Financial endowment

Legal structure for managing investments / From Wikipedia, the free encyclopedia

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A financial endowment is a legal structure for managing, and in many cases indefinitely perpetuating, a pool of financial, real estate, or other investments for a specific purpose according to the will of its founders and donors.[2] Endowments are often structured so that the inflation-adjusted principal or "corpus" value is kept intact, while a portion of the fund can be (and in some cases must be) spent each year, utilizing a prudent spending policy.

B%26M_Gates_Complex.jpg
The Bill and Melinda Gates Foundation headquarters complex in Seattle as seen from the Space Needle
Engraving of Harvard College by Paul Revere, 1767. Harvard University's endowment was valued at $53.2 billion as of 2021.[1]

Endowments are often governed and managed either as a nonprofit corporation, a charitable foundation, or a private foundation that, while serving a good cause, might not qualify as a public charity. In some jurisdictions, it is common for endowed funds to be established as a trust independent of the organizations and the causes the endowment is meant to serve. Institutions that commonly manage endowments include academic institutions (e.g., colleges, universities, and private schools); cultural institutions (e.g., museums, libraries, and theaters); service organizations (e.g., hospitals, retirement homes; the Red Cross); and religious organizations (e.g., churches, synagogues, mosques).

Private endowments are some of the wealthiest entities in the world, notably private higher education endowments. Harvard University's endowment (valued at $53.2 billion as of June 2021)[3] is the largest academic endowment in the world.[4][5] As of 31 December 2022, the Bill and Melinda Gates Foundation is the second wealthiest private foundations with an endowment of $67.3 billion.[6]

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