof dollars):
2021

2020

General Operating Account balances:
Gifts for current use
Non-federal sponsored awards
Construction and life income
Total General Operating Account balances$ 533,952
184,113352,8021,070,867$ 624,440
193,641
265,741
1,083,822

Endowment
TOTAL PLEDGES RECEIVABLE, NET

1,265,091$ 2,335,958

1,319,353$ 2,403,175

Because of uncertainties with regard to realizability
and valuation, bequest intentions and other conditional
promises are only recognized as assets if and when thespecified conditions are met. Non-bequest conditional
pledges totaled $115.1 million and $56.7 million as ofJune 30, 2021 and 2020, respectively.

7. FIXED ASSETS
Fixed assets are reported at cost or, if a gift, at fair value
as of the date of the gift, net of accumulated depreciation.
Depreciation is computed using the straight-line method
over the estimated useful lives of the assets.

Research facilities
Classroom and office facilities
Housing facilities
Other facilities
Service facilities
Libraries
Museums and assembly facilities
Athletic facilities
Land
Construction in progress
Equipment
SUBTOTAL AT COST
Less: accumulated depreciation
FIXED ASSETS, NET

The major categories of fixed assets as of June 30, 2021 and2020 are summarized as follows (in thousands of dollars):

2021$ 3,364,398
2,395,225
2,408,385
460,640
1,065,126
534,930
987,906
259,254
1,024,697
401,316
1,429,723
14,331,600(5,868,592)$ 8,463,008

2020$ 2,494,333
2,401,659
2,264,147
455,847804,215
509,095
979,825
246,291
1,042,977
1,401,333
1,367,264
13,966,986(5,531,731)$ 8,435,255

Estimated useful life
(in years)
*
35
35
35
35
35
35
35
N/A
N/A
**

* Estimated useful lives of components range from 10 to 45 years.
** Estimated useful lives of equipment range from 3 to 10 years.

HARVARD UNIVERSITY  NOTES TO FINANCIAL STATEMENTS

30

Certain University facilities are subject to restrictions as
to use, structural modifications, and ownership transfer.
Included in the fixed asset balances are restricted facilities
with a net book value of $280.7 million and $304.6 million
as of June 30, 2021 and 2020, respectively.
The costs of research facilities are separated into theshell, roof, finishes, fixed equipment, and services. These
components are separately depreciated.
Equipment includes general and scientific equipment,
computers, software, furniture, and vehicles.

The University has asset retirement obligations of$200.1 million and $200.7 million, which are included
in “Deferred revenue and other liabilities” in the Balance
Sheets as of June 30, 2021 and 2020, respectively.
Right-of-use assets from finance leases of $59.0 million
and $67.0 million are included in “Fixed assets” in the
Balance Sheets as of June 30, 2021 and 2020, respectively.
Lease liabilities from finance leases of $96.8 million and$104.9 million are included in “Deferred revenue and otherliabilities” in the Balance Sheets as of June 30, 2021 and2020, respectively.

8. ENDOWMENT AND GENERAL OPERATING ACCOUNT NET ASSETSThe University’s net assets consisted of the following as of June 30, 2021 and 2020 (in thousands of dollars):
2021
Without
donor
restrictions

With donor
restrictions

2020

Total

Without
donor
restrictions

With donor
restrictions

Total

NATURE OF SPECIFIC NET ASSETS
Perpetual endowment funds
Endowment funds and appreciation subject todistribution policy and appropriation
Endowment funds without restriction, board
designated and subject to distribution policy
Pledge balancesInterests in trusts held by others
TOTAL ENDOWMENT
Operating
Unexpended contributions andendowment distributions
Student loan funds
TOTAL GENERAL OPERATING ACCOUNT
Split interest agreements (Note 9)
TOTAL NET ASSETS$ 8,562,120 $ 8,562,120
33,434,803

33,434,803

1,265,091
480,684
43,742,698

9,423,055
1,265,091
480,684
53,165,753
6,588,391$ 9,423,055

9,423,055
6,588,391

2,747,969
2,747,969
99,631
99,631
6,588,391
2,847,600
9,435,991
773,330
773,330$ 16,011,446 $ 47,363,628 $ 63,375,074

Endowment
The University’s endowment consists of 14,172 separate
funds established over many years for a wide variety of
purposes. Endowment fund balances are classified andreported in accordance with donor specifications andstate law. The endowment includes both donor-restricted
endowment funds and funds functioning as endowment
which are not subject to donor-imposed restrictions,however decisions to spend their principal require theapproval of the Corporation and therefore are classified as
Board-designated endowment funds. The majority of theendowment is invested in the GIA (Note 3).
The University is also the beneficiary of certain irrevocable
trusts held and administered by others. The estimated fairvalues of trust assets, which include the present valuesof expected future cash flows from outside trusts and the

