An endowment is a perpetual source of funding. Since a portion of the earnings are reinvested to make the fund grow faster than inflation, you know your endowment will always be there, steadily supplying the money needed to accomplish whatever goal you choose. It is, quite literally, a gift that keeps on giving. Endowments can fund just about anything that attracts your interest. Typically, donors use them to fund scholarships, faculty positions, lectureships, or other programs they believe will benefit the University.
Endowments can even pay for building maintenance or campus beautification.
But the real beauty of an endowment is that its income can be directed to any purpose that you and the University agree will accomplish your objectives. How large an endowment gift needs to be depends on what you want it to support. The more elaborate or expensive the program, the more principal is needed to generate the necessary income. Once an endowed position is fully funded and earning spendable income, the final step is to choose the recipients. Great care is taken to see that a donor's wishes are met.