Colleges and universities maintain endowments to directly support their activities as institutions of higher education. Endowments are typically investment funds, but may also consist of cash or property. Current tax law benefits endowments and the accumulation of endowment assets. Specifically, endowment fund earnings are exempt from federal income tax. Additionally, taxpayers making contributions to college and university endowment funds may be able to deduct the value of their contribution from income subject to tax. The purpose of this book is to provide background information on college and university endowments, and discuss various options for changing their tax treatment.