Glossary / Endowment

What is Endowment?

A permanently restricted fund where the principal is invested and only the investment income is available for spending.

Why it matters for your nonprofit

Boards, auditors, and funders expect clarity on Endowment because it affects how you report resources, stay compliant, and explain your financial story.

How it shows up in daily work

You will see Endowment in board packets, grant reports, and donor conversations. The goal is to record activity once and report it consistently—without rebuilding spreadsheets every month.

Common mistakes

• Treating restricted resources like general cash because the chart of accounts is not set up for funds.
• Letting finance and development use different definitions for the same funds.
• Waiting until year-end to fix coding errors that should be caught monthly.

How Alignmint helps

Alignmint ties fund accounting, donor records, and reporting in one place so terms like Endowment show up correctly in your books—not only in a policy memo.