Can any one please explain the main differences between the two as it seems to me that they reflect the same thing. Thanks in advance
foundation has some spending limit they have to hit each year to be qualifed as a foundation. However, endowment doesn’t have such rule. That is the only one I can think of.
Do they also have different tax considerations?
We need some one who already implement ips in his work on both cases to explain to us
Foundations = make grants & are funded by gifts (typically only one gifter). They have to spend a min. amount per year to retain their status as tax-exempt institutions Endowments = more long-term in nature & typically operated as non-profits. Endowments also are built up over time by many donors. Think Harvard. Also tax-exempt
For risk tolerance type question ** You might be influenced over the “required” spending rate of foundations. But they key remains with what % of the receiving institutions budget relies on the foundation/endowment. So if a hospital has an operating budget composed of 95% income generated from 1 foundation, than that foundation will have a very low risk tolerance level due to the reliability of the hospital. But if the hospital’s budget has 6 foundations, and the one you run only suppies 10% of the hospitals budgetary needs, than you can have a smewhat higher risk tolerance.
The differences between the two (at least those the CFAI cares about) are made crystal clear in the curriculum - see page 285 of volume II and what follows. Are you asking this question after having read those materials carefully?
I’m using schweser from level 1 dear captin . No time and no motivation to read the whole cfa books. It will take more than 1 year to me to finish this books 
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You could probably answer your own question by reading the material in less than the time it will take you to get a (who knows how complete or reliable) answer from folks on this board. I’m sure the same goes for almost any other question you may have after reading Schweser but not the material.
Dear Captain, Take it easy on the guy. He just needs some clarification…
Dear Captin, Thanks for your advice i will took this advice in consideration next year when i failed this year.
“Foundations are typically grant-making institutions funded by gifts and investment assets. Endowments, on the other hand, are long-term funds generally owned by operating non-profit institutions such as universities and colleges, museums, hospitals, and other organizations involved in charitable activities.” (CFA Institute 2018, p. 484)
Nine years after the question was asked, the answer, while correct, may not be of much practical value to the other posters in the thread.
You are correct S2000magician. However, I posted this for current candidates such as myself.
I often stumble upon these threads when looking up a question in Google search.
Appreciate the work you do on this site, S2000magician!
That was helpful BraveBucket. Thanks.
I think endownments are legally required to maintain their real rate of return and have no spending requirements. So all else equal, endownments would have a higher risk tolerance than foundations. That’s pretty much the extent of my knowledge.