HARVARD UNIVERSITY  NOTES TO FINANCIAL STATEMENTS$ 8,178,308 $ 8,178,308
24,628,858

24,628,858

1,319,353
393,051
34,519,570

7,374,810
1,319,353
393,051
41,894,380
4,922,307$ 7,374,810

7,374,810
4,922,307

2,655,577
2,655,577
99,25999,2594,922,307
2,754,836
7,677,143
598,193598,193$ 12,297,117 $ 37,872,599 $ 50,169,716

fair value of the underlying assets of perpetual trusts, arerecognized as assets and increases in net assets when therequired trust documentation is provided to the University.
The fair values of these trusts are provided by the external
trustees and are adjusted annually by the University.
These are included as Level 3 investments in the fair value
hierarchy table in Note 3.
The University’s endowment distribution policies aredesigned to preserve the value of the endowment in realterms (after inflation) and generate a predictable streamof available income. Each fall, the Corporation approves
the endowment distribution for the following fiscal year.
Distribution from an underwater endowment fund (a fundbelow its historic dollar value) could continue in limited anddefined circumstances under the University’s endowment

31

distribution policy. To the extent that the fair value of adonor restricted endowment fund falls below its historic
dollar value it would be reported as a reduction of net assets
with donor restrictions.
At June 30, 2021 and 2020, funds in a deficit position
were reported in net assets with donor restrictions and arecomprised as follows (in thousands):
2021

2020

Fair value of underwater endowment funds
Historic dollar value$ 23,401
24,253$ 20,355
22,605TOTAL DEFICIT OF UNDERWATERENDOWMENT FUNDS$$ (2,250)(852)

The endowment distribution is based in part on
presumptive guidance from a formula that is intended toprovide budgetary stability by smoothing the impact ofannual investment gains and losses. The formula’s inputs
reflect expectations about long-term returns and inflation
rates. For fiscal year 2021, the endowment distribution
approved by the Corporation (prior to decapitalizations) was
equal to 5.2% of the fair value of the endowment invested
in the GIA as of the beginning of the fiscal year. The total

endowment distribution made available for operations
was $2.0 billion in fiscal year 2021 and 2020.
Each year the Corporation also approves certain
decapitalizations from the endowment to support strategic,
mission-critical activities or objectives that are typically
one-time or time-limited and therefore, are excluded fromnet operating surplus. These decapitalizations totaled$32.8 million and $35.7 million in fiscal year 2021 and2020, respectively. These additional decapitalizations, in
combination with the endowment distribution, resulted
in an aggregate payout rate of 5.2% in fiscal year 2021
and 2020.

General operating account
The GOA consists of the general or current funds of the
University as well as the assets and liabilities related to
student and faculty loans and facilities. The GOA accepts,
manages, and pays interest on deposits made by University
departments; invests surplus working capital; makes loans;
and arranges external financing for major capital projects.
It is used to manage, control, and execute all University
financial transactions, except for those related to investment
activities conducted by HMC.

9. SPLIT INTEREST AGREEMENTS
Under split interest agreements, donors enter into trust
or other arrangements with the University in which the
University receives benefits that are shared with otherbeneficiaries and institutions. Split interest agreement (SIA)
investment assets are invested primarily in the GIA andpublicly-traded securities, a small segment is managed by
an external advisor, and all are recorded in the “Investment
portfolio, at fair value” in the University’s Balance Sheets.
Additional disclosures are included in Note 3. Associatedliabilities are recorded at the present value of estimatedfuture payments due to beneficiaries and other institutions.

These liabilities are calculated using the University’scurrent taxable unsecured borrowing rate of 1.0% and 0.8%
as of June 30, 2021 and 2020, respectively. All split interest
agreement net assets and the respective activity are reported
within net assets with donor restrictions. Upon terminationof a split interest agreement, the net assets are transferredto the GOA or endowment accordingly.
The changes in split interest agreement net assets forfiscal years 2021 and 2020 were as follows (in thousandsof dollars):
2021

Investment return:
Investment income
Realized and change in unrealized appreciation, net
Total investment return
Gifts (Note 14)1
Payments to annuitants
Transfers to endowment
Transfers between SIA and the GOA
Change in liabilities and other adjustments
NET CHANGE DURING THE YEAR
Total split interest agreement net assets, beginning of year
TOTAL SPLIT INTEREST AGREEMENT NET ASSETS, END OF YEAR

$

$

9,961
402,937
412,898
10,761(71,358)(16,830)(21,019)(139,315)
175,137
598,193773,330

2020$$

13,10137,42050,521
9,709(66,351)(12,136)(11,916)
54,997
24,824573,369
598,1931 Shown at net present value. The undiscounted value of these gifts was $35,078 and $27,237 for the years ended June 30, 2021 and 2020, respectively.

HARVARD UNIVERSITY  NOTES TO FINANCIAL STATEMENTS

32

Split interest agreement net assets as of June 30, 2021 and 2020 consisted of the following (in thousands of dollars):
2021
Split interest agreement investments (Note 3)
Charitable remainder trusts
Charitable lead trusts
Charitable gift annuities
Pooled income funds
Total split interest agreement investments1$ 1,170,553
116,254
342,917
162,963
1,792,687

Liabilities due under split interest agreements:
Amounts due to beneficiaries
Amounts due to other institutions
Total liabilities due under split interest agreements

2020$(930,260)(89,097)(1,019,357)$

TOTAL SPLIT INTEREST AGREEMENT NET ASSETS, END OF YEAR

773,330

936,417
94,401
255,696
131,263
1,417,777(751,217)(68,367)(819,584)$

598,193

1 For the year ended June 30, 2021, $1,021,209 of SIA investments are held in the pooled general investment account and $771,478 of SIA investments are heldin the other investments outside the general investment account. For the year ended June 30, 2020, $803,490 of SIA investments are held in the pooled generalinvestment account and $614,287 of SIA investments are held in the other investments outside the general investment account. Refer to Note 3.

