What is an Endowment?
An endowment is any asset donated to and for the perpetual benefit of a non-profit institution. The donation is usually made with the requirement that the principal remain intact and money earned from investing the principal be used for a specific purpose.
How Endowments Work
In the broadest sense, an endowment is a donation that is given to a non-profit institution on the condition that it is used for the benefit of that organization. Most endowments are designed to provide a permanent source of income by keeping the original amount invested and using the accrued income from dividends for its charitable purpose.
An example of an endowment is a sizable donation to a university on the condition that it is invested and that the proceeds from the investment are used for an annual undergraduate scholarship.
Why Endowments Matter
Endowments are given to non-profit organizations with the intention that they be used to advance the mission of the organization for the long term. Endowments of large institutions, such as major private universities, sometimes become significant players in the financial world due to the significant amount of money that the endowment is investing.
Personalized Financial Plans for an Uncertain Market
In today’s uncertain market, investors are looking for answers to help them grow and protect their savings. So we partnered with Vanguard Advisers -- one of the most trusted names in finance -- to offer you a financial plan built to withstand a variety of market and economic conditions. A Vanguard advisor will craft your customized plan and then manage your savings, giving you more confidence to help you meet your goals. Click here to get started.
Read This Next
Heads up: When you and your spouse fight about where to buy your next house, you're not really fighting about where to buy your next house. You're fighting about the ...
Read More →
It seems like a simple question: What is the P/E ratio of the S&P 500? Unfortunately, the answer...
Read More →
My clients didn't believe me when I said they could make an extra $10,000 a year, right away. "Kate, we don't want to work harder. We're close to...
Read More →
With a little patience, planning, and access to a computer or smartphone you can easily save money on gas starting tomorrow. Below are seven no-brainer tips for how to save money on gas. ...
Read More →
When you look at your list of daily tasks and appointments, what jumps out? The presentation that you have to prepare? That hot stock you want to buy? The trip that you...
Read More →
