What is An Endowment?

An endowment is basically a donation to an institution where the principal remains invested and intact and the income from the endowment is used. The most common endowments are given to private universities and can come with conditions such as enrollment of a family member in the school, funding a specific area of study, or scholarships and fellowships. Scholarships that are funded by endowments can be restricted by requiring they be earned by merit or by financial need.