Understanding and Measuring Endowment in Public Charities

Thad D. Calabrese, Todd L. Ely

Research output: Contribution to journalArticlepeer-review


This note delineates different motivations for holding endowment by nonprofits, analyzes the definitions and measurement of endowment in the literature, and details newly available data on endowment contained in the Form 990 since 2008. More than 43% of organizations report owning an endowment, and the overwhelming majority of endowment funds are held by higher education nonprofits. One third of endowment funds are unrestricted and 41% are permanently restricted, with heterogeneity across subsectors. Endowed nonprofits exceed average payout rates each year of 5%. Annual endowment payouts average 4.1% of total organizational expenses, which measures the sector’s dependence on endowment revenue for operations. We evaluate past endowment measurement approaches using actual endowment data and find wide variation in validity. Although still imperfect, the new endowment data allow researchers to better understand a key distinguishing financial feature of the nonprofit sector.

Original languageEnglish (US)
Pages (from-to)859-873
Number of pages15
JournalNonprofit and Voluntary Sector Quarterly
Issue number4
StatePublished - Aug 1 2017


  • donor restrictions
  • endowment
  • nonprofit finance

ASJC Scopus subject areas

  • Social Sciences (miscellaneous)


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