An endowment is a permanent fund. The gifts (also called the principal) are invested to last forever. Only the earnings are spent for charitable grants or distributions. The earnings from agency endowments are distributed back to the nonprofit.
Just as Albert Einstein once called compound interest “the most powerful force in the universe,” endowments carry an inherent power to provide for community needs through continued growth. Over time, the distributions exceed the original gift, while the fund balance continues to grow.