An endowment is a large sum of money donated to an organization, like a university, museum, or charity, where the money is invested and usually only the profits are spent each year. The original gift is meant to stay intact, continuing to generate income for a very long time.

Imagine someone donates ten million dollars to a college. Instead of spending it all at once, the college invests the money. If the investments earn 5% annually, that's $500,000 the college can use each year for scholarships, research, or new buildings, while the original ten million remains untouched, ready to generate another $500,000 next year, and the year after that.

Many prestigious universities have enormous endowments built up over decades or centuries from thousands of donors. Harvard University's endowment exceeds fifty billion dollars. These endowments help institutions weather difficult times and fund long-term projects without worrying about next year's budget.

The word can also describe the money itself or the fund where it's kept: “The scholarship comes from the Henderson Family Endowment.” Endowments represent a form of long-lasting generosity, where a single gift keeps giving long after the donor is gone. They're one reason universities founded hundreds of years ago still thrive today, supported by gifts from people who believed in investing in the future.