Endowment:

An endowment fund is a special account that is established in order to generate revenue that will be
used for a specific purpose. Funds of this type are sometimes established to create a revenue stream to
fund research projects, provide scholarships to qualified applicants, or even to supply aid to individuals
who apply to the fund for financial help. An endowment fund is designed to function in perpetuity,
making it possible to provide financial support over the long-term.

One of the distinguishing characteristics of an endowment fund is that the principal amount contained
in the account is not disbursed for any reason. This principal amount is invested in a manner that creates
a steady return; it is this return that is actually used to supply personal and institutional support to any
entity that meets the provisions that govern the disbursement process established for the fund. Since
the amount of return can vary over time, the actual amount of the disbursements made from the fund
will reflect the amount of surplus funds that are currently available.

A common example of an endowment fund is associated with education. It is not unusual for individuals
as well as foundations to establish funds that help needy students pay for the cost of attending college,
technical schools, or other institutions that offer specialized training in a given field. The fund may
provide scholarships, or be set up to provide one-time grants to individuals who qualify for assistance.
Generally, the grants can be re-applied for each calendar year.

The endowment fund model is also a common means of providing financial support to research
organizations. For example, an organization that is conducting research on finding a cure for a specific
health issue may receive an endowment that can be used for operational costs, the purchase of
supplies, or any of the other expenses associated with supporting a research effort. As long as the
organization complies with the terms and conditions put in place by the endowment fund, it is possible
to continue receiving financial support, based on the return that the fund realizes from investment of
the principal within each financial period.

In many countries around the world, it is possible to establish an endowment fund for just about any
purpose. Religious organizations with memberships in multiple nations sometimes establish endowment
funds that allow needy members to attend distant gatherings such as conventions and conferences from
time to time. In the United States, many state-level public broadcasting networks are funded in part by
regular grants from endowment funds established by businesses and individuals. Endowed
professorships at a number of universities are funded at least in part by contributions from one or more
foundations by means of endowment funds.

Endowment Fund:
An endowment is a charitable donation in the form of real property, assets, or funds, usually given to an
institution to support a specific goal. Common endowment recipients are libraries, universities, and
hospitals. Generally, an endowment is quite large, and an institution often receives multiple
endowments which are pooled in a common fund. Typically, the principal of the endowment is invested,
and the interest is used to fund projects.

The practice of investing the principal, rather than spending it, allows an endowment to grow over time,
rather than diminishing by being spent all at once. For universities especially, this practice allows the
university to accrue large amounts of wealth which can be used to keep pace with other, competitive
universities. Usually, part of the interest is reinvested every year, allowing the principle to grow more
sizable. Most institutions leave the management of their endowments to private consulting firms which
specialize in handling large accounts, and they tend to invest funds in low risk environments, to prevent
losses.

Traditionally, endowment funds are used for major projects, such as constructing new buildings, funding
an endowed professorship or chair, or sponsoring a lecture series. Often, the donors who gifted the
endowment may placer restrictions on how it shall be used, stipulating, for example, that their
endowment funds must be used to build a new university library. Typically, donors to private institutions
are linked with the institution in some way; university alumni, for example, frequently donate sums to
their alma maters to improve them.

In addition to private institutions such as universities and colleges, endowments are also used to create
national funds, such as the National Endowment for the Arts and the National Endowment for the
Humanities. These endowment funds are maintained to support artists and innovators in reaching their
goals, and funds are typically disbursed in the form of grants. These types of endowments enrich society
as a whole, and will benefit anyone who is willing to write a grant to apply for funds. In some cases,
governments support national endowments to demonstrate a commitment to culture.

The form an endowment takes can vary. In some cases, an entire estate serves as an endowment, with
the decedent stipulating in his or her will that the estate, barring some private bequests, is to be given
to an institution. In other instances, a philanthropist will donate a large sum of money during his or her
life time to support a cause. Some philanthropists distribute endowments through private foundations
which have endowments of their own to finance their missions of supporting the arts, sciences, or other
goals which they feel strongly about.

Grants:
When people or businesses seek money to accomplish a specific purpose, like expanding a business,
starting one, or going to school, they often look for grants that they may qualify for based on some
aspect of their work or some individual characteristics. Unlike loans, which require repayment at some
future point, the grant is usually a gift of money to an individual or business to help them fulfill a certain
goal. Both governments and private individuals, businesses, or foundations offer grants, and getting one
can be significantly helpful.
The simplest government based grants are those individuals apply for funds in order to go to colleges or
continue their education. These may be need-based in part, and some are also based on scholarship, in
other words, good grades. They generally only require application, certification of income or grades, and
filing before the deadline. They usually don’t require long essays, extensive information or other forms
of grant writing, but they may be limited as to number. When students are looking for ways to fund
college, it’s a good idea to not only apply for federal grants, but also to look for any scholarships from
private sources.

