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An '''endowment''' is the total investments held by an institution which it is not at liberty to spend.  Non-profit or charitable institutions receive gifts.  In some years, an institution may receive more money than it spends.  In general, when an institution saves money, it is free to spend it later for any purpose consistent with the mission of that institution.  However, when a gift is given on the condition that the money cannot be spent (but any interest income earned by the gift can be spent), that is called an endowment.

An '''endowment''' is the total investments held by an institution which it is not at liberty to spend.  Non-profit or charitable institutions receive gifts.  In some years, an institution may receive more money than it spends.  In general, when an institution saves money, it is free to spend it later for any purpose consistent with the mission of that institution.  However, when a gift is given on the condition that the money cannot be spent (but any interest income earned by the gift can be spent), that is called an endowment.

The definition of "endowment" varies from charity to charity and from state to state.  For example, a donor may give money to a charity on the condition that the income from the investment of the gift are paid to his widow for as long as she lives and then what is left can be used by the charity.  In some states, that gift would be considered a part of the endowment as soon as it is received.  In other states, those funds would have to be invested separately until the widow dies.

The definition of "endowment" varies from charity to charity and from state to state.  For example, a donor may give money to a charity on the condition that the income from the investment of the gift is paid to his widow for as long as she lives and then what is left can be used by the charity.  In some states, that gift would be considered a part of the endowment as soon as it is received.  In other states, those funds would have to be invested separately until the widow dies.

Sometimes charities are criticized for setting aside too much money and not spending more each year.  For example the [[Wikimedia Foundation]] has been criticized for using persistent fundraising to receive much more money than it plans to spend.  Some colleges have been criticized for paying out only a portion of endowment income (to hedge against future inflation) rather than using more of the income for [[financial aid]] or for lowering [[tuition]].<ref>{{cite news|url=http://www.nytimes.com/2008/01/25/education/25endowments.html|work=New York Times|title= Senate Looking at Endowments as Tuition Rises|first=Karen|last=Arenson|date=January 25, 2008|accessdate=November 21, 2012}}</ref> In general, [[conservative]]s try to protect endowment so that it can meet the needs of future generations, while [[liberal]]s seek to maximize the present benefits of endowments.

Sometimes charities are criticized for setting aside too much money and not spending more each year.  For example the [[Wikimedia Foundation]] has been criticized for using persistent fundraising to receive much more money than it plans to spend.  Some colleges have been criticized for paying out only a portion of endowment income (to hedge against future inflation) rather than using more of the income for [[financial aid]] or for lowering [[tuition]].<ref>{{cite news|url=http://www.nytimes.com/2008/01/25/education/25endowments.html|work=New York Times|title= Senate Looking at Endowments as Tuition Rises|first=Karen|last=Arenson|date=January 25, 2008|accessdate=November 21, 2012}}</ref> In general, [[conservative]]s try to protect endowment so that it can meet the needs of future generations, while [[liberal]]s seek to maximize the present benefits of endowments.