The term “endowment” today denotes funds that are “accepted subject to a requirement that the principal be maintained intact and invested to create a source of income.” And endowment size has become one of the most prominent benchmarks for comparing colleges and universities, as shown by the steady stream of lists and rankings of endowments published in popular, professional, and academic media. When and how did this meaning and significance of endowment arise?

It is well known that colleges and universities have long held endowments, even extending back to the middle ages, if not to antiquity. In America, the oldest endowments — as well as the longest investment record — belong to Harvard College, which is the oldest corporation in the United States. One might therefore assume that endowment has always played a significant role in American higher education. Yet, its fundamental importance, the emphasis upon increasing it, and even its current meaning originated between 1890 and 1930 due to specific historical developments.

Read the full article that explores the history of higher education endowments by Bruce Kimball at History of Philanthropy.