Trustees, however, stress that such suggestions conflict with the purpose of an endowment. An aggregate of assets that grows primarily through a combination of gifts from alumni and other donors and from returns on investments, the endowment is a way to ensure an institution's viability into perpetuity. Plow most of your investment returns back into the endowment. And keep your spending focused on your educational mission, no matter how worthy a charitable cause might be. That's probably still the best philosophy for most of those insti tu tions lucky even to have an endowment at all.
Most college endowments are fairly young.
The idea, centuries old, took root in U.S. higher education during the 1960s and inflationary 1970s, when many colleges and universities were struggling financially. But even in today's uncertain economy, some economists wonder whether spending rules ought to be rewritten when higher-education endowments reach a certain size. The last few years have been prosperous for higher education endowments. But for an elite set of schools, the returns have been spectacular. President Bush's 2002 budget proposal for higher education.