Grants from the government may help charitable businesses expand their horizons or defray operating
costs. Sometimes grants are given to businesses to allow them to hire experts or merely take on an extra
and needed employee. Such a job is called a grant-funded position, and exists as long as funds are
available. Some grants are given yearly to the best applicants, and others are renewable provided an
individual or company maintains appropriate records and continues to qualify for the grant.

There are many private sources for grants, and it is truly surprising why some grants are given. A grant
may be given to forward the political aims or ideals of a certain company, to write a book, to build a
house. You can research grant-giving organizations online to see which grants might be applicable to
your aims. There are also businesses that specialize in listing grants, scholarships and loans available.
Certain books will list the many types and how to apply, and purchasing such a book might be a good
idea if you’re unfamiliar with Internet search techniques. Typically, you don’t need a book if you can
search online, because there are many free websites that list the different types of grants and agencies.

Some businesses don’t have the time to devote to filling out complex grant applications, and they may
turn to a grantwriter to do this work for them. Generally a grantwriter is paid a percentage of any grant
received, though some companies hire full-time grantwriters if their financial needs are significant.
Learning the ins and outs of filling out applications, including all the necessary information, and
presenting a company’s needs in the best possible light takes work and often reaps financial rewards for
the skilled grantwriter.

Whatever your business or personal enterprise, it’s a good idea to find out if there are available grants
for your type of work. Though filling out the forms can take time, some people are well rewarded with
gifts of cash that allow them to fulfill goals and dreams. Start searching the Internet under topics like
“Grants for (whatever your field),” to see if there’s something for which you might qualify.

Grant Date:
A grant date is the specific date that some type of award or investment option is granted to an individual
investor. The grant itself may be in the form of employee stock options bestowed by an employer, some
type of restricted stock awards that are presented as part of limited time issue, or even some type of
grant or award that is presented in response to some special favor or support rendered to the issuer.
The grant date is important, since it establishes the exact date that the grantee takes ownership of the
asset and is entitled to begin earning dividends, interest, or some other type of return from that
ownership.
When it comes to some sort of employee stock option plan, the grant date is important in terms of
establishing the exact date that the employee begins to vest in the plan and accrue interest in a
retirement or other program. For example, if the retirement plan associated with the business is an
Employee Stock Ownership Plan (ESOP), the grant date serves to identify the date that vesting with the
issued shares of stock began. Typically with an ESOP, there is a specific grant date each year in which the
employee is vested with ownership in a certain number of shares, based on his or her wages or salary
for the previous annual period.

In some cases, the grant date is connected with the award of shares of stock, either as a gift to the
recipient, or as a one-time award to a valued employee. Here, the grant date helps to establish the exact
date that the ownership of those shares was received by the new owner. From that date forward, the
recipient is eligible to receive dividends generated by those shares, with the issue of those dividends
scheduled based on the terms and conditions inherent in the stock issue. In addition, the grant date also
establishes the exact date that the new owner becomes responsible for any tax liabilities associated with
the ownership of those securities.

The grant date is simply the point at which the new owner of the shares receives full ownership and
begins to receive benefits from the possession of those securities. In some cases, that ownership must
remain in place until specific events should take place, such as the sale of the issuing company or the
owner of the shares reaching retirement age. At other times, the award of the shares is extended with
no restrictions on when or how the new owner may sell the securities, making it possible to enjoy the
benefits of owing the shares for as long as desired, then sell them when and as the owner determines.

Grant Proposal:
Each year, the U.S. government along with private foundations and public corporations offer billions of
dollars in funding to individuals and organizations to be used for specific projects. This funding, which is
called a grant, requires no repayment as long as it is used to fund the project for which it was allocated.
Grants can be given to individuals, non-profit or not-for-profit companies, charitable organizations, or
educational facilities. In order to receive a grant, however, the prospective recipient must submit a
formal request to the organization. This request is called a grant proposal.

Grant proposals can be submitted in a variety of ways. Some organizations provide an application form,
while others require the requestor to submit a written document, called a full grant proposal. The
requirements for completing the grant proposal are normally spelled out in a Request for Proposal (RFP)
which serves as a guideline for preparing the grant proposal.

