This is Patrick Munro financial advisor discussing
what is an endowment. An endowment is an old English term which really means presenting
a group of money for a useful cause. The money was the result of savings over a long period
of time. The largest users of endowments right now are the universities. What they do is
they retain financial advisers to draw in monies and invest these monies for the purpose
and benefit of expanding the school, if you will, and building buildings and faculty as
well. The biggest endowment is Harvard University which is in fact in the billions of dollars
because of the long history of that educational institution. Also endowments can occur in
insurance contracts. The individuals can have private family endowments as well, based on
putting money away, starting way back when. And these endowments are normally for wealthy
people that want to transfer wealth over multiple generations, and they use a family endowment
to do so. They’re very complex instruments, they have to be taxed and managed as well,
and to make sure that all taxes are paid as well to the government. This is Patrick Munro
discussing the financial term known as endowments.