Endowments: Stable largesse or distortion of the polity?

As ever more private resources are held in foundations and nonprofit organizations' endowment funds, more scholars and practitioners are demanding that these assets be put to good use immediately. Those favoring the preservation of capital-primarily representing private foundations-sound unnecessarily cautious. This article examines endowment conservation from a variety of critical angles, finding strong rationales for both conserving and liquidating endowments. Policy responses to the buildup of endowment assets include requiring a faster payout or regulating the amount and type of administrative expenses included in annual payout. This article reviews the relationship of the business cycle and wealth distribution to annual giving. The most prudent course, in view of the cyclical nature of giving as well as the substantial generational wealth currently held by elders, appears to be to conserve significant assets now in order to establish a stable flow of future social benefits.