Endowment is a fund that is set aside by a donor, or giver, for a specific purpose. The term endowment also has the same meaning as foundation, fund, or trust (see Foundation; Trust fund). The money for endowments may come from individuals, family estates, or business organizations. Most endowments are designed to run forever, or until the money in the fund has been spent. Many endowments are nonprofit, tax-exempt organizations that finance numerous social welfare projects.
Endowments also refer to funds that are held by colleges, universities, hospitals, orphanages, and other institutions. The money is usually invested so that the institution has a continual income of some kind. Usually, the institution spends only the income or profit from the investments. In this way, the endowment can continue forever. Generally, the income from the endowment is used only for the general operations of the institution, or for some particular purpose for which the endowment was created.
