Endowments

The term endowment refers to permanent funds that are invested to produce annual income for colleges or universities and various cultural institutions. These funds enhance the autonomy, stability, and competitive advantage of such institutions over the long term. As a result, endowment size has become one of the most prominent benchmarks for ranking colleges and universities, [Page 446]as shown by the steady stream of lists of endowments published in popular, professional, and academic media.

This entry describes how the current meaning and significance of endowment in higher education emerged at the end of the 19th century and became widespread during the 20th century. Concurrently, certain universities significantly increased their financial capital by building endowment and thereby established an upper tier of endowed universities whose elite status ...