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Endowment
Term category: General Investing
In 10 words or less:  A set of funds that provide income to an organization.

Definition: An endowment is a collection of funds that produce income for an organization.  A large source of income for universities come from their endowments.

Advice: Endowments are usually set up as funds of funds and invest in long-term assets.  They typically strive to earn at least a 5% annual return, which allows them to partially finance their university activities from their investment proceeds.

 

 

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