A financial endowment is a donation of
property to a
nonprofit organization for the ongoing support of that organization. Usually the endowment is structured so that the
principal amount is kept intact while the investment income is available for use, or part of the principal is released each year, which allows for their
donation to have an impact over a longer period than if it were spent all at once. An endowment may come with stipulations regarding its usage.
The total value of an institution's
investments is often referred to as the institution's endowment and is typically organized as a
private foundation, or
trust. Among the institutions that commonly manage endowments are academic institutions (e.g.,
private schools), cultural institutions (e.g., museums, libraries, and theaters), service organizations (e.g., hospitals, retirement homes, the
Red Cross, the
SPCA), and religious organizations (e.g., churches, synagogues, mosques).