endowment
en-DOW-muhnt
/ɪnˈdaʊ.mənt/
An invested aggregate of money or property donated to an institution to generate perpetual operational income.
Refers specifically to principal funds that remain invested forever; only the interest or yield is spent.
The story behind the word. From Anglo-French 'endouer' and Latin 'dotare', meaning to bestow a dowry upon someone. Just as a marriage dowry provided a permanent asset base for a new family, an institutional endowment provides a permanent asset base for a university.
Word relationships
- bequest fund: A bequest fund comes specifically from a individual's will, whereas an endowment can be formed by multiple living donors or corporate entities.
- deficit: A deficit represents a financial shortfall, while an endowment represents asset accumulation generating income.
Commonly confused with
- donation: A standard donation is usually spent directly, whereas an endowment's principal is kept intact to generate investment returns.
Word family
- endow (verb): To provide a permanent source of income or property to an institution or person.
- endowed (adjective): Provided with a permanent fund or natural quality.
Collocations
- university endowment
- endowment fund
- endowment yield
- build an endowment
Example sentences
- "The university's multi-billion-dollar endowment provides funding for faculty chairs and student aid." University Finance
- "A generous bequest established a perpetual endowment for the university library's rare manuscript collection." Philanthropy
Memory hook
DOWERS AND DONORS build the ENDOWMENT for future generations. Endowments are invested to endow forever.
When not to use
Do not use 'endowment' to describe an operational cash account meant to be completely spent down in one year.
Fun facts
- Harvard University boasts the world's largest academic endowment, valued at over $50 billion as of recent financial reporting.
Related words
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