The Smith family contributed $200,000 to a local college to establish a scholarship fund in the name of their late father. Scholarships will be provided from the fund earnings. This is best described as which kind of contribution?

Question

Quizplus · Accepted Answer

The contribution made by the Smith family is an endowment contribution, as they have contributed a specific amount of money to establish a scholarship fund, from which scholarships will be provided through fund earnings. Endowment contributions are externally restricted contributions that require the principal amount to be invested to earn income to support ongoing operations or other specific purposes of the organization.

The Smith Family Contributed $200,000 to a Local College to Establish