The list of Harvard University’s disaffected donors has added another billionaire: Len Blavatnik.
His family foundation has given at least $270 million to Harvard, but it’s pausing donations in the wake of university President Claudine Gay’s widely derided congressional testimony on antisemitism, according to a person with direct knowledge of the matter.
Since Hamas’ Oct. 7 attack on Israel, alumni from billionaires to recent graduates have said they’re halting gifts until the school does more to address antisemitism. The tumult is tarnishing Harvard’s brand and damaging its carefully cultivated alumni network. That in turn is threatening to dent the finances of the richest and oldest US university at a time when its investment returns are lagging and Congress is considering ways to cut federal support.
“The problem Harvard has is that all their sources of revenue are strained,” said David Bergeron, a retired deputy assistant secretary in the US Education Department. “Their ability to raise money is clearly strained and their ability to leverage federal programs is potentially at risk.”
Blavatnik, a Harvard Business School alumnus, and his wife Emily are holding back donations until the university tackles what they see as rampant antisemitism on campus, said the person familiar with their thinking, who asked not to be named because
the discussions are private.
They also expect antisemitic acts to be treated no differently from affronts to other communities. The Blavatnik foundation’s contributions have included about $200 million for Harvard’s medical school.
The donor rebellion is unfolding as Harvard faces rising costs, including for salaries, maintenance and financial aid — a cornerstone of its push to diversify the student body. Operating expenses last year totaled $5.9 billion, with salaries, wages and benefits for the university’s 20,000 professors and staff accounting for more than half the budget. Harvard’s endowment stood at $50.7 billion as of June.
During its latest fiscal year, the school got 37% of its revenue from endowment distributions, its largest source of income. Another 8% came from current-use gifts. With the recent turmoil, however, more alumni and big donors are closing their checkbooks and refusing to make fundraising calls. Harvard declined to comment on its finances.
Even if the Cambridge, Massachusetts-based institution suffers a significant drop in donations this year, it has liquidity to make up for a shortfall, said Matthew Wynter, an assistant professor of finance at Stony Brook University. That’s a contrast with 2008 and 2009, when Harvard and other universities faced a squeeze because of the market crash.
Harvard currently holds short-term investments of $1.4 billion, as well as a $1.5 billion line of credit. But if donations deteriorate enough, the downturn would start to endanger some of the school’s key goals. For example, Harvard has been spending more on financial aid for undergraduates, including $246 million in 2023. About 55% of students are estimated to receive need-based grants during the current school year, Harvard said in March. That enables families receiving support to pay an average of $13,000 annually instead of the list price of at least $83,000.
Attendance is free for students from families with annual incomes below $85,000, up from $75,000 a year before. That covers almost a quarter of undergraduates.
“That’s a legitimate concern that going forward, Harvard would not be able to fully support its financial aid program for undergrads, which is how they’re trying to maintain a diverse and accessible student body,” Wynter said. “For Harvard to continue offering a generous financial aid program and retain elite university talent and personnel, they need fundraising and their endowment.”
To the extent that donors pull back, Harvard is “going to have to cut costs somewhere, increase spending from the endowment or raise more revenue by essentially admitting more full-pay students,” said Jonathon Jacobson, a Harvard Business School alumnus and former portfolio manager for the endowment. Harvard isn’t the only elite school under pressure because of campus controversies around antisemitism. Gay and her counterparts at the Massachusetts Institute of Technology and the University of Pennsylvania drew widespread criticism for their testimony before Congress on Dec. 5, when they gave narrow legal responses over whether calling for the genocide of Jews is against school policy. Penn President Liz Magill stepped down days later. A group of Republicans in the Pennsylvania state legislature blocked a payment of more than $30 million to the university’s veterinary school.
