Harvard University's endowment, valued at $25.9 billion at the end of FY 2005, is a collection of more than 10,800 separate funds established over the years to provide scholarships; to maintain libraries, museums, and other collections; to support teaching and research activities; and to provide ongoing support for a wide variety of other activities. The great majority of these funds carry some type of restriction.

In 1649, the first gift of real estate from alumni was completed by deed or bequest from members of the Class of 1642 (John Bulkeley and George Downing, the College's first teaching fellows) and the Class of 1646 (Samuel Winthrop, John Alcock). Once a cowyard, this small parcel was dubbed the "Fellows' Orchard" after the alumni planted it with apple trees. Widener Library now occupies part of the site. In 1669, 10 merchants of Portsmouth, N.H., guaranteed the College £60 a year for seven years. They kept their promise, paying in lumber products that the College Treasurer sold.

Although their specific use varies greatly, all of Harvard's endowment funds have a common objective: to support activities not just for one year, or even one generation, but for perpetuity. By their very nature, endowment funds require the balancing of current and future needs.

Like other endowed institutions, Harvard has long followed investment and distribution policies designed to avoid the erosion of purchasing power by maintaining the value of existing endowment in real terms (after inflation) and by providing a steady, sustainable, and predictable flow of funds to support current operations. In addition, these policies recognize the need to regularly add to the endowment in order to cover the growth of University expenses in excess of normal inflation.

The Harvard Management Company, a subsidiary of the University, is responsible for managing the endowment assets. All in all, the endowment has helped to provide the stability necessary for Harvard to remain a premier educational and cultural institution.

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