If you’re considering establishing your own scholarship fund or contributing to an existing one at The San Diego Foundation, you probably have a few questions.

To make things easier for you, we’ve outlined the 14 most popular questions we’ve heard from scholarship donors below with answers from our in-house expert, Danielle Valenciano, Director, Scholarships.

14 Scholarship Questions Answered

San Diego Foundation: What is the minimum amount to open a fund?
Danielle Valenciano: The minimum to open a scholarship fund at The San Diego Foundation is $25,000. You may also contribute to an existing scholarship fund that matches your passion.

SDF: What are the fees involved?
DV: The Foundation’s annual fee is 2%. We find this to be very competitive, especially when compared to most universities, which charge 5-6%.

SDF: What is the difference between an endowment and non-endowment scholarship fund?
DV: Endowment funds are permanent funds where the principal is invested and grants are made through interest, dividends and grants. Because the principal is not spent, the endowment funds provide scholarship assistance in perpetuity. Non-endowment funds are not permanent, where the entire fund is available immediately for awarding scholarships.

SDF: What size scholarship will I award?
DV: It is entirely up to you. We only ask that you don’t award less than a $500 scholarship.

Understand why establishing a scholarship fund at The San Diego Foundation could be your perfect option to make a difference for our next generation.

SDF: What criteria can I use to award scholarships?
DV: Our scholarship team will work with you to find the best criteria to match your passion and attract the optimal number of applications. If you aren’t sure what type of scholarship you’d like to offer, our staff will be happy to review options with you.

SDF: Am I required to give out a certain amount of scholarships every year?
DV: No. Every year you have the option to award as many scholarships as you want – or none at all.

SDF: Can I be involved in the selection process?
DV: Yes. There are some IRS rules that must be followed, but you can choose to be as involved as you’d like.

SDF: What kinds of scholarships are needed most?
DV: The Foundation offers a wide variety of scholarships for graduating high school seniors, current college students, adult re-entry and trade or vocational school students. We also have scholarships for special circumstances, like divorce, or for special activities or talents.

San Diego Scholars

SDF: Will I hear from my recipient(s)/Can I remain anonymous?
DV: Yes. You will receive thank you notes, progress reports and, if you choose, you may sit with and get to know your recipient a little better at a Scholarship Celebration Luncheon. You also have the option to remain anonymous.

SDF: Can I direct a scholarship to a specific student?
DV: No. Per IRS rules, there must be a competitive process. A particular student may not be pre-identified to receive a scholarship.

SDF: Is the scholarship paid to the student in cash?
DV: No. A check will be made payable to the student’s school and applied toward the student’s account. This ensures your scholarship is used properly for its intended purpose.

SDF: Can other people contribute to my scholarship fund?
DV: Yes – and we encourage it! Your family, friends, coworkers and others can all direct donations into your scholarship fund.

SDF: Can I direct