How to Set Up a Scholarship Fund in Your Name

Setting up a scholarship fund in your name is a way to provide for the educational needs of deserving students while recognizing your contribution to a worthy cause. You can establish the criteria to select the recipients as well as determine who will make the decision about who receives the scholarship.

Difficulty: Moderate

Instructions

1. Choose a name for your scholarship fund. If the scholarship fund is to begin after your demise, naming your contribution as a memorial is a way to keep your name alive and associated with your passion. Some choose to include "endowment" in the naming of the fund. Still other contributors desire to remain anonymous.

2. Determine the criteria for someone to qualify for a scholarship fund set up in your name. This could specify only students of a specific geographic area, GED students, a defined ethnic group or full-time students. Other criteria may include determination of financial need, a stated grade point average requirement, specific academic or athletic interests or career goals.

3. Identify the method by which the scholarship recipient will be selected each year. Will you make the selection, or do you prefer to form a committee to make the determination? Some schools have a scholarship committee set up to choose students according to the criteria that donors like you establish.

4. Determine the amount of money you need to set up a scholarship fund in your name. If you choose to make an endowment fund, the principal is never spent. The earnings are used to award scholarships on an annual basis. The amount of principal must be large enough to provide significant earnings. Check with your investment broker to learn about current interest and the most profitable earnings potential for a scholarship fund.

5. Consider the requirements of the IRS tax laws concerning the setup of a scholarship fund in your name. It must be nondiscriminatory.

6. Let a third-party scholarship management company handle all the work to get the funds to the most qualified recipients. By letting an experienced group such as Scholarship America handle the requests for funds, everyone is treated equally and according to specified guidelines (see Resources below).

Tips & Warnings

• Encourage family and friends to make contributions to your scholarship fund rather than buy gifts for special occasions.
• Donate stock toward a scholarship endowment fund to avoid capital gains tax.

Resources

• Third-party administrators at Scholarship America

[amipatel68]

on 11/5/2009 I am looking to make arrangements to set up a scholarship fund to begin after my demise. How do I go about doing this? What instructions do I leave my trustee on how to set it up? My email is: [e-mail]. Can someone provide me simple detailed step by step instructions on how I can do this? My initial amount to start the fund is 50K and would like to have the fund set up where the general public could contribute to the principle and the fund can help students for years to come....

[fbcryer]

on 5/27/2009 My family would like to set up a scholarship fund of some sort in my brother's name. He died suddenly Nov 23, 2008. He was very involved with the Cross Country track team @ Calvary Baptist School and we would like to direct it to those kids if at all possible. Can someone please diret how we should do this? Our initial goal is $5000 - but we have no idea on how to go about starting this fund. Please help!

[chula70]

on 11/5/2008 My 13yr old son was killed in a car accident on 5-17-08 in memory of him I want to start up some kind of scholarship fund but dont know the 1st thing to do. I did not even graduate high school So don't know how to start but my child was very smart and loved school and I know in my heart would love for a scholarship be in his name. My name is gina rivera and my email address [e-mail] can anyone give me any advise. I'm not even sure i am on the right page to post a request like this