endowment

An endowment is money or property donated to an institution for a specific purpose. It typically refers to the total of a nonprofit institution’s investable assets, often in the form of cash, stocks, bonds, or similar instruments. These assets are also known as its principal or corpus. This principal is not spent directly. Instead, it is invested, and a portion of the income earned is used to support the institution, while the rest may be reinvested to grow the endowment over time.

Endowments are commonly associated with large institutions such as universities and hospitals but may also support the long-term financial planning of any charitable nonprofit.

[Last reviewed in July of 2025 by the Wex Definitions Team] 

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