Financial endowment

==Types==
Most private endowments in the United States are governed by the [[Uniform Prudent Management of Institutional Funds Act]] which is based in part on the concept of [[donor intent]] that helps define what restrictions are imposed on the principal and earnings of the fund. Endowments in the United States are commonly categorized in one of three ways:<ref name="Kenton"/>

#True endowment (also called permanent endowment). This is the type that is subject to UPMIFA in most states. The donor has stated that the gift is to be held permanently as an endowment, either for general purposes or for specific (or restricted) purposes.<ref name=newman>Newman, Diana, "Endowment Building", John Wiley and Sons, Inc. 2005</ref>
#Quasi endowment funds are designated endowments by an organization's governing body rather than by the donor. Therefore, both the principal and the income may be accessed at the organization's discretion. Quasi endowment funds are still subject to any other donor restrictions or intent.<ref>{{cite journal | title =Not-for-Profit Organizations |journal = AICPA Audit and Accounting Guide | page = 367 | publisher = [[American Institute of Certified Public Accountants]] | date =May 1, 2007 }}</ref>
#Term endowment is created with a gift or funds set aside by the board which can be spent in their entirety upon a set date or occurrence, such as the death of the donor.<ref name=newman />

All endowments ensure that the original principal, inflation-adjusted, is held in perpetuity and prudent spending methods should be applied in order to avoid the erosion of corpus over reasonable time frames. Restricted endowments may also facilitate additional donor requirements.

An expendable endowment fund is one which can be spent in certain circumstances.<ref>[[Office of the Scottish Charity Regulator]], [https://www.oscr.org.uk/guidance-and-forms/a-guide-to-charity-accounts-part-1-the-overview/accounting-glossary/ Accounting Glossary], published  18 April 2019, accessed 15 November 2023</ref>