10. BONDS AND NOTES PAYABLE
Bonds and notes payable as of June 30, 2021 and 2020 were as follows (in thousands of dollars):
Fiscal yearof issueFiscal year of
final maturity1

Effective
rate2

Outstanding principal
20213
20203

2000-2006
2000

2032
2036

0.03%
0.06%
0.04%

2010
2011
2017
2020

2022
2024
2041
2031

4.9%
4.9%
4.0%
4.0%
4.0%

1,487,675
346,680
1,883,945

49,59097,7401,513,780
346,680
2,007,790

3.6%

2,133,050

2,256,895

5.6%
6.5%
4.9%
3.4%
3.3%
2.5%
4.1%

243,000
500,000
300,000
402,000
1,000,000
500,000
2,945,000

243,000
500,000
300,000
402,000
1,000,000
500,000
2,945,000

4.1%

2,945,000

2,945,000

Various88,355355,467(18,673)$ 5,503,199

87,841
395,046(20,103)$ 5,664,679

TAX-EXEMPT BONDS:
Variable-rate demand bonds:
Series R – daily
Series Y – weekly
Total variable-rate bonds
Fixed-rate bonds:
Series 2010A
Series 2010B
Series 2016A
Series 2020A
Total fixed-rate bonds
TOTAL TAX-EXEMPT BONDS$

131,200
117,905
249,105

49,590$131,200
117,905
249,105

TAXABLE BONDS
Fixed-rate bonds:
Series 2008A
Series 2008D
Series 2010C
Series 2013A
Series 2016B
Series 2020B
Total fixed-rate bonds

2008
2009
2011
2013
2017
2020

2039
2039
2041
2038
2057
2051

TOTAL TAXABLE BONDS
Notes payable
Unamortized original issuance premium/discount, net
Unamortized bond issuance costs
TOTAL BONDS AND NOTES PAYABLE

Various

Various

3.9%

1 The weighted average maturity of the portfolio on June 30, 2021 was 18.3 years.
2 For fixed-rate bonds the effective rate is calculated as: coupon rate x (par value / book value*). For variable rate bonds the effective rate is the average rateof the past one year. Effective rates are exclusive of the Series Y interest rate exchange agreement, which would increase the overall portfolio rate by 0.07%(3.95% vs. 3.88%). *Book value = par value + unamortized original issuance premium - unamortized original issuance discount, underwriter’s discount,and cost of issuance.
3 Par only — balances exclude original issuance premiums/discounts.

HARVARD UNIVERSITY  NOTES TO FINANCIAL STATEMENTS

33

Interest expense related to bonds and notes payable, netof amortization and accretion, was $180.6 million and$179.5 million for fiscal 2021 and 2020, respectively.
The interest expense in the Statement of Changes in Net
Assets with General Operating Account Detail includes
additional components related to capital leases. Excluding
unamortized discounts and premiums, unamortizedunderwriter’s discount and unamortized cost of issuance,scheduled principal payments are (in thousands of dollars):
Fiscal year
2022
2023
2024
2025
2026
Thereafter
TOTAL PRINCIPAL PAYMENTS

Principal payments$
96,90442,06092,25341,441
100,967
4,792,780$ 5,166,405

Bonds and notes payable decreased from $5.7 billion to$5.5 billion, primarily due to maturing fixed rate bonds andfixed rate bonds paid down at their call date.
The University is rated Aaa by Moody’s Investors Service
and AAA by Standard & Poor’s Global Ratings. The Moody’s
Investors Service rating was re-affirmed in February
2021 and the Standard & Poor’s rating was re-affirmed in
March 2021.
The University has one unsecured, revolving credit facility
with a syndicate of banks totaling $1.5 billion, which expires
in March 2024. The facility was renewed in March of 2021.
There was no outstanding drawn balance on the credit
facility at June 30, 2021.

The University has taxable commercial paper available
totaling $2 billion. There was no outstanding drawn balanceon the taxable commercial paper line at June 30, 2021.
The University has tax-exempt commercial paper available
totaling $1 billion. There was no outstanding drawn balanceon the tax-exempt commercial paper line at June 30, 2021.
As of June 30, 2021, the University had $249.1 millionof variable rate demand bonds outstanding with eithera daily or weekly interest rate reset. In the event that the
University receives notice of any optional tender on its
variable rate demand bonds, or if the bonds become subject
to mandatory tender, the purchase price of the bonds will be
paid from the remarketing of such bonds. However, if theremarketing proceeds are insufficient, the University will
have a general obligation to purchase the bonds tenderedwith cash on hand.

Interest rate exchange agreements
In fiscal 2021, the University had in place one interest rateexchange agreement, used to manage the interest cost andrisk associated with a portion of its outstanding variable
rate debt.
The fair value of the interest rate exchange agreement was$(31.3) million and $(44.2) million as of June 30, 2021 and2020, respectively, and is recorded in “Other liabilities
associated with the investment portfolio” on the University’s
Balance Sheets.

