> Almost all endowment money is restricted, meaning it is earmarked for a specific purpose by donors. They can’t just pay out of the endowment.
I doubt that distinction protects the funds from a judgment creditor. The endowment money belongs to the university. Even though the university can only spend it in a certain way, that is an internal matter between the university and its donors. If the university did not have other funds from which to pay the judgment, I doubt the endowment money is protected just because it wasn't earmarked for "in case you lose a lawsuit."
> Even though the university can only spend it in a certain way, that is an internal matter between the university and its donors.
An earmarked donation may legally constitute a trust. If an asset forms part of a trust, the university can only spend it in accordance with the terms of the trust, unless they have permission of a court to vary them (the cy-près doctrine). Creditors generally can’t claim assets held as part of a trust, unless the debt/tort/etc has some direct connection to the trust
I doubt that distinction protects the funds from a judgment creditor. The endowment money belongs to the university. Even though the university can only spend it in a certain way, that is an internal matter between the university and its donors. If the university did not have other funds from which to pay the judgment, I doubt the endowment money is protected just because it wasn't earmarked for "in case you lose a lawsuit."