[thomaslord]

The best way to treat an endowment is like a retirement fund, except the goal is for the institution to never die and therefore to never exhaust the endowment. If the endowment is invested and makes gains, the institution can grow the endowment (which is necessary for it not to be devalued by inflation over time) and also spend some of the returns.

While I wouldn't argue leaving endowments completely untouched in this situation is necessary, I think saying that "the colleges/universities that aren't managed by complete idiots use these endowments to hedge exactly this rot of risk" and criticizing them for investing their endowments is a dramatic oversimplification of the situation.