What is an Endowment?

An endowment is like a special piggy bank that keeps giving money forever.

Imagine you have a piggy bank, and every time someone adds coins to it, those coins stay inside, they don’t get used up. Instead, the money in the piggy bank can be taken out sometimes, but most of it stays there so it can keep growing. That’s how an endowment works: it's a big pile of money that people or organizations give to schools, museums, or charities, and it keeps giving them money year after year, like a never-ending gift.

Just like your piggy bank might earn interest at the bank, an endowment can grow over time. The people who manage it use some of the money to help with things like paying teachers or buying books, but they keep most of it so the endowment keeps growing, just like how you save up for a bigger toy.

An endowment is like having a friend who always gives you a little bit of money every year, no matter what. That way, schools and other organizations can keep doing great things without worrying about running out of money, it's like having a superpower!