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Columbia University plans to rely more heavily on its endowment to finance operations next year, following sweeping research funding cuts imposed by President Donald Trump.

In its annual financial statement released late on Thursday, the New York Ivy League school said it had taken the rare step of drawing directly from its endowment to create a “research stabilisation fund” to offset $400mn in funding cuts by the White House. The fund has issued more than 500 internal research grants.

The university also said its trustees approved a limited-term increase in its use of endowment returns to fund operations for fiscal year 2026 as part of its “financial stabilisation efforts”.

Columbia’s struggle to maintain its financial health highlights the growing pressure on US universities resulting from the Trump administration’s use of funding cuts as leverage for greater federal control of higher education.

Columbia is among the US universities hit hardest by federal research-funding cuts since the president returned to office, after the administration made the school — home to one of the country’s largest student protests over Israel’s war in Gaza — a target of greater political scrutiny.

Columbia’s operating surplus fell to $113mn this year from $305mn in 2024 — a result Anne Sullivan, the university’s executive vice-president for finance, described as “modest” and “below our historical average” after the government suspended hundreds of research grants earlier this year.

Sullivan said the university experienced a “major destabilising event” after the government terminated more than 350 grants, worth over $1.3bn, in March. The situation has eased since July, when the Trump administration reinstated 260 research grants to Columbia after the university agreed to a $221mn settlement resolving federal investigations into its handling of antisemitism on campus.

While Columbia’s financial statement reported a mere 1 per cent decline in government grants and contracts this year from 2024, Sullivan said the figure “does not adequately capture the level of strain experienced by the research enterprise” in the third and fourth quarters.

She said: “Because tapping endowment for one-time purposes erodes our future capacity to provide support for programmes dependent on the annual distribution, utilising endowment assets in this way, beyond our annual distribution, is a rare and multi-faceted decision which we do not make lightly.”

Columbia’s finances have also benefited from a 12.4 per cent gain on its endowment in the year to June — the highest annual return in seven years. Kim Lew, chief executive of Columbia Investment Management Company, said the result was driven by gains in stocks and an improvement in private investment returns.