A. Overview  
   January 1989

Development Policy and Administration Manual 
Chapter VI. Endowment Funds
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                                 OVERVIEW


An endowment fund is a fund whose donor has stipulated that the
fund principal must remain inviolate and that only income may be
expended.  By contrast, a fund functioning as an endowment is a
fund, the principal of which has been set aside by administrative
action to be invested in the manner of an endowment fund (see
Section III: E.2, Allocating and Reallocating Gifts and
Bequests).  Principal is held inviolate, but, because there are
no legal restrictions regarding expenditure of principal, the
decision to hold the principal inviolate may be reversed by
appropriate administrative action.  

The information contained in Chapter VI pertains both to true
endowments and to funds functioning as endowments, though for the
sake of convenience, they may be referred to collectively as
endowments.  The information contained in Sections B and C
pertains to all endowed funds.  Section D provides specific
information about endowed chairs.