Endowment

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Etymology

Middle English, from Anglo-French endower, from en- + dower, douer to endow, from Latin dotare, from dot-, dos gift, dowry

Definitions

  • 1 : to furnish with an income; especially : to make a grant of money providing for the continuing support or maintenance of <endow a hospital>
  • 2 : to furnish with a dower
  • 3 : to provide with something freely or naturally <endowed with a good sense of humor>

Description

A financial endowment is a transfer of money or property donated to an institution. The total value of an institution's investments is often referred to as the institution's endowment and is typically organized as a public charity, private foundation or trust.

Among the institutions that commonly manage an endowment are: academic institutions (e.g., colleges, universities, private schools), cultural institutions (e.g., museums, libraries, theaters, hospitals) and religious establishments.

An endowment may come with stipulations regarding its usage. In some circumstances an endowment may be required to be spent in a certain way or alternatively invested, with the principal to remain intact in perpetuity or for a defined time period. This allows for the donation to have an impact over a longer period of time than if it were spent all at once.[1]