As one of the world's most prestigious universities, Harvard University is not only a hub for academic excellence but also a significant economic entity. With an endowment worth over $40 billion, Harvard's financial dealings are subject to intense scrutiny. One way to gain insights into the university's financial activities is by examining its tax filings, specifically Form 990. In this article, we will delve into the world of tax filings, explore the significance of Form 990, and provide an in-depth analysis of Harvard's tax filings.
What is Form 990?
Form 990 is an annual information return required by the Internal Revenue Service (IRS) for most tax-exempt organizations, including charities, foundations, and educational institutions like Harvard University. The form provides a detailed snapshot of an organization's financial activities, governance, and compliance with tax laws. By filing Form 990, organizations demonstrate their commitment to transparency and accountability, allowing the public to access information about their financial dealings.
Why is Form 990 important?
The importance of Form 990 cannot be overstated. This form serves several purposes:
- Transparency: Form 990 provides a window into an organization's financial activities, allowing the public to assess its financial health, governance, and compliance with tax laws.
- Accountability: By disclosing financial information, organizations demonstrate their commitment to transparency and accountability, which can help build trust with stakeholders.
- Compliance: Form 990 helps the IRS ensure that tax-exempt organizations comply with tax laws and regulations.
Harvard's Tax Filings: An Overview
Harvard University's tax filings offer a fascinating glimpse into the university's financial activities. As a tax-exempt organization, Harvard is required to file Form 990 annually. The university's most recent tax filing, which covers the fiscal year 2020, provides insights into its financial performance, governance, and compliance with tax laws.
Financial Performance
Harvard's financial performance is a key aspect of its tax filings. The university's Form 990 reveals:
- Revenue: Harvard's revenue for fiscal year 2020 totaled over $5.3 billion, with the majority coming from investments ($2.3 billion) and tuition and fees ($1.2 billion).
- Expenses: The university's expenses for fiscal year 2020 totaled over $4.8 billion, with the majority going towards salaries and wages ($1.4 billion) and academic programs ($1.2 billion).
- Net assets: Harvard's net assets as of June 30, 2020, totaled over $40.8 billion, with the majority represented by investments ($31.4 billion).
Governance
Harvard's governance structure is also disclosed in its tax filings. The university's Form 990 reveals:
- Board of Overseers: Harvard's Board of Overseers is composed of 30 members, including prominent business leaders, academics, and philanthropists.
- Executive compensation: The university's president, Lawrence S. Bacow, received a total compensation package of over $1.1 million in fiscal year 2020.
Compliance
Harvard's tax filings also demonstrate its compliance with tax laws and regulations. The university's Form 990 reveals:
- Tax-exempt status: Harvard is exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code.
- Unrelated business income: The university reported unrelated business income of over $14.5 million in fiscal year 2020, primarily from its commercial real estate holdings.
Analysis and Insights
Harvard's tax filings offer several insights into the university's financial activities and governance. Some key takeaways include:
- Diversified revenue streams: Harvard's revenue streams are diversified, with a significant portion coming from investments and tuition and fees.
- Strong financial performance: The university's financial performance is strong, with a significant surplus in fiscal year 2020.
- Governance structure: Harvard's governance structure is transparent, with a clear disclosure of its Board of Overseers and executive compensation.
Conclusion
In conclusion, Harvard's tax filings offer a unique glimpse into the university's financial activities and governance. By examining Form 990, we gain insights into the university's financial performance, governance, and compliance with tax laws. As a tax-exempt organization, Harvard's commitment to transparency and accountability is evident in its tax filings, which provides stakeholders with valuable information about its financial dealings.
What's Next?
We invite you to share your thoughts and comments on Harvard's tax filings. How do you think the university can improve its financial transparency and accountability? What insights do you gain from examining Form 990? Share your thoughts in the comments below!
FAQs
What is Form 990?
+Form 990 is an annual information return required by the IRS for most tax-exempt organizations, including charities, foundations, and educational institutions.
Why is Form 990 important?
+Form 990 provides transparency, accountability, and compliance with tax laws, allowing the public to access information about an organization's financial dealings.
What information does Harvard's Form 990 disclose?
+Harvard's Form 990 discloses information about its financial performance, governance, and compliance with tax laws, including revenue, expenses, net assets, and executive compensation.