Endowment is a fancy word that makes the giver feel like they have given something and made something better.
Non-profit endowment managers invest their funds in the stock and bond market and hope for it to grow. However, they don't worry too much about this because nobody really checks on them or at least most of them.
Some of the big schools have billions of dollars in endowments = they have a billions of dollars in the bank or invested and making money for them.
Non-profits like to have big endowments (I'd like to have a lot of money in the bank, too) because it ensures that their institution will continue. After all in a worst case scenario the interest earned from the endowment can be used to pay the bills.
When a university has security from this endowment, people want to give it more because they are confident their money will not disappear.
Smaller schools or schools without a huge endowment to lean on, in other words, schools that live from year to year on gifts find themselves being influenced by the giver sometimes. Donors who have consistently given in the past also feel they have a stake in the school.
But, it stops there. They can promise not to give anymore, but their gifts has been given and there is no taking it back.
What do you think about that?
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