What are endowments?
Endowments are permanent funds established to ensure the support of philanthropic intentions in perpetuity. In essence, endowments are gifts that keep growing and giving. Assets are invested in a way that allows them to grow, and only a portion of the income from the fund is made available for grants each year. This is based on a “spending rule” calculation that distributes 4.5% of an average market value over a twelve quarter period. Based on historic stock and bond market performance, this should allow the endowment fund to distribute grants in inflation-adjusted amounts in perpetuity.
