How to Start a Scholarship Fund

If you want to create a scholarship fund, there are a number of factors to consider while making the plans beyond simply giving a student money for education. If you are fortunate to have the resources available to establish a scholarship, follow a guidelines to setting it up. Once created, you'll help young people earn the education they want and deserve.

Instructions

1. Decide where you want to start your scholarship fund. You can choose to do this through an institution of education, a private or community foundation, a corporate foundation, a public charity or even a club or trade association.

2. Determine how much money you want to give. An endowed scholarship fund typically begins with $10,000 or $25,000, depending on the organization in which it's being established. Many educational institutions and foundations have minimum amounts in place.

3. Consider naming your scholarship fund in your name or in memory of a loved one, friend or an inspiring student. Make sure you adhere to all IRS rules pertaining to charitable giving and setting up a scholarship fund.

4. Choose the eligibility and selection criteria for your scholarship. Many organizations advise making your scholarship as flexible as possible as it pertains to race, GPA, residence and the amount of the award.

5. Allow an advisory committee, set up by the organization holding your scholarship, help you steer your scholarship guidelines as much as possible. Often, these committees work with you to set up student selection criteria, set policies and select recipients.

Tips & Warnings

• An endowment fund is one in which the initial gift and any future contributions are invested and held in perpetuity. The gift's principal remains untouched. The investment's earnings serve as the scholarship money awarded.