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An endowment fund is a permanent fund with annual earnings being used to advance the charitable mission of the organization for which it was established.
Distribution of a certain percentage are paid out each year from the endowment, while the principal amount of the endowment stays intact. The distributions are used to fund projets or programs the charity designates. Generally, the distributions are set so that the fund principal will continue to increase through reinvestment. As the principal increases the annual income will increase for future use.
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