Preparing a successful grant proposal generally involves following a standard process. Once the
interested parties, often referred to as stakeholders, have determined that the grant will suit the
agency's or organization’s needs, the grant writer or administrator should review the RFP. Specific
attention should be paid to formatting, page count, and all necessary components for qualification. The
person responsible for writing the grant proposal should then prepare an outline or standard format
sheet to be followed by everyone involved in the writing process.

Normally, a grant proposal consists of certain set components. A cover letter is almost always required,
and while this must be concise, it also should properly summarize the grant proposal. The cover letter
should include information on the applicant, how the money will be used, and salient information about
why the applicant is a good fit for the funding.

Within the body of the grant proposal, the applicant must provide an assessment of the agency’s needs,
and then address the specific goals that the agency hopes to achieve with that funding. A detailed
outline of the proposed program must also be provided. This plan will detail how the money will be
used, and include a timeline for achieving the stated goals. The grant proposal must also describe the
means by which achievement of these goals will be measured.

A grant proposal usually offers specifics on the requestor’s qualifications, including bios of key staff, past
performance summaries, and an overview of the financial status of the agency. Frequently, a
preliminary budget is also required. Finally, a summary section should be submitted, encapsulating key
points and providing a quick overview of the proposed program. If the RFP allows, an appendix can be
used for supporting documentation, full bios, or other pertinent information that will help make the
case for the award.

In recent years, it has become standard practice for funding agencies to request a short letter of inquiry
from prospective applicants before a full grant proposal is submitted. This helps to weed out those
applicants whose goals do not match the grantors’ mission. This process also prevents agencies from
spending a lot of time and money on putting together full grant proposals for money for which they are
either not qualified or not able to fully utilize.

Successful grant proposal writing takes careful organization, planning, and skilled execution. Often, a
team is formed to handle writing various sections, and one person charged with putting together the
final product. Every grant proposal must be carefully edited, and read for both content and formatting.
Sometimes, the difference between being awarded the requested funding and losing out is in small
details.

Pledge Fund:
Pledge funds are is a form of private equity investment in which all the participants in the fund are working toward a specific
investment goal by committing to make payments to the pooled fund. The amount and the frequency of the payments are
committed or pledged as part of the process. This makes it possible to determine in advance how to make the best use of the
resources in the pledge fund at various points throughout the investment project.

One of the situations where the use of a pledge fund strategy proves helpful is with venture capital investing. For example, if a
group of angel investors decide to provide seed capital for a new business, the group determines they will underwrite the
operational costs of a new business for a specific period of time. The pledge fund is structured so that each investor contributes
resources on a pre-determined schedule, thus ensuring there is always money on hand to cover the costs of operation. This
allows the business to focus on getting established, finding a consumer base, and achieving profitability within an appreciable
period of time. Ideally, the business will become profitable before the venture capital funds are exhausted, and the investors
can begin to realize a return on their investment.

The difference with this pledge fund approach is that it allows each venture capitalist in the group of investors to determine
what projects they will support, how much they will contribute, and when those contributions will be made. This is somewhat
different from other investor group models, where all members of the group participate in all venture capital projects that the
majority of investors choose to support. From this perspective, the pledge fund provides the chance to earn a return, but
provides each investor with a greater amount of autonomy.

One of the factors that has made the pledge fund approach so popular today is the dot com crash that took place at the turn of
the 21st century. After the dot com bubble burst, many venture capitalists began to scrutinize start-up businesses more closely
before choosing to invest in them. This lead to a shift in the way some groups of venture capitalists chose to work together,
since the pledge fund approach made participating in a particular project voluntary rather than requiring that all members
participate in every project. Doing so simplified the process, since anyone who was unsure about a given opportunity could
refrain from participating, while others who supported the project could proceed without taking time to convince others to
participate.

Contribution vs. Pledge:

A contribution is an unconditional transfer of cash or other assets to an entity or a settlement or cancellation of its liabilities in a
voluntary nonreciprocal transfer by another entity acting other than as an owner. Contributions are recognized as revenue, at
fair value, in the period received. Those characteristics distinguish contributions from exchange transactions, which are
reciprocal transfers in which each party receives and sacrifices approximately equal value; from investments by owners and
distributions to owners, which are nonreciprocal transfers between an entity and its owners; and from other nonreciprocal
transfers, such as impositions of taxes or fines and thefts, which are not voluntary transfers.

A promise to give (pledge) is a written or oral agreement to contribute cash or other assets to another entity; however, to be
recognized in financial statements there must be sufficient evidence in the form of verifiable documentation that a promise was
made and received. Unconditional promises to give that are expected to be collected or paid in less than one year may be
measured at net realizable value (net settlement value) which results in a reasonable estimate of fair value. Those to be
received in more than one year should be recorded at the present value of estimated future cash flows.