An endowment, or endowed fund, is a fund that is created with a contribution to the University that is becomes permanently restricted. In general, the principal is protected and only the income from it may be spent for the purposes designated by the donor.

What is an endowment and how does it work?

HOW ENDOWMENTS WORK. Endowed funds differ from others in that the total amount of the gift is invested. Each year, only a portion of the income earned is spent while the remainder is added to the principal for growth. In this respect, an endowment is a perpetual gift.

What is the purpose of an endowment?

An endowment is a structure used by large non-profit organizations to raise donation capital. The purpose of an endowment is to earn investment income by investing the donated capital. Part of the investment income is used for operations and the rest is reinvested.