11. EMPLOYEE BENEFITSThe University offers current employees a choice of
health plans, a dental plan, short-term and long-term
disability plans, life insurance, tuition assistance, anda variety of other benefits such as subsidized passes for
public transportation and for Harvard athletic facilities.
In addition, the University has retirement plans covering
substantially all employees.
The University uses a measurement date of June 30 for its
pension and postretirement health plans.

HARVARD UNIVERSITY  NOTES TO FINANCIAL STATEMENTS

457(b) deferred compensation plan
The University offers a non-qualified deferredcompensation plan under Internal Revenue Code 457(b)to a select group of employees. There is no University
contribution related to the plan. The University hasrecorded both an asset and a liability related to the plan of$207.8 million as of June 30, 2021 and $163.6 million asof June 30, 2020; the assets are included in “Prepayments
and deferred charges” and the liabilities are included in“Deferred revenue and other liabilities” on the University’s
Balance Sheets.

34

Pension benefits

Postretirement health benefits

All eligible faculty members and staff are covered byretirement programs that include a defined benefit
component, a defined contribution component, or a
combination of the two.

The University provides postretirement health coverage andlife insurance to substantially all of its employees. As ofJune 30, 2021, the University had internally designated andinvested $1.0 billion in the GIA to fund the postretirement
health benefit accrued liability of $1.0 billion. As of June 30,
2020, the University had internally designated and invested$779.8 million to fund the postretirement health benefit
accrued liability of $955.6 million.

In accordance with the Employee Retirement Income
Security Act (ERISA) requirements, the University has
established a trust to hold plan assets for its defined benefit
pension plans. The fair value of the trust’s assets was$1.1 billion and $959.4 million as of June 30, 2021 and2020, respectively. During fiscal years 2021 and 2020,
the University made cash contributions to the defined
benefit pension plan of $61.2 million and $53.5 million,
respectively. The University recorded expenses for its
defined contribution plans of $153.4 million for fiscal year
2021 and 2020.

The following table sets forth the pension and postretirement
plans’ funded status that is reported in the Balance Sheets asof June 30, 2021 and 2020 (in thousands of dollars):Pension benefits
2021
2020
Change in projected benefit obligation:
Projected benefit obligation, beginning of year
Service cost
Interest cost
Plan participants’ contributions
Plan change
Gross benefits paid
Actuarial (gain)/loss
Special termination benefits1$ 1,220,094
12,95036,673$ 1,129,397
11,926
40,625(103,677)(26,555)460(45,090)
42,471
40,765

1,139,945

1,220,094

959,414
144,732
61,224

863,492
87,47953,533

PROJECTED BENEFIT OBLIGATION, END OF YEAR 2

Postretirement health benefits
2021
2020
$

955,571
32,96132,7288,361
0(25,125)(4,101)$ 854,639
31,88031,529
6,999(10,339)(24,256)
65,1191,000,395

955,571

17,257
6,999(24,256)

Change in plan assets:
Fair value of plan assets, beginning of year
Actual return on plan assets
Employer contributions
Plan participants’ contributions
Gross benefits paid

(103,677)(45,090)

16,765
8,361(25,126)

FAIR VALUE OF PLAN ASSETS, END OF YEAR

1,061,693

959,4140

0(78,252)$ (260,680)$ (1,000,395)$ (955,571)

UNFUNDED STATUS 3$

1 Represents costs associated with a voluntary early retirement program offered to plan participants.
2 Measurement of the University’s pension obligation including assumed salary increases (required by GAAP).
3 These amounts totaling $1,078,647 as of June 30, 2021 and $1,216,251 as of June 30, 2020 are included in the “Accrued Retirement Obligations” line in the

Balance Sheets.

The accumulated pension benefit obligation (ABO) is ameasurement of the University’s pension benefit obligation,
based on past and present compensation levels and does notinclude assumed salary increases. The ABO was $1.0 billion
at June 30, 2021 and 2020. The funded status disclosed

HARVARD UNIVERSITY  NOTES TO FINANCIAL STATEMENTS

above has been prepared in accordance with pension
accounting rules. When measured on an IRS funding basis,
which informs the University’s required cash contribution
amount, the plan was overfunded at January 1, 2021.

35

Net periodic benefit cost
Components of net periodic benefit cost and other amounts recognized in the Statements of Changes in Net Assets with
General Operating Account Detail are summarized as follows for the years ended June 30, 2021 and 2020 (in thousandsof dollars):Pension benefits
2021
2020
Components of net periodic benefit cost:
OperatingService cost
Special termination benefits
Total operating activity
Non-operating
Interest cost
Expected return on plan assets
Amortization of:Actuarial loss/(gain)
Prior service cost/(credit)
Total non-operating activity1
Total net periodic benefit cost
Other amounts recognized in non-operating activity
in unrestricted net assets:
Current year net actuarial loss/(gain)
Current year net prior service cost
Amortization of:Prior service (cost)/credit
Actuarial (loss)/gain
Total other amounts recognized in non-operating activity1
TOTAL RECOGNIZED IN STATEMENTS OF CHANGES IN NETASSETS WITH GENERAL OPERATING ACCOUNT DETAIL$

