[apical_dendrite]

Typically, they're set up so that the income goes to a particular purpose, or so that only the income is used. For instance, a big chunk of Harvard's engineering and CS professorships are funded through a donation from a 19th century inventor of machines to make shoes. His intent was to fund professorships in "practical sciences" in perpetuity, and he had particular terms - he wanted salaries to be competitive for instance. The university can't legally spend down the principal or use the money for some other purpose.

[SJC_Hacker]

But they can use the interest.

A $20 billion endowment at a 5% ROI is $1 billion per year

[garden_hermit]

The interest is already what they are using. That is what all these scholarships and endowed chairs and so on are paid with.