Can an Endowment Be Spent

An endowment is a gift to charity which, under the terms of the gift, may not be spent in its entirety. Typical endowment terms permit the expenditure of income but not principal, or limit on the percentage or amount of the fund that can be spent in any year.

Can you withdraw money from an endowment?

The withdrawal policy can be based on the needs of the organization and the amount of money in the fund. However, most endowments have an annual withdrawal limit. For example, an endowment might limit the withdrawals to 5% of the total amount in the fund.

Can endowment principal be spent?

A board-designated endowment is classified as unrestricted net assets, and its principal may be spent under FASB guidelines.