Postretirement health benefits
2021
2020

12,950460
13,410$ 11,926
40,76552,691$ 32,961$ 31,880

32,961

31,88036,673(47,300)

40,625(44,856)

32,72831,52916,230288
5,891
19,301

15,682288
11,73964,430(5,116)(7,929)19,68352,644(11,189)(7,126)
13,21445,094(123,987)(151)(4,101)
065,119(10,339)(288)(16,230)(140,505)(288)(15,682)(16,121)

7,929
5,116
8,944

7,126
11,18973,095$ (121,204)$ 48,309$ 61,588$ 118,189

1 These amounts totaling ($105,987) in fiscal year 2021 and $81,927 in fiscal year 2020 include gains and losses and other changes in the actuarially determined

benefit obligations arising in the current period but that have not yet been reflected within net periodic benefit cost/(income) and are included in the “Change
in Retirement Obligations” line in the Statements of Changes in Net Assets with General Operating Account Detail.

Cumulative amounts recognized as non-operating changes in net assets without donor restrictions are summarized asfollows for the years ended June 30, 2021 and 2020 (in thousands of dollars):

Net actuarial loss/(gain)
Prior service cost/(credit)$

CUMULATIVE AMOUNTS RECOGNIZED IN UNRESTRICTED NET ASSETS$

The estimated net actuarial loss and prior service cost forthe defined benefit plan that will be amortized from net
assets without donor restrictions into net periodic benefit(income)/cost in fiscal year 2022 are $7.2 million and$0.3 million, respectively. The estimated net actuarial gain

HARVARD UNIVERSITY  NOTES TO FINANCIAL STATEMENTS

Pension benefits
2021
2020
40,596$ 180,814
607
894

Postretirement health benefits
2021
2020
$ (167,932)$ (168,947)(41,670)(49,599)

41,203$ (209,602)$ 181,708$ (218,546)

and estimated prior service credit for the postretirement
health benefit that will be amortized from net assets
without donor restrictions into net periodic benefit(income)/cost in fiscal year 2022 are ($4.6) million and($7.9) million, respectively.

36

Other assumptions and health care cost trend rates used in determining the year end obligation as well as the net periodic
benefit (income)/cost of the pension and postretirement health plans are summarized as follows for fiscal years 2021
and 2020:
Pension benefits
2021
2020
Weighted-average assumptions used to determine benefit obligation
as of June 30:
Discount rate
Compensation increase trend:
Average rate
Cash balance (or similar formula) interest crediting ratePension increases for in-payment benefits increase trend:
Average rate
Initial rate
Ultimate rate
Year of ultimate
Health care cost trend rate:
Current rate
Ultimate rate
Year of ultimate
Weighted-average assumptions used to determine net periodic
benefit (income)/cost:
Discount rate
Expected long-term rate of return on plan assets
Compensation increase trend:
Average rate
Initial rate
Ultimate rate
Year of ultimate
Pension increases for in-payment benefits increase trend:
Average rate
Health care cost trend rate:
Initial rate
Ultimate rate
Year of ultimate

Postretirement health benefits
2021
2020

3.15%

3.15%

3.20%

3.35%

3.50%

3.50%

3.50%

3.50%

5.25%

5.25%

N/A

N/A

0.25%
N/A
N/A
N/A

N/A
0.00%
0.25%
2025

N/A
N/A
N/A
N/A

N/A
N/A
N/A
N/A

N/A
N/A
N/A

N/A
N/A
N/A

6.50%
4.75%
2025

6.50%
4.75%
2025

3.15%
5.50%

3.65%
5.50%

3.35%
N/A

3.60%
N/A

3.50%
0.00%
0.25%
2025

3.50%
N/A
N/A
N/A

3.50%
N/A
N/A
N/A

3.50%
N/A
N/A
N/A

0.00%

0.15%

N/A

N/A

N/A
N/A
N/A

N/A
N/A
N/A

6.50%
4.75%
2025

5.00%
4.75%
2023

As an indicator of sensitivity, a one percentage point change in assumed health care cost trend rate would affect 2021
as shown in the following table (in thousands of dollars):
Effect on 2021 postretirement health benefits service and interest cost
Effect on postretirement health benefits obligation as of June 30, 2021

The expected return on pension plan assets is determinedby utilizing an independent advisor’s capital markets model,
which takes into account the expected real return, before
inflation, for each of the pension portfolio’s asset classes,
as well as the correlation of any one asset class to every
other asset class. This model calculates the real returns
and correlations and derives an expected real return for the

HARVARD UNIVERSITY  NOTES TO FINANCIAL STATEMENTS

1% point increase$ 13,947
191,261

1% point decrease$ (15,316)(149,959)

entire portfolio, given the percentage weighting allocated toeach asset class. After calculating the expected real return,an assessment is made to accommodate the expected
inflation rate for the forthcoming period. The final expected
return on assets is the aggregate of the expected real returnplus the expected inflation rate.

