Generally, I agree with you. In most instances, endowments are designed to provide continuing benefits for those that receive them by earning a market rate of interest while keeping the core endowment principal intact.
While it might be true that Muffet’s current contract with Notre Dame will be unaffected by the endowment, her future contract salaries would be calculated based as it is now on her current and predicted worth to the school, but would also be augmented with benefits from the endowment. While Notre Dame will almost certainly use the endowment to "free up $ for use in other areas", unless her value to the school in some way diminished, she should normally expect that her salary would substantially increase.
Naturally, endowments and ensuing salary enhancements produce an encouraging “rising tide” effect that would commonly advantage women’s basketball.
