Endowment invasion is when an institution draws on its
financial endowment
A financial endowment is a legal structure for managing, and in many cases indefinitely perpetuating, a pool of financial, real estate, or other investments for a specific purpose according to the will of its founders and donors. Endowments are o ...
to pay off debts and cover the yearly operating expenses. In
New York
New York most commonly refers to:
* New York City, the most populous city in the United States, located in the state of New York
* New York (state), a state in the northeastern United States
New York may also refer to:
Film and television
* '' ...
the practice requires approval from the state attorney general’s office and the
New York State Supreme Court
The Supreme Court of the State of New York is the trial-level court of general jurisdiction in the New York State Unified Court System. (Its Appellate Division is also the highest intermediate appellate court.) It is vested with unlimited civ ...
. By 2009 most states had adopted
Uniform Prudent Management of Institutional Funds Act, a law which allows "invading principal". It is considered a last resort for any institution to stave off closure.
Examples
* From 2003 to 2009
New York City Opera
The New York City Opera (NYCO) is an American opera company located in Manhattan in New York City. The company has been active from 1943 through 2013 (when it filed for bankruptcy), and again since 2016 when it was revived.
The opera company, du ...
drew down their endowment from $57 million to $16 million to pay off debts and cover annual operating expenses.
[
* In the 1980s the ]New-York Historical Society
The New-York Historical Society is an American history museum and library in New York City, along Central Park West between 76th and 77th Streets, on the Upper West Side of Manhattan. The society was founded in 1804 as New York's first museum ...
began using money from their endowment to pay their annual operating costs and cover their salaries to the point where by 1988 they had only enough money in their endowment to pay for another 18 months of operating expenses.
See also
* Deaccessioning
Deaccessioning is the process by which a work of art or other object is permanently removed from a museum's collection to sell it or otherwise dispose of it.Report from the AAMD Task Force on Deaccessioning. 2010. ''AAMD Policy on Deaccessioning' ...
, the practice of selling museum objects to cover expenses
* List of wealthiest charitable foundations
This is a list of wealthiest charitable foundations worldwide. It consists of the 45 largest charitable foundations, private foundations engaged in philanthropy, and other charitable organizations such as charitable trusts that have disclosed t ...
References
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Financial endowments