Financial Report

Ensuring the financial stability of Harvard Medical School is one of our highest priorities. When I became dean this past January, I was immediately impressed with our community’s collective resolve to strengthen the financial health of HMS while continuing to support our mission. In partnership with Harvard University leadership, we are putting into place a sustainable financial model that will guide our planning in the years to come.

Together, we will continue to advance our world-class research and our educational mission by ensuring that existing faculty are supported; investing in new research technologies, such as the newly launched Harvard Cryo-Electron Microscopy Center for Structural Biology in the Longwood Medical Area; and expanding programs that extend our educational influence while strengthening the School financially, including External Education programs, which are delivering HMS mission-based content to a global community.

Our commitment to the educational mission of the School will be sustained. The remarkable students in our MD program are benefiting from the redesigned Pathways medical education curriculum, and while this has resulted in a temporary increase in costs for the School, the investment is core to HMS’s mission of training physicians who will become world leaders in medicine and science. We will also continue to expand our growing complement of master’s programs in FY18 and beyond.

HMS closed FY17 with a $44 million operating deficit. In FY17, operating revenues totaled nearly $668 million, an increase of more than $11 million compared to the previous year. The School’s research revenue grew by 4 percent from $271 million to nearly $282 million. Total operating expenses increased by $19 million to total $711 million; these increases were anticipated and budgeted for. In FY18, several major initiatives will help improve our long-term financial performance. These involve cultivating philanthropy and further evaluating the School’s real estate portfolio. Our financial health is a community endeavor, which has the full and active support of our academic and administrative units.

As a community, we will honor the School’s storied history while embarking on an ambitious plan that will ensure that HMS continues as the leading institution it is today.

—George Q. Daley.

FY 2017 Operating Revenue

Research grants and contracts: $281,658,562 4 (42%)
Endowment distribution for operations $182,998,107 (27%)
Other revenues* $76,811,731 (11%)
Gifts for current use $55,592,095 (8%)
Rental income $44,747,784 (7%)
Tuition (net) $26,129,161 (4%)
Total $667,937,440

*Includes continuing medical education, publications, service income and royalties

FY 2017 Operating Expenses

Personnel costs $271,381,072 (38%)
Supplies and other expenses $208,824,765 (29%)
Research subcontracts and affiliates $98,141,592 (14%)
Plant operations and interest $81,978,142 1 (12%)
Depreciation $51,407,444 (7%)
Total $711,733,016