In a recent article, we shared that anyone can start a scholarship fund. In this post, we’ll go into greater detail of the five step process for how to set up a scholarship fund, funding a scholarship, and so much more.
Before we get into the steps of creating a scholarship fund, you might be wondering how much this will cost in the first place. According to Money.com, establishing a scholarship fund can cost as little as $10,000. Kiplinger states however, that you usually need at least $20,000 to get your scholarship launched.
The reason you’ll need $10,000 to $20,000 is that this fee is considered the minimum to have an “endowed scholarship.” What is an endowed scholarship? Bankrate explains,
“An endowed scholarship is a donation made to a college that earns interest each year.”
Kiplinger shared that if you hope to give away $1,000 every year, you’ll need $20-$25,000 to produce the interest necessary to fund the annual scholarship. Put another way, the $1,000 is the interest earned on the initial gift, and this amount is what is given away annually. Larger scholarship funds (i.e. hundreds of thousands or millions of dollars in the original deposit) produce more interest making it easier for scholarship programs to give away multiple awards or larger sums to recipients.
Now that we’ve gotten the hard numbers out of the way, let’s explore the five step process for how to set up a scholarship fund. They are:
We hope this post has given you a starting point for the information you need to look into for your scholarship fund. Once you’ve got all your ducks in a row, we’d love to help you create your application and launch your program. To learn more about what SmarterSelect can do for you, click here for a free demo.
Starting a scholarship fund can cost around $10,000. The reason you’ll need that amount is that this fee is considered the minimum to have an “endowed scholarship.”, which is a donation made to a college that earns interest each year.2. What are the steps in setting up a scholarship fund?
There are five steps in setting up a scholarship fund: