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Total Executive Education revenue for the year was essentially flat with fiscal 2008, but the changed economic environment significantly affected the program mix. Postponements and cancellations in custom programs in the second half of the fiscal year led to a double-digit percentage decline in revenue. This was offset by open-enrollment program revenue, which was up 8 percent from fiscal 2008.
The School's longer program offerings—including the Advanced Management Program and the General Management Program—posted record applications and enrollment for the fall 2008 term. This early momentum offset modest decreases in enrollment in the spring 2009 term. For the full fiscal year, applications to the longer programs grew 12 percent from fiscal 2008, and enrollment increased by 6 percent. Executive Education launched seven new short, focused programs in fiscal 2009. Among them were two courses related to the economic crisis that were popular enough to warrant additional sessions.
Harvard Business Publishing faced profound challenges in fiscal 2009. Few sectors of the economy have been more thoroughly transformed by the forces of digitalization and globalization than the publishing industry. HBP has been reinventing its business over the past few years to stay in front of these changes and ahead of its competitors, recruiting new staff members with exceptional talent and, in fiscal 2009, restructuring the editorial group to better serve both the School and its outside markets. At the same time, HBP has been investing heavily in its IT infrastructure as more of its internal processes, content, and customers move online.
Although the School's publishing revenues have grown in recent years, these IT investments have limited the rise in HBP's operating margins. In fiscal 2009, the economic downturn prevented HBP from producing a sixth consecutive year of top-line growth. Sales were strong in the first half of the year, particularly in international markets, but weak in the second half. As a result, publishing revenue declined by $2 million, or 1 percent, from fiscal 2008, pressuring margins even further.
Alumni giving, a key revenue source for the School, was also affected by the recession. In particular, fiscal 2009 revenue from unrestricted current use gifts was down by $2 million, or 14 percent, from last year. Over the past five years, this source had grown substantially, totaling $71 million.
The decline in current use giving was more than offset by a larger distribution of income from the endowment, as revenue from this source grew by $19 million, or 20 percent, from fiscal 2008. Although the investment return on Harvard's pooled investments (including the endowment) was -27.3 percent for fiscal 2009, it was +8.6 percent for fiscal 2008. For the five years prior to fiscal 2008, the average annual return was +17.6 percent. The School's endowment distribution for fiscal 2009,which the University determined early in calendar year 2008, reflected this strong historic performance.