Endowment Education
How Endowment Funds Work
An endowment turns a one-time gift into permanent support. Here is the plain-language guide to what an endowment is, how it grows, and how the NAPPSA Endowment Fund gives back year after year.
What is an endowment?
An endowment is a permanent fund built from donations. Instead of spending each gift right away, the organization invests the money and spends only a small, carefully calculated portion of the investment returns each year. The original gift — called the principal or corpus — is kept intact and invested for the long term.
Because the principal is preserved and keeps earning, an endowment is designed to support its mission in perpetuity — effectively forever. One dollar given today can support NAPPSA this year, next year, and for generations, rather than being spent once and gone.
How an endowment works in three steps
You give
A donor makes a gift to the endowment — large or small, one time or recurring. Gifts can be undesignated or dedicated to a specific purpose the donor chooses.
We invest
The gift is pooled and invested for the long term in a diversified, balanced portfolio managed to grow the fund while protecting its value against risk and inflation.
We spend a little — forever
Each year a modest, sustainable portion of the returns is distributed to support programs, while the principal stays invested and keeps working for the future.
Endowment vs. a one-time donation
A regular donation
Is spent soon after it is received. It does important work once — and then the money is gone. Next year’s needs depend entirely on next year’s fundraising.
An endowment gift
Is invested and preserved. It funds the mission a little every year, indefinitely, and the principal keeps compounding — so its lifetime impact is many times the size of the original gift.
How the NAPPSA Endowment Fund works
The NAPPSA Endowment Fund applies these same principles through a disciplined framework called the Endowment Matrix, built on three pillars — a fundraising strategy, an investment strategy, and a spending strategy — all overseen by the NAPPSA Endowment Oversight Board.
The Board works with investment managers to manage the Fund as a balanced portfolio of equities and fixed income, sets a total-return-based spending rule that never erodes the Fund’s real value, and honors donor intent — every dedicated gift is used for the exact purpose the donor specified, and reported transparently each year. You can read the full framework on the NAPPSA Endowment Fund page.
Where the money comes from — and where it goes
Primary sources of inflows
NAPPSA B-2-B Rebate Earnings; the annual NAPPSA 5K Run/Walk; donations from NAPPSA members; and donations from NAPPSA Endowment Partners and Sponsors — plus new channels the Oversight Board continually develops.
What distributions support
Steady, dependable funding for NAPPSA programs and operations, scholarships and research, and any specific purposes designated by donors — consistent with the mission of NAPPSA.
Key endowment terms
Related pages
Turn a gift into a legacy
When you give to the NAPPSA Endowment Fund, your generosity keeps working long after it is given. That is the power of an endowment.
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