An endowment fund is a portfolio for a nonprofit, the money that is derived from doantions. The portfolio should become self sufficient and help support the charitable activites.
What is An Endowment?
A gift to nonprofit for certian purpose.
Who Contributes?
The people that contribute can range from old students to church vistors to anyone. There is no qualifications to donate money, most schools ask for donations after you graduate. Raising money can become difficult, so most endowment funds do not stop.
Who controlls the endowment fund?
A board of directors make decision by following the rules, regulations, and polcies. Most endowment funds have atleast three policies: usage policy, investment policy, withdrawal policy.
Three Main Policies
- A usage policy determines how the money will used.
- An investment policy will guide the endowment how to invest the money.
- Withdraw policy will guide the board of directos to know how much of a portfolio is allowed to be used each year.
Examples of Use Case for an Endowment Fund?
For colleges and universities, these can suport research, teaching and different kinds of programs. Many colleges and universities have large endowment funds. Schools sometimes use this for tution and fees to help students who cannot afford it normally, or people that have qualified for scholarships.
There are many schoosl that have some of the largest endowment funds: Harvard University, Yale University, Stanford University, and Princeton University. That is just a few of the schools with the largest accounts. Many private schools have some of the largest endowment funds in the United States.