I often hear the term endowment for the arts.
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They are a bunch of money, assets, and investments donated to fund a cause over time. Let’s say I have 1 million dollars to spare. I see this charity that I love and it needs $100,000 a year. If I give it the flat 1 mil they’ll run for 10 years. But if I set up an endowment that invests that 1 mil, I can say “1/2 of the profits go to the charity, the other half goes back into the investment portfolio.” Maybe the first year it only grows 5%, so 25k to the charity, 25k to the fund. This goes on and on. For the first few years they would get much less than 100k, but in time they’ll get much *more* than that. In the long run setting up an endowment should give more money over a longer period of time than a flat donation.
This is great for long term causes which need constant or consistent funding. Donating money to a college scholarship or medical bills is great, since after the kid finished college or person is healed there’s not much more need for the fund. Setting up an endowment can fund long term things like a museum, school, parks, or environment causes, among others.
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