(The Conversation) – With the Trump administration seeking to cut federal funding for colleges and universities, you might be wondering whether the endowments of these institutions of higher education might be able to fill those gaps. Todd L. Ely, a professor of public administration at the University of Colorado Denver, explains what endowments are and the constraints placed on them.
What’s an endowment?
Endowments are pools of financial investments that belong to a nonprofit. These assets produce a revenue stream, typically from dividends, interest and realized capital gains. The funds endowments hold usually originate as charitable donations made to support an institution’s mission.
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