37

Plan assets
The actual asset allocation of the investment portfolio for the pension plan at June 30, 2021 and 2020, along with target
allocations for June 30, 2022, is as follows:
2022 Target

June 30, 2021

June 30, 2020

70-80%
15-30
1-5
0

77.0 %
19.8
3.2
0.0
100.0 %

59.0 %
36.2
1.5
3.3
100.0 %

Asset allocation by category for pension plan:
Fixed income securities
Equity securities
Cash
Hedge funds
TOTAL OF ASSET ALLOCATION CATEGORIES

University expects to keep this strategy in future years. The
investment program is also managed to comply with all
ERISA regulations.

The University’s investment strategy for the pension
portfolio is to manage the assets across a broad anddiversified range of investment categories, both domestic
and international. The objective is to achieve a risk-adjusted
return that is in line with the long-term obligations that the
University has to the pension plan beneficiaries. During
fiscal year 2021, the University increased its allocation
to fixed income securities to manage the interest rate
volatility associated with its pension obligations. The

The following is a summary of the levels within the fairvalue hierarchy for the pension plan assets subject to fairvalue measurement as of June 30, 2021 and 2020 (inthousands of dollars):

2021

Level 1
PLAN ASSETS:
Cash and short-term investments
Domestic equity
Foreign equity
Domestic fixed income
Foreign fixed income
Emerging market equity and debt
Hedge funds
Private equity
Due from brokers
High yield
PLAN ASSETS SUBJECT TO FAIR VALUE LEVELING
Other assets not subject to fair value
TOTAL PLAN ASSETSPLAN LIABILITIES:Due to brokers
PLAN LIABILITIES SUBJECT TO FAIR VALUE LEVELING
Other liabilities not subject to fair value
TOTAL PLAN LIABILITIES$ 57,999
104,391
31,792
208,742$ 425,819

$

(33)
(33)

Total

Total

57,999104,391
75,522746,979
8,479
22,895321
1,799
041,215$ 1,059,600
2,126$ 1,061,726$ 25,541
182,940
99,918542,181
16,21357,58430,7002,184
67
0$ 957,328
2,086$ 959,414$$ 43,730
339,858$ 198,379
8,479

321
1,799

Employer contributions of $20.0 million are expected forfiscal year 2022 to fund the pension benefit plan.

HARVARD UNIVERSITY  NOTES TO FINANCIAL STATEMENTS

Level 322,895

Expected future benefit payments

Fiscal year
2022
2023
2024
2025
2026
Thereafter

Level 22020
NAV aspractical
expedient$ 206,858$

041,215$ 426,923

$

$

0

$

0

0

$

(33)
(33) $

0$(33) $

0

The following table summarizes expected benefit payments
and subsidies for pension and other postretirement healthbenefits for the University (in thousands of dollars):Pension$ 78,669
62,79064,34265,80067,129349,262

Expected benefit payments
Postretirement health$ 25,926
28,16429,90531,51633,409199,04738

12. STUDENT FINANCIAL AID
Financial aid granted to students in fiscal 2021 and 2020 is summarized as follows (in thousands of dollars):
2021
Scholarships and other student awards:
Scholarships applied to student income1
Scholarships and other student awards paid directly to students
Total scholarships and other student awards$

Student employment
Student loans
Agency financial aid2
TOTAL STUDENT FINANCIAL AID$

435,959
160,744596,70384,27313,064
21,279715,3192020$$

480,989
163,618
644,607
81,922
14,765
19,839761,133

1 Includes $164,232 and $202,221 in fiscal 2021 and 2020, respectively, of undergraduate scholarships applied to student income.
2 Represents aid from sponsors for which the University acts as an agent for the recipient.

13. SPONSORED SUPPORT
Total expenditures funded by US government sponsors
or by institutions that subcontract federally sponsored
projects to the University were $625.0 million and$616.2 million in fiscal year 2021 and 2020, respectively.
The University’s principal source of federally sponsoredfunds is the Department of Health and Human Services.
The University also has many non-federal sources ofsponsored awards and grants, including corporations,foundations, state and local governments, foreign
governments, and research institutes.

Sponsored grants and contracts normally provide forthe recovery of direct and indirect costs. Recovery of
related indirect costs is generally recorded at fixed orpredetermined rates negotiated with the federal governmentand other sponsors. Predetermined federal indirect cost
rates have been established for the University Area, theMedical School (including the School of Dental Medicine),
and the T.H. Chan School of Public Health through fiscal
year 2024. Funds received for federally sponsored activity
are subject to audit.

14. GIFTS
Gifts are classified as net assets with or without restrictionsin accordance with donor specifications.

Additionally, gifts are categorized by purpose as “Currentuse”, “Non-federal sponsored grants”, “Endowment funds”,“Split interest agreements”, or “Loan funds and facilities”.

Gifts received for the year ended June 30, 2021 are summarized as follows (in thousands of dollars):

Current use
Non-federal sponsored grants
Endowment funds
Split interest agreements1
Loan funds and facilities
TOTAL GIFTS

Gifts received$ 545,756
211,571462,991
10,761
133,211$ 1,364,290

2021
Donor redesignations/other changes$ (4,797)(2,789)2,028
2,277$ (3,281)

Total
540,959
208,782
465,019
10,761
135,488$ 1,361,009$

1 Shown at net present value. The undiscounted value of these gifts was $35,078 for the year ended June 30, 2021.

HARVARD UNIVERSITY  NOTES TO FINANCIAL STATEMENTS

39

Gifts received for the year ended June 30, 2020 are summarized as follows (in thousands of dollars):

Current use
Non-federal sponsored grants
Endowment funds
Split interest agreements1
Loan funds and facilities
TOTAL GIFTS

Gifts received$ 483,673
206,394463,743
9,709
51,241$ 1,214,760

2020
Donor redesignations/other changes$ (6,109)(3,767)
5,460

Total
477,564
202,627
469,203
9,709
51,448$ 1,210,551$

207$ (4,209)

1 Shown at net present value. The undiscounted value of these gifts was $27,237 for the year ended June 30, 2020.

15. OTHER REVENUE
The major components of other revenue for the years ended
June 30, 2021 and 2020 were as follows (in thousandsof dollars):Publications and royalties from copyrights
Royalties from the commercialization of
intellectual property1
Services income
Rental and parking2
Health and clinic fees
Sales income
Interest income
Other student income
Other
TOTAL OTHER REVENUE

2021

2020

$ 253,113$ 239,002

107,164

61,94796,44387,646
61,461
23,7037,079
3,582
53,724$ 693,915

114,410
125,573
68,81328,4609,364
4,215
47,570$ 699,354

1 Excludes distribution to external parties.
2 The University is the lessor of space and facilities under operating leases, theincome from which is included in rental and parking.

16. OTHER EXPENSES
The major components of other expenses for the years
ended June 30, 2021 and 2020 were as follows (inthousands of dollars):

HARVARD UNIVERSITY  NOTES TO FINANCIAL STATEMENTS

Subcontract expenses undersponsored projects
Advertising
PublishingTaxes and fees
Fixed asset impairments
Insurance
Postage
Telephone
TravelOther
TOTAL OTHER EXPENSES

2021

2020

$ 161,910
40,44439,31635,29420,804
15,74913,265
10,968
1,965
45,110$ 384,825$ 152,916
38,02245,164
31,597
182,435
17,176
14,765
12,78371,08064,959$ 630,89740

17. FUNCTIONAL AND NATURAL CLASSIFICATION OF OPERATING EXPENSES
Operating expenses by functional classification for theyears ended June 30, 2021 and 2020 were as follows (inthousands of dollars):

Operating expenses are allocated functionally on a direct
basis. Operations and maintenance expenses are allocatedbased on square footage.

2021

Salaries and wages
Employee benefits
Services purchased
Depreciation
Space and occupancy
Supplies and equipment
Interest
Scholarships and other student awards
Other expense and overhead allocations
TOTAL EXPENSES

Instruction andacademic support$ 1,111,716
305,452
354,294
47,18782,442
68,242
17,840(39,494)$ 1,947,679$

Research1
306,555
76,866
91,675
147,189
56,06355,497
31,203400,693$ 1,165,741

Student services
and support$ 140,842
52,67945,082
16,487
27,742
34,903
12,653
160,744
15,301$ 506,433

Institutional
support andauxiliary$ 517,552
143,129
153,648
199,366
150,669
52,055
121,759
8,325$ 1,346,503

Total$ 2,076,665
578,126
644,699
410,229
316,916
210,697
183,455
160,744384,825$ 4,966,356

1 The methodology used to allocate expenses for financial statement purposes is different than methodologies used for other purposes, such as

governmental surveys.
2020

Salaries and wages
Employee benefits
Services purchased
Depreciation
Space and occupancy
Supplies and equipment
Interest
Scholarships and other student awards
Other expense and overhead allocations
TOTAL EXPENSES

Instruction andacademic support$ 1,090,715
287,492
350,815
46,454
103,658
82,003
16,908

Research1$ 304,443
76,702
86,969117,990
59,11749,27430,38021,252$ 1,999,297

399,932$ 1,124,807

Student services
and support$ 148,043
52,25956,722
17,35130,64539,975
12,503
163,618
25,281$ 546,397

Institutional
support andauxiliary$ 588,310
204,299
175,979
195,060
170,743
72,618120,936
184,432$ 1,712,377

Total$ 2,131,511
620,752
670,485
376,855
364,163
243,870
180,727
163,618
630,897$ 5,382,878

1 The methodology used to allocate expenses for financial statement purposes is different than methodologies used for other purposes, such as

governmental surveys.

18. COMMITMENTS AND CONTINGENCIES
Lease commitments
The University is the lessee of equipment and space underoperating (rental) and finance leases. The University
determines whether a contract is a lease at inception.
Identified leases are subsequently measured, classified,and recognized at lease commencement. The University
categorizes leases with contractual terms longer thantwelve months as either operating or finance. The
University’s leases generally have terms that range from
one to five years for equipment and one to twenty years forproperty, with certain leases inclusive of renewal options

HARVARD UNIVERSITY  NOTES TO FINANCIAL STATEMENTS

if they are considered to be reasonably assured at leasecommencement. Right of use assets and lease liabilities for
operating leases are included in “Operating leases — rightof use assets” and “Operating lease liabilities”, respectively,in the Balance Sheets. Finance lease right of use assets andlease liabilities are included in “Fixed assets” and “Deferred
revenue and other liabilities”, respectively, in the Balance
Sheets. Lease assets represent our right to use an underlying
asset for the lease term and lease liabilities represent our
obligation to make lease payments arising from the lease.

