Are you looking to make an impact in students’ lives or just feeling generous? You may want to consider starting a scholarship fund! It’s certainly one of the most life-changing services you can give to deserving students. Here’s what you should know before starting a scholarship fund and how to get started:
The Importance of a Timeline
Before taking any action, you might want to establish a project plan or timeline together for your scholarship fund. Be sure to determine key dates, such as when you will introduce your scholarship to the public, when you will begin accepting applications, when the application pool will open and close, when you will announce winners, etc. Determining the duration of your award, and any terms and conditions associated with your scholarship fund is also critical before starting one.
Some things you might want to consider are: How many semesters will your awards be granted to a given winner? And what are the eligibility requirements? You should also figure out how many scholarship grants you want to award each year and how much money should go to each recipient.
Some scholarships are one-time awards and cannot go to the same student twice. Others are renewable and can hinge on academic achievements for future rewards. All of this is up to you to decide.
Naturally, you should have a clear idea of which individual(s) you are trying to help before creating a scholarship fund. Are you looking to target students with a particular major or ethnicity? Many charitable individuals and foundations invest largely in high school individuals who would otherwise not have an opportunity to get a college education. These scholarship funds target students living below the poverty line, with little or no access to educational and financial resources. Perhaps your scholarship fund is intended to gift a single individual or small group of individuals. By creating a scholarship now, you can do just that.
How to Set Up a Scholarship Fund
In regards to how to set up a scholarship fund, we recommend speaking with a professional. Your bank, for instance, should be able to confirm the specific requirements to accept scholarship deposits on behalf of another individual. For a charitable scholarship fund, you may want to consult with a tax expert to ensure that your fund meets all applicable IRS requirements when you open your bank account. Please note that the IRS requires that scholarship programs benefit a broad charitable class as well as exhibiting a nondiscriminatory selection process. Charitable class is defined as a group sufficiently large and indefinite enough to better the community as a whole with the award. (Though you don’t want your requirements to be so broad that the number of applicants overwhelms you)
If you’re wondering how to start a scholarship fund from scratch, you may want to begin by referring to IRS Section 4946, which specifies which types of individuals are excluded from the charitable class when it comes to determining the tax-deductibility of scholarship contributions. Please note that Section 4946 excludes family members from receiving tax-deductible scholarship grants,and specifies that the class of recipients be broad and indefinite, such as “lower-income students.”
Another alternative is going through TuitionPledge to set up a one-time scholarship or multiple scholarships with tax exemptions. Tuition Pledge is AZ non-profit organization and contributions are tax-deductible to the extent permitted by law, designed to make it easier for individuals looking to create scholarship opportunities easier.
Once you’ve set up your bank account, it’s time to begin funding your scholarship. Whether through your own contributions or those of other donors, you should not distribute or advertise a scholarship until you have sufficient capital on hand.
Will you be putting your own money towards your scholarship fund? If so, it is important to calculate how much and when. Any amount less than $10,000 may not be sustainable. If you are strapped on cash, and plan on outsourcing donors, you will want to account for that as well. Donations can come from large corporations, universities, or group or individual fund-raising efforts.
Thinking about how to set up a scholarship application that’s effective? We recommend keeping your application form as concise as possible. Luckily, Scholarful does most of the work for you. Scholarful has created a streamlined application for students to apply to any scholarship, along with any specific requirements you may have for your scholarship.
Generally, a straightforward application will make for a much easier candidate review process, and can save you hours. You should be sure to highlight what you’re looking for in an applicant (e.g. top two or three qualities), which can be added onto your application on Scholarful. We recommend keeping your questions concrete and avoid multiple essays. Scholarful requires one general essay across the platform, which can be used in your evaluation for a winner. We highly recommend requiring that applicants share their high school transcripts, test scores, as well as FAFSA or other financial need related forms to make the decision process easier for you.
Setting up a scholarship fund is simple in comparison to maintaining day-to-day operations and scaling efforts appropriately. If your scholarship fund gains some traction and you find yourself with too much on your plate, don’t panic. It may just mean it’s time for you to consider outsourcing some of your operations to an established third-party or scholarship administrator.
Many scholarship funds and foundations have joined Scholarful, for that very reason: to manage applications seamlessly, and eliminate mundane elements of the candidate review process.
New-to-market scholarship funds often use an intermediary to ensure compliance with state and federal laws, assist in setting up the programs, and administer awards. If you will be involving a third-party, it’s important to choose your affiliates as strategically as possible.
After setting up a scholarship fund, it’s in your best interest to create a website for your listing, fill it with helpful content, and promote it online. It’s no secret that students are tech-savvier than ever these days. Young people rely heavily on technology and many choose to use the internet in all of the professional and academic endeavors. Putting your application online makes for easier access for students and you. Not to mention it saves you loads of paper. Luckily, you can do all this on Scholarful.
How to Start a Scholarship Fund With Scholarful?
While a scholarships program is a promising solution in theory, in practice this isn’t the case. While tons of scholarships exist, they offer no real benefit unless a student applies to dozens and dozens of them.
On the scholarship foundation side, it doesn’t get any easier. Anyone who’s gone through the process knows just how time-consuming it is to create a scholarship, go through all the steps and manage it. On top of that, not a lot of people have knowledge and experience regarding how to start a scholarship. That’s why Scholarful was created and designed for students and scholarship providers alike.
Whether you are a student or a scholarship provider, Scholarful is here to be your one-stop-shop for everything related to scholarships. If you’re thinking about how to create a scholarship effortlessly, this is the solution for you. It’s the only platform of its kind, made to change the entire game for scholarships.
The platform allows you to create your scholarship, set your guidelines and criteria, scale your scholarship through limited marketing resources, access to thousands of students, manage your scholarship applicants, review applications, grade essays, and notify winners.
Learn how to start a scholarship fund, the quick and easy way at scholarful.com.