An endowment is a large amount of money from which the school draws financial health. We say it’s sort of like a school’s “savings account”, as you can see below.
The basics of a school’s endowment.
However, an endowment is not exactly like a savings account. For one, as humans, we like to spend our savings now and then, where as the endowment model is based on more or less infinite growth. As more and more donations and investment returns build the endowment, the returns from its investments continue to grow, supplying the school with more and more operating funds.