What is an “underwater” endowment?
Such endowment is in an endowment that, through declining market performance, has used all accumulated earnings and appreciation and is now eating into or eroding the original gift value, or corpus. We also refer to “underwater” endowments as endowments with eroded corpus. Donors may elect to contribute to the endowment’s income (spending) account for current use until the corpus value returns to its designated endowment level.
