How Colleges and Universities Earn Their Revenue

by Hank Coleman

You would think that most colleges make their money from the tuition, room and board, and other fees that they charge their students.  But, in reality, most colleges earn revenue from a variety of sources.  When I was an undergrad, I was the editor of my college’s student newspaper.  We were funded by a grant from our college’s endowment which paid out a percentage of its earnings to the college every year.  My school depended on the proceeds from the endowment for a large portion of its operating costs.  So, when the country faced a bear market, everyone across campus had to pinch their pennies while budgets were slashed.

Here is an interesting breakdown of how Harvard University earns its annual revenue:

  • Tuition & Room and Board Fees
= $660 million
  • Earnings from the College’s $35 billion endowment
= $7.9 billion 
  • Donations
= $615 million
  • The Harvard Brand (4% of every t-shirt, mug, bumper sticker goes back to the school)
= $40 million
  • Patents the College holds
= $20 million
  • Revenue from the College’s book publishing business
= $90 million
  • Football ticket revenue (despite sports program’s total cost of $16 million)
= $1 million
GRAND TOTAL = $9.33 billion

Source: Conde Nast Portfolio magazine.

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