An “endowment” in this context refers to the pool of money donated to the university to be used in accordance with the wishes of the donor. Most universities are restricted to spending no more than 5% of the total endowment per year, but in the case of a Harvard where the sum is $40.9 billion, this means that they have access to over $5 billion.

Side note, as a big fan of Marcus Aurelius I enjoyed hearing that it was he who set up the very first recorded endowment for the major schools of philosophy in Athens circa 176 AD.

Donors are allowed to restrict how the schools spend the donated money using an investment policy statement (IPS). Other than these exceptions though the money can be used for standard outgoings, including salaries and required resources (as long as spending stays within the 5%).