### Question
How does the law define endowment fund?


### Answer
Under *20 U.S.C. § 1058*, **endowment fund** is defined as:

> a fund that—


(1) is established by State law, by an institution of higher education, or by a foundation that is exempt from Federal income taxation

#### Citation:
  - *20 U.S.C. § 1058*
  - Heading: **CHAPTER 28-HIGHER EDUCATION RESOURCES AND STUDENT ASSISTANCE > SUBCHAPTER III-INSTITUTIONAL AID > Part A-Strengthening Institutions**