41

Operating and finance lease right of use assets andassociated lease liabilities are recognized based on thepresent value of future minimum lease payments to bemade over the expected lease term, using the collateralized
incremental borrowing rate at the commencement date indetermining the present value of future payments. Rent
expense related to operating leases, including short-termleases and variable lease payments, was $95.4 million and$93.9 million in fiscal year 2021 and 2020, respectively.
Maturity analysis of the annual undiscounted cash flows
reconciled to the carrying value of the operating and financelease liabilities (in thousands of dollars):
2022
2023
2024
2025
2026
Thereafter
TOTAL LEASE PAYMENTS
Less: Imputed Interest
PRESENT VALUE OF LEASE LIABILITIESOperating
Finance$ 83,819 $ 13,594
80,491
13,65571,463
11,27164,936
11,66062,073
21,749499,558
107,020862,340
178,949(159,468)(82,126)$ 702,872 $ 96,823

Weighted-average remaining lease term and discount rate
for operating and finance leases were as follows:
June 30, 2021
Weighted Average Remaining Lease Term
Operating Leases
Finance Leases
Weighted Average Discount Rate
Operating Leases
Finance Leases

15.7 YEARS
14.7 YEARS
2.4%
2.4%

The University leases properties to customers underagreements that are classified as operating or salestype leases. Property leased to others in operating leasearrangements are included in “Fixed assets” in the Balance
Sheets. Revenue is recognized to the extent that amounts are
determined to be collectible.

HARVARD UNIVERSITY  NOTES TO FINANCIAL STATEMENTS

Fixed asset-related commitments
The University has various commitments for capitalprojects involving construction and renovation of certain
facilities, real estate acquisitions, and equipment purchases,
for which the outstanding commitments as of June 30, 2021
totaled approximately $197.0 million.

Environmental remediation
The University is subject to laws and regulations concerning
environmental remediation and has established reserves
for potential obligations that management considers to beprobable and for which reasonable estimates can be made.
These estimates may change substantially dependingon new information regarding the nature and extent ofcontamination, appropriate remediation technologies,
and regulatory approvals. Costs of future environmental
remediation have been discounted to their net present value.
Management is not aware of any existing conditions that it
believes are likely to have a material adverse effect on the
University’s financial position, changes in net assets, orcash flows.

GeneralThe University is a defendant in various legal actions
arising from the normal course of its operations. While it is
not possible to predict accurately or determine the eventual
outcome of such actions, management believes that theoutcome of these proceedings will not have a material
adverse effect on the University’s financial position,changes in net assets, or cash flows.
The University has evaluated subsequent events throughOctober 13, 2021, the date the financial statements were
issued. The University has concluded that no material
events have occurred that are not accounted for in theaccompanying financial statements or disclosed in theaccompanying notes.

42

PRESIDENT AND FELLOWSOF HARVARD COLLEGE

LAWRENCE S. BACOW

OFFICERSLAWRENCE S. BACOW
President

President

PAUL J. FINNEGANPAUL J. FINNEGAN

Treasurer

Treasurer

ALAN M. GARBER
TIMOTHY R. BARAKET T
KENNETH I. CHENAULT
MARIANO-FLORENTINO (TINO)CUÉLLARWILLIAM F. LEE
BIDDY MARTIN
KAREN GORDON MILLSDIANA L. NELSONPENNY PRITZKERDAVID M. RUBENSTEINSHIRLEY M. TILGHMAN
THEODORE V. WELLS, JR.

BOARD OF OVERSEERSGERALDINE ACUÑA-SUNSHINERAPHAEL W. BOSTICMARK J. CARNEY
P. LINDSAY CHASE-LANSDALE
ALICE HM CHEN
PAUL L. CHOIPHILIP HART CULLOMJANET ECHELMANHELENA BUONANNO FOULKESCARLA A. HARRIS
MEREDITH (MAX) HODGESMARILYN HOLIFIELDCHRISTOPHER B. HOWARDDARIENNE DRIVER HUDSON
VIVIAN HUNTTYLER JACKSKETANJI BROWN JACKSONJOHN B. KING JR.
RAYMOND J. LOHIER, JR.
MARGARET PURCE
ALEJANDRO RAMÍREZ MAGAÑA
YVET TE ROUBIDEAUXRESHMA SAUJANITHEA SEBASTIANMEGAN RED SHIRT-SHAWLESLIE P. TOLBERTJAYSON U. TOWEH
KENT WALKER
SHERYL WUDUNN

ProvostKATHERINE N. LAPP
Executive Vice President

PAUL ANDREW
Vice President for Public Affairs
and Communications

MARC GOODHEART
Vice President and Secretaryof the University

MANUEL CUEVAS-TRISÀN
Vice President for Human Resources

THOMAS J. HOLLISTER
Vice President for Finance andChief Financial Officer

BRIAN K. LEE
Vice President for Alumni Affairs
and Development

DIANE LOPEZ
Vice President and General Counsel

KLARA JELINKOVA
Vice President andChief Information Officer

MEREDITH WEENICK
Vice President for Campus Services

MARTHA WHITEHEAD
Vice President for the Harvard Library