Endowment is a type of fund created to support charitable activities, institutions, schools, and other entities. Endowments are designed to keep the principal amount intact over time, while using the investment income from the principal to support the goal of the endowment. Endowments are designed to benefit from investment gains over time, such as the appreciation of stocks or the compounding power of interest earnings.

For most endowments, the principal is donated by individuals or organizations with a desire to make a long-term support. Such donations may take the form of cash, stocks, bonds, real estate, or other investments. Most endowments are structured as a trust, which provides the endowment with an additional layer of legal protection and helps ensure the endowment money is used only according to its intended purpose.

Endowments are often established through a trust fund to serve a charitable, educational, or religious purpose. Endowed funds are typically invested, with a portion of the income used to achieve the endowment’s mission while the remaining income, and sometimes the principal, is reinvested. Depending on the mission of a particular endowment, the income may be used to support research, education, religious activities, cultural institutions, or other charitable causes.

Some endowments are organized as public charities, which provide the endowment with greater accountability and oversight by both governing and non-governing boards. Endowments can also be organized as private foundations, which are usually funded by a single family or individual and are devoted to a particular cause, such as health or the arts.

In some cases, a donor may specify certain conditions for an endowment, such as the income from the endowment being used to hire specific employees or to provide certain services. The laws regarding endowments may vary from state to state, so it is important to understand and follow all applicable rules and regulations when establishing an endowment.

By providing ongoing financial and organizational support, endowments can help promote the growth and development of schools, churches, hospitals, and other charitable organizations. Endowments also have the potential to outlive the donors who established them and continue to benefit organizations for generations to come.

Endowments provide an excellent way to ensure that a donor’s legacy outlives them and serves to benefit an organization as long as it is in existence. Endowments are a great way to help ensure resources are available to advance a donor's vision and maximize their impact on their chosen organizations and causes.