Financial Statements Released for Fiscal 2026
Dear Colleagues,
I am writing to share that we have posted the University’s audited financial statements for the fiscal year ended June 30, 2026, and our updated Financial Overview on the University’s website.
Summary of Results
The University is reporting strong net asset growth in fiscal 2026, driven by excellent endowment returns and a positive operating surplus. Kim Lew, head of Columbia’s Investment Management Company (IMC), has announced a return on IMC-managed assets of 18.3% for the year and 9.9% over the trailing 10-year period. Our endowment value now stands at $17.9 billion, reflecting the continued generosity of our donors and the hard work of our endowment team to achieve strong returns within a reasonable risk framework. Growth in the endowment from investment returns and gifts provides Columbia with a perpetual source of dedicated funding for University activities, including student financial aid, faculty support, and research.
Overall, the University’s balance sheet remains strong and stable, with growth in our asset base, leverage at manageable levels, and a solid liquidity position.
The University’s operating performance in 2026 reflects an operating surplus in line with our historical average, and a significant improvement from fiscal 2025. This surplus reflects the difference between operating revenue and expense in the period for our unrestricted activity as well as activity restricted by donor intent, and is the aggregation of activity across all of our schools and units. Importantly, our operating surplus is a critical source of funding for capital improvements at the University. For new readers of our financial statements, our capital expenditures are not an operating expense, but rather individual units may utilize operating funds, as well as support from donors, to continue to refresh and enliven our campuses.
Our operating results in 2026 reflect our disciplined and consistent approach to implementing cost controls across the University in response to the revenue uncertainty we faced at the beginning of the fiscal year. Revenue growth in fiscal 2026 was 2.6% in the aggregate, well below historical average. Even with increases in operating gifts, tuition revenue net of increased financial aid, and patient care revenue, aggregate revenue growth was muted by a significant decrease in government grant revenue. One key factor was the disruption to government grants in the fourth quarter of the prior fiscal year, the effects of which carried into fiscal 2026. The first half of fiscal 2026 saw the revenue impact of programs that have been scaled back as federal funding priorities shifted, and a steady but slow ramp up and return to regular activity for the vast majority of federal grants, which were reinstated after initial termination.
In fiscal 2026, the University implemented several important measures to stabilize our research environment, including authorizing a modest increase in endowment payout to provide time-limited relief to our schools that were experiencing significant impacts. In addition, the University provided two internal rounds of financial stabilization awards, through our Research Stabilization Fund, to help our principal investigators complete key milestones, pivot their research, and progress in new areas of inquiry. The response of the scientific community at Columbia was tremendous, in resolve, creativity, and focus. Our new federal grant award volume has been strong in many schools and institutes at Columbia, which should impact activity in fiscal 2027 and beyond, and we continue to diversify revenue sources to support our research as the landscape for federal funding continues to evolve.
The expense controls instituted across the University resulted in expenses increasing just 0.4% in fiscal 2026 relative to fiscal 2025. As previously noted, this reflected cost controls in response to uncertainty in our sources of support, and a need to bring our expenses into alignment with available resources. The prior four-year period, in which we emerged from the substantial impacts of COVID against an inflationary economic landscape, had seen a compound annual growth rate of just over 7% in expense growth. Including our results from fiscal 2026, our five-year compound annual growth in expense is 5.7%.
In fiscal 2026, decreases in grant supported expenses were the major factor in reducing our functional expense in categories of “Research” as well as “Instruction and Educational Administration.” Schools and central units that were not directly grant dependent also constrained hiring and salary increases, and the University implemented a Voluntary Retirement Program which was an attractive option for many of our long-serving administrators and faculty. In aggregate, the expense base outside of that which is supported by grants grew at approximately 3.5%, including increases in expenses for our patient care enterprise to support volume growth and an improved patient experience. Importantly, the management of expenses relative to revenue enables the University to generate a critical level of operating funds, which we use to support capital investment in our physical infrastructure and in new program development.
Our capital expenditures in fiscal 2025 and fiscal 2026 were approximately $325 million, which was modest in historical context, and we were able to complete key projects such as the Roy and Diana Vagelos Innovation Laboratories, the Li Lu Library at Columbia Law School, and move forward numerous campus upgrades that improved our shared academic and student living spaces. In fiscal 2027, we have budgeted for a significant increase in capital investment, a substantial portion of which is continuing work to renovate undergraduate housing and strengthen the undergraduate experience. We announced the completion of 99 Claremont, a new School of General Studies residence hall and expect to complete a multi-year renovation of Hartley Hall by the beginning of next academic year.
Conclusion
Behind these strong financial results lies an extraordinary amount of hard work and thoughtful decision-making by our schools and departments across the University. I want to express gratitude for the seriousness of purpose with which every level of the University approaches financial stewardship and management of our resources. This was so clearly evidenced in fiscal 2026, in which difficult choices to implement cost controls and careful re-allocation to critical needs were required to steer the course.
While our approach to cost containment in fiscal 2026 allowed us to reset, we have considerable work ahead to evaluate and adjust our cost structure in meaningful ways that will allow us to respond to revenue constraints. We will continue to face headwinds on multiple fronts, including ongoing shifts in federal research funding priorities, and an evolving regulatory environment affecting our international scholars and students. I am confident in our ability to meet these challenges with creativity and a shared sense of purpose in our mission. Together, we will continue to make thoughtful financial decisions that serve our students and our patients, strengthen our institution, and advance our mission of excellence in teaching, research, and patient care.
Sincerely,
Anne Sullivan
Executive Vice President for Finance
For additional financial information, please see our Financial Overview page.