What is the difference between an endowed fund and a non-endowed fund?
The primary difference between an endowed fund and a non-endowed fund is the permanency offered by endowed funds.
The community foundation invests the endowed capital, and only the interest generated is used to issue grants (per the donor’s instructions). Therefore, the capital is never touched, ensuring that the donor’s gift is a permanent source of funding for the community. It's a gift that keeps on giving.
An non-endowed fund uses the capital donated in its entirety, and does not generate interest over time. When all of the capital has been administered according to the donor’s wishes, the fund ceases to exist.