Annual Report 2009

From the Chief Financial Officer


In developing budgets this past year, we have made it consistently clear that the key engines of the School—our educational programs and faculty research—should be protected. HBS achieved a number of notable accomplishments in fiscal 2009, even as our energies and attention have been focused on managing through the downturn.

With the launch of a University-wide academic calendar and a January term in fiscal 2010, we increased the number of MBA immersion programs, where faculty-led groups of students take a deep dive into a particular region or topic. Immersions launched in fiscal 2009 included new sessions on entrepreneurship in Silicon Valley, venture capital in Israel, business opportunities in emerging markets in Mexico, and value-based healthcare delivery in Boston. Several new immersions are planned for fiscal 2010.

For the past few years, HBS faculty working groups have been focused on driving MBA curriculum change at the School in the areas of leadership, globalization, and critical and analytical thinking. Leveraging work on the future of MBA education undertaken during the School's centennial early in fiscal 2009, these groups were charged with developing ideas to strengthen our students' development along these dimensions. We expect these ideas to begin driving curricular innovation at HBS in the years ahead.

HBS has invested heavily over the past decade in fellowship support for students, increasing spending in this area at a compound annual rate of 14 percent and effectively reducing the real cost of attendance for students receiving aid. In fiscal 2009, fellowship spending increased nearly 27 percent from the prior year. Net student income—tuition and fees, minus the School's spending for fellowships—decreased by $5 million, or nearly 9 percent, from the prior year.

The School is planning continued—if more modest—fellowship growth in fiscal 2010 so that HBS can continue to attract outstanding students to its MBA and Doctoral programs, regardless of background or need. We expect this additional fellowship spending to reduce net tuition income even further, forcing even greater reliance on economically sensitive sources of revenue to fund the School's operations. New restricted current use gifts designated for fellowships offset this need.

On the research side, protecting key priorities has meant helping faculty accomplish more with fewer dollars. The School's total investment in faculty research was down roughly 5 percent from the prior year in fiscal 2009. In an environment of slower resource growth, the School's key goal is to continue fostering ambitious faculty research, but with more focus on controlling costs and fully realizing the efficiencies of shared resources such as the School's centralized research services.

More than 10 years ago HBS began launching a range of strategic initiatives, including global, healthcare, entrepreneurship, social enterprise, science-based business, leadership and, more recently, business and the environment. While their stage of development, scope, and other characteristics may be quite different, at their heart is a common group of faculty with shared research interests as well as students and often alumni with career interests or professional experience in the field.

These initiatives are becoming a means for increasing collaboration with other parts of Harvard, and a lens through which to address systemic societal challenges like education and the environment, and the School will continue to invest in them. Moreover, on the global front in particular, HBS is committed to deepening its engagement in China, and will be offering a range of programs—including Executive Education and MBA immersions—in Shanghai.

MBA Fellowship Spending
Total Fellowship Spending