Harvard University's endowment grew 27% to $68 billion in the fiscal year ending June 30, adding $11 billion in real dollars. The growth allowed Harvard to fund $400 million in research activity despite a $123 million drop in federal research funding.
Harvard now faces $300 million in annual federal taxes on investment income under new rules for wealthy colleges that took effect in January.
Many other wealthy universities reported strong endowment returns. Stanford, Washington University in St. Louis, and other colleges posted gains exceeding 20% as equity markets boomed, according to a list of endowment winners in the fiscal year ending June 30.
S&P Global Ratings analysts reported in September that some institutions are drawing down endowments at elevated rates amid declining net tuition revenue. The analysts called this approach risky, trading short-term liquidity for long-term financial security. Most colleges, however, have focused on building endowments and preserving resources amid uncertainty, the analysts added.
The endowment growth comes as higher education faces pressure from demographic shifts and other factors.