Here goes: Endowments include a whole bunch of separate funds, most of which are designated for particular purposes. (For example, scholarships for students from a particular county are pretty common.) (1/)
In normal times, colleges count on spending a portion of the investment returns and leaving the principal intact. Typically, colleges draw down about 4.5% of their endowment each year--lower than the long-run rate of return. (2/)
People think of endowments as this giant slush fund that colleges can use as they want, but the majority of funds (something like 70%) are restricted for particular purposes. Liquidity may also be a challenge for colleges operating as hedge funds. (3/)
Most colleges have tiny endowments that generate little income. The typical private college can get about $1,000-$2,000 per year in endowment revenue--but remember most of that is restricted. Most publics have less. (4/) 
Colleges really don't want to spend more out of their endowment during bad times unless absolutely necessary. It's like taking money out of the stock market at a big loss. So they try to raise new money instead. (5/)
So, to sum, endowments at most colleges are small extra sources of money that donors provide to fund things like scholarships and athletics. But colleges generally can't use them to get out of this crisis. (6/6)
