At some point your business, nonprofit organization, or even your family may consider starting a scholarship fund. Scholarship funds have been created in memory of a loved one, to honor one’s charitable causes, in an effort to leave a legacy, to help members of a community, and many other reasons. In this post, we’ll explore what a scholarship fund is, who can start one, and so much more.
In its simplest form, a scholarship fund is a grant or pool of money that is intended to be given to an individual directly for the purposes of paying for some form of education. This money can be used for a college or university or a technical school.
Essentially, scholarship funds are a way for individuals, families, businesses, etc… to invest in their community’s future and help people achieve their academic dreams.
You may be wondering, can anyone start a scholarship fund? In short, the answer is yes. While there is a common misconception that only universities, government organizations, and corporations can create scholarship funds, the reality is that virtually anyone can create one.
However, it’s worth noting that if you hope to gain any tax deductions or create a tax-exempt foundation for the purposes of giving away scholarship monies, you will need to adhere to the IRS guidelines. There may also be state implications and laws you might need to be aware of. In other words, before announcing your plan to give money away for any reason, you should do your research into the rules and regulations where you live.
Now that we’ve addressed the questions of what they are, and who can start them, let’s take a brief look at the basics of what you need to know if you intend to start one for yourself, or through an organization you work with. We’ll go into this in greater detail in an upcoming article, but here’s what you need to know to get started:
While anyone can start a scholarship fund, it’s best to get started with the end recipient in mind. For example, in creating a scholarship, you may have a specific type of student in mind that you want to extend help. Many scholarships are set up with the intention of assisting low-income families, or to help minorities and women attend school without needing student loans to pay for their education.
Think about things like:
If you want to set up a scholarship on your own but lack the funds to do it, you can raise money by accepting donations. Again however, doing this legally will require paperwork and setting up your fund properly.
Deferring to the IRS guidelines on Grants to Individuals and Company Scholarship Programs may be a good place to start. You may also want to discuss your plans with a certified public accountant and an attorney.
Once you’ve set up your fund properly, you may be able to approach community members, your local church and community organizations, or simply ask for help from your family members and friends.
Next, it’s time to settle on the criteria of who is eligible for your scholarship. You can write out your criteria, and at this point might want to consider creating a committee to help you spread the word and help with the selection process.
After that, all that is left is to create your application form and start attracting candidates to apply for your scholarship fund. That’s where we come in! SmarterSelect scholarship management software was designed with both big and small funds in mind. We help you create and launch your scholarship applications in less than 24 hours.
Once you’ve got all your ducks in a row and are ready to launch your scholarship program, we can help you with the rest of the process. From filtering candidates to selecting the perfect recipient, and everything in between, SmarterSelect makes running a scholarship fund easy.
So who can start a scholarship fund? You can, and we’re here to help you do it. Sign up and get started for free today!