Endowment Fund

 

ST Reference: Endowment Fund

TL:DR, a Doctor in her will gave $2m to a charity to set up an endowment fund. ST explains that:

An endowment fund is a pool of donations that organisations, such as universities and charities, invest for long-term financial support. The initial sum is preserved, and only the returns are used by the organisation.

I am posting this here for my reference so I don't lose this link as the idea of an endowment fund where the principal is forever preserved and you spend only the returns is obviously attractive to me and matches my own investment/retirement strategy of only living off my passive income.

What I found interesting was that this couple was obviously passionate about charity and had very little spending needs. Why did she wait till death to start giving away her $20m fortune? One hint can be found in this part:

The couple, who had no children, owned properties in Singapore and overseas. Despite their significant assets, Mr Chia said his wife lived frugally so their money could be used to help others.

They saved and invested their sizeable incomes in illiquid properties. So they probably had modest liquid assets suitable to their frugal lifestyles but a lot of property wealth. It may be a stereotype but the elderly seem to find it really difficult to 'sell property' (whether to downsize to a smaller more appropriate home or otherwise). So have to wait until they pass away before the property is sold.