Financial endowment

==Modern college and university endowments==
{{See also|Lists of institutions of higher education by endowment size}}

Academic institutions, such as colleges and universities, will frequently control an endowment fund that finances a portion of the operating or capital requirements of the institution. In addition to a general endowment fund, each university may also control a number of restricted endowments that are intended to fund specific areas within the institution. The most common examples are endowed professorships (also known as named chairs), and endowed [[scholarship]]s or fellowships.

The practice of endowing professorships began in the modern [[University|European university system]] in England on September 8, 1502, when [[Lady Margaret Beaufort]], Countess of Richmond and grandmother to the future king [[Henry VIII of England|Henry VIII]], created the first endowed chairs in divinity at the universities of Oxford ([[Lady Margaret Professor of Divinity (Oxford)|Lady Margaret Professor of Divinity]]) and Cambridge ([[Lady Margaret's Professor of Divinity]]).<ref name="Cambridge">[http://www.admin.cam.ac.uk/news/dp/2004110501 Lady Margaret's 500-year legacy] {{webarchive|url=https://web.archive.org/web/20070516043532/http://www.admin.cam.ac.uk/news/dp/2004110501 |date=2007-05-16 }} – University of Cambridge.</ref><ref>{{Cite book |last=Collinson |first=Patrick |title=Lady Margaret Beaufort and Her Professors of Divinity at Cambridge: 1502 to 1649 |last2=Rex |first2=Richard |last3=Stanton |first3=Graham |publisher=Cambridge University Press |year=2003 |isbn=9780521533102 |pages=21 |language=en}}</ref> Nearly 50 years later, Henry VIII established the [[Regius Professorships]] at both universities, this time in five subjects: divinity, civil law, Hebrew, Greek, and physic—the last of those corresponding to what is now known as medicine and basic sciences. Today, the [[University of Glasgow]] has fifteen Regius Professorships.

Private individuals also adopted the practice of endowing professorships. [[Isaac Newton]] held the [[Lucasian Professor of Mathematics|Lucasian Chair of Mathematics]] at Cambridge beginning in 1669, more recently held by the celebrated physicist [[Stephen Hawking]].<ref name="Bruen">{{cite web|last=Bruen|first=Robert|title=A Brief History of The Lucasian Professorship of Mathematics at Cambridge University|url=http://www.lucasianchair.org/|publisher=Robert Bruen|access-date=6 September 2012|date=May 1995|url-status=dead|archive-url=https://web.archive.org/web/20120824222550/http://www.lucasianchair.org/|archive-date=24 August 2012}}</ref>

In the United States, the endowment is often integral to the financial health of educational institutions. Alumni or friends of institutions sometimes contribute capital to the endowment. The use of endowment funding is strong in the United States and Canada but less commonly found outside of North America, with the exceptions of [[University of Cambridge|Cambridge]] and [[University of Oxford|Oxford]] universities. Endowment funds have also been created to support secondary and elementary school districts in several states in the United States.<ref>Kansas incorporated its first public school district endowment association in [[Paola, Kansas]], a small town of 5,000 people, in 1983. Today{{When|date=May 2019}}, it has approximately $2 million in endowed principal, which generates approximately $110,000 annually to distribute in scholarships to high school graduates and fund special projects in the district, which can not be afforded by the tax base. To promote the development of endowment associations across Kansas, USD 368 Endowment Association, which received a statewide award recognizing, has developed a "starter kit" to assist other Kansas school districts in the organization and establishment of new endowment associations.</ref>

===Endowed professorships===
An endowed [[professor]]ship (or '''endowed chair''') is a position permanently paid for with the revenue from an endowment fund specifically set up for that purpose. To set up an endowed chair generally costs between US$1 and $5 million at major research universities.<ref>{{Cite web |title= UCLA Endowment Minimums |url=https://www.uclafoundation.org/resources.aspx?content=endowment |access-date=2023-03-03 |website=UCLA Foundation |url-status=dead |archive-url= https://web.archive.org/web/20230326000448/https://www.uclafoundation.org/resources.aspx?content=endowment |archive-date= Mar 26, 2023 }}</ref> Typically, the position is designated to be in a certain department. The donor might be allowed to name the position. Endowed professorships aid the university by providing a faculty member who does not have to be paid entirely out of the operating budget, allowing the university to either reduce its student-to-faculty ratio, a statistic used for [[College and university rankings|college rankings]] and other institutional evaluations, or direct money that would otherwise have been spent on salaries toward other university needs. In addition, holding such a professorship is considered to be an honour in the academic world, and the university can use them to reward its best faculty or to recruit top professors from other institutions.<ref name="Cornell">{{Cite web |last=Miller |first=Paul |title=Teacher, Scholar, Mentor, Friend |url=http://celebrate.cornell.edu/learn/mentor4.html |url-status=dead |archive-url=https://web.archive.org/web/20050501174505/http://www.celebrate.cornell.edu/learn/mentor.html |archive-date=May 1, 2005 |website=Celebrate Cornell Faculty}}</ref>

===Endowed faculty fellowships===
An endowed faculty [[fellow]] is a position permanently paid for to recruit and retain new and/or junior (and above) professors who have already demonstrated superior teaching and research. The donor might be allowed to name the faculty fellowship. A faculty fellow appointment cultivates confidence and institutional loyalty, keeping the institution competitive over hiring and retention of talents.

=== Endowed scholarships and fellowships ===
An endowed [[scholarship]] is tuition (and possibly other costs) assistance that is permanently paid for by an organisation or individual with the revenue of an endowment fund specifically set up for that purpose. It can be either merit-based or need-based (the latter is only awarded to those students for whom the college expense would cause their family financial hardship) depending on university policy or donor preferences. Some universities will facilitate donors' meeting the students they are helping. The amount that must be donated to start an endowed scholarship can vary greatly.

Fellowships are similar, although they are most commonly associated with graduate students. In addition to helping with tuition, they may also include a stipend. Fellowships with a stipend may encourage students to work on a [[doctorate]]. Frequently, teaching or working on research is a mandatory part of a fellowship.