What is Endowment?: An Endowment is a permanent fund that is restricted, the principal of which is reserved. The funds are invested and a determined percentage of the portfolio is used for the purposes restricted by the endowment. --In our case, tuition assistance and scholarship. Endowment s a way to create an everlasting legacy for donors and their heirs and to tenable our school to weather the challenges of fluctuations in enrollment or sharp increases of costs that may come our way.