There are specific laws about university endowments and how they can be spent. There isn't a single vault full of money called 'The Endowment.' It's thousands and thousands of buckets, each earmarked for specific purposes, usually invested so that the university can function off the investment of the endowment monies, instead of the endowment itself. But even so, many if not most of those buckets cannot legally be spent. Stanford can't reach into 'the endowment' and throw money at a problem.

Yes, university donors often give grants to specific programs and initiatives. And those very same donors are the ones that have the biggest stake in preserving legacy admissions. They'd have zero issues funding a legal defense of legacy admissions.