Executive Education

Tuition revenue from executive programs grew by 12.3 percent to $91 million in fiscal 2007, from $81 million last year. Executive Education tuition represented 22.5 percent of total revenue, compared with 22 percent in fiscal 2006.

In fiscal 2007, HBS reaped the benefits of large strategic investments made in the previous fiscal year in product development, marketing, and corporate relations. Demand for the newly launched Comprehensive Leadership Programs portfolio and expanded offerings in both the focused and custom program portfolios combined to drive solid revenue growth.

The Executive Education unit continued to broaden its worldwide footprint in fiscal 2007, strengthening its presence in China and moving forward with plans to establish programs in India, Europe, and California in concert with the established network of HBS regional research centers.

Applications to the School's executive programs increased by 13.8 percent in fiscal 2007 to more than 12,200. Total enrollment was up by more than 1,000 to nearly 9,300, compared with enrollment growth of approximately 100 in fiscal 2006.

This was a strong year for the School's custom programs, with 11 new corporate clients and 16 percent growth in the number of participants. Enrollment in the School's open-enrollment programs grew 10 percent. Revenue from custom programs rose by 20 percent to $24 million, and open-enrollment revenue increased by 9.8 percent to $67 million.

Publishing

Revenue from HBSP's sales of periodicals, books, cases, and eLearning products increased by 7.6 percent in fiscal 2007 to $128 million, from $119 million last year. The publishing operation generated 31.6 percent of the School's total revenue, compared with 32.3 percent in fiscal 2006.

HBSP is strategically transforming its domestically focused publishing operation into a global, web-based digital information business. Continued product innovation enabled HBSP to further improve its penetration of global corporate and academic markets in fiscal 2007.

Despite sharing in an industry-wide decline in advertising revenue, the School's flagship publication, Harvard Business Review (HBR), posted its third consecutive record year. HBR is expanding its portfolio of customized product offerings to better satisfy the preferences of individual users worldwide. Broader circulation and higher foreign-edition royalties in fiscal 2007 drove revenues to $44 million, from $42 million a year earlier.

Reflecting continued solid demand in the academic market, HBS case and teaching materials' revenue grew for the sixth consecutive year in fiscal 2007 to a record $26 million. Sales of HBS Press books grew 19 percent to $25 million, fueled by strong sales of backlist titles in the individual/retail market.

Revenue from sales of HBSP eLearning products grew 13.4 percent to $15 million in fiscal 2007. International sales were strong, particularly in Western Europe and India. It was also a good year for growth in eLearning's base of large clients, as well as for customer retention.

HBSP continued investing in R&D in fiscal 2007. Chief among its future products is a line of computer-based simulations on pricing and leadership/team dynamics. HBSP also is developing a series of short cases complemented by online tools.

Looking to secure its positioning for growth in the long term, HBSP established the Harvard Business Digital unit to strengthen its web presence and advance its digital product road map. The publishing operation also continued to build the portfolio of international distribution relationships it leverages to market HBS-branded products globally.

Gifts and Endowment

The annual distribution of income from the School's endowment, together with revenue from unrestricted current use gifts, accounted for $95 million in funding in fiscal 2007, or 23.4 percent of the School's total revenue. This compares with $83 million in fiscal 2006, or 22.6 percent of total revenue.

Endowment distributions increased by 9.9 percent to $78 million in fiscal 2007 from $71 million last year. This growth was made possible by continued strength in the University's investment returns and its 14 percent increase in the annual endowment distribution rate. Endowment distributions have represented approximately 18 to 19 percent of the School's total revenue in each of the past five years.

After the fiscal 2007 distribution, the School's endowment and current use funds totaled $2.8 billion at year-end, up $481 million, or 20.5 percent, from June 30, 2006. The increase in the market value of the endowment for fiscal 2007 reflects $31 million in endowment gifts received by HBS during the year, as well as net appreciation in endowment principal of $450 million. Total investment return was +23 percent in fiscal 2007, net of all expenses and fees, compared with +16.7 percent last year.

Unrestricted current use gifts are the School's primary source of innovation funding. Encouraging this type of giving has been a key fundraising focus at HBS since the School's campaign concluded in fiscal 2006. Unrestricted current use gifts rose by 41.7 percent in fiscal 2007 to a new record of $17 million, from $11.7 million in fiscal 2006. This extraordinary growth was largely the result of an increase in the number of MBA classes making unrestricted gifts. Over the past five years, unrestricted current use giving to HBS has generated more than $53 million in revenue.

Total cash received from gifts grew to $56.4 million in fiscal 2007, from $55 million a year earlier. HBS received gifts from nearly 13,000 individual donors in fiscal 2007, including alumni of the MBA, Doctoral, and Executive Education programs. Nearly 30 percent of the School's MBA alumni gave to HBS in fiscal 2007—a participation rate equal to those seen during the campaign years.