Financial Report

Harvard Medical School reached a financial milestone in FY22, achieving breakeven on unrestricted cash flows for the first time since FY09. This result is the culmination of years of hard work by many at HMS to secure the School’s financial health. We reached this milestone one year ahead of plan, despite uncertainty and disruptions caused by the COVID pandemic, inflation, and supply shocks exacerbated by the war in Ukraine.

As reported, according to generally accepted accounting principles (GAAP), FY22 revenues grew by $23 million, or 3 percent, to $856 million, driven by direct research revenue, additional endowment distributions attributable to strong prior year returns, continued growth in our master’s and external education programs, and other revenue, including housing, as occupancy on campus returns to pre-pandemic levels. 

Overall, FY22 expenses increased by $50 million, or 7 percent, to $815 million — which was anticipated due to strategic investments combined with our spending ramping up to pre-pandemic levels. However, the increases amounted to $2 million less than projected in the FY22 budget. The reported positive GAAP operating margin of $40 million is $30 million better than budgeted. The GAAP surplus is a reflection of having received certain gifts that are counted as revenues in one year, but with expenses being invested in subsequent years. 

This year’s strong financial results allowed us to contribute $4 million toward our stabilization reserve fund, which fortifies HMS against unanticipated economic change, and to decrease our outstanding debt by $6 million, its lowest level since 2018.

We have balanced our budget this year while continuing robust investments in our mission, our priorities, and our people. In FY22, we launched the newly constructed Gnotobiotic Core Facility, provided pandemic research supplements to junior faculty, opened a renovated Countway Library to the broader Longwood/Mission Hill community, commenced operations in the Blavatnik Harvard Life Lab Longwood, strengthened student support programs, and saw further success in our master’s and external education programs.

HMS has much to be proud of and many reasons to be optimistic. The results we achieved this year have left us better prepared to weather whatever adversity may lie ahead.

—George Q. Daley

FY 2022 Operating Revenue

Research grants and contracts $306,628,233 (36%)
Endowment distribution for operations $210,223,396 (25%)
Other revenues* $144,375,962 (17%)
Gifts for current use $111,126,593 (13%)
Rental income $46,424,565 (5%)
Net student income $37,333,737 (4%)
Total $856,112,486

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

FY 2022 Operating Expenses

Personnel costs $330,389,071 (40%)
Supplies and other expenses $241,161,448 (30%)
Research subcontracts and affiliates $112,145,989 (14%)
Plant operations and interest $83,335,838 (10%)
Depreciation $48,700,545 (6%)
Total $815,732,891