These example sentences are selected automatically from various online news sources to reflect current usage of the word 'endowment.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.
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 It Works
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 It Matters
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.