Financial Report

This past year has been an exciting one for Harvard Medical School. Our faculty achieved substantially increased sponsored funding, and as mentioned previously, we had a successful accreditation site visit by the Liaison Committee on Medical Education (LCME), sponsored by the Association of American Medical Colleges and the American Medical Association. The outcome validated the diligent efforts of the more than 150 students, faculty and staff who participated in the year-long institutional self-study and strategic planning process, which provided a deeper insight into HMS and plotted a course for an even more successful future.

The HMS medical education program received a strong endorsement from the LCME site-visit team. It is gratifying to know that the hard work and investments we made to implement the Pathways curriculum further bolstered our MD program. Countless hours were spent evaluating our curriculum, learning environment, advising programs, student services, faculty development and finances. This extensive self-reflection resulted in a number of initiatives that will support continuous quality improvement efforts and help us strategically position the School to advance its educational and clinical care missions.

All of this was achieved as the School moved closer to its goal of financial sustainability. To maintain our momentum, we will continue to rely on our close partnerships with leadership at the University and our affiliated hospitals and research institutions.

The $200 million commitment from the Blavatnik Family Foundation is advancing fundamental, curiosity-driven research and catalyzing discovery and translation across HMS. Building on the principle that investments in our community will pay long-term dividends to humanity, we are promoting collaborative learning and exploration through support from the Dean’s Innovation Grants and the Therapeutics Initiative, as well as through the establishment of the I-Hub and the increased support for enabling technologies delivered through the Foundry. These efforts, along with programs such as our epigenetics, aging and autism initiatives, are empowering faculty and staff and keeping HMS in the vanguard of biomedical research.

I’m pleased to report that HMS ended FY19 with a $52 million operating GAAP surplus—the first surplus in nearly a decade—largely due to the Blavatnik Family Foundation’s commitment and benefits from the long-term lease of the Harvard Institutes of Medicine building, executed at the end of FY18. In FY19, operating revenues totaled nearly $805 million, an increase of more than $101 million compared with the prior year. Fundraising gains, much of which will be disbursed in the future, accounted for more than half of the improvement. Notably, the School’s research revenue grew by roughly 4 percent, from $297 million to more than $308 million. Total operating expenses increased by $11 million, to $753 million. Managing our expenses while growing our revenues is challenging, but I remain focused on solidifying the underlying financial and administrative strength of the institution.

As we pursue our important work toward financial sustainability, we will continue implementing our ambitious plans for the future, ensuring that HMS remains at the forefront of research, education, service and clinical care.

—George Q. Daley

FY 2019 Operating Revenue

Research grants and contracts: $308,095,466 (38%)
Endowment distribution for operations $190,065,004 (24%)
Other revenues* $124,978,428 (15%)
Gifts for current use $105,682,511 (13%)
Rental income $45,350,422​​​​​​​ (6%)
Tuition (net) $30,611,546 (4%)
Total $804,783,377​​​​​​

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

FY 2019 Operating Expenses

Personnel costs $295,520,624 (39%)
Supplies and other expenses $224,443,446​​​​​​ (30%)
Research subcontracts and affiliates $97,397,873 (13%)
Plant operations and interest $85,551,181 (11%)
Depreciation $50,261,386​​​​​​​ (7%)
Total $753,174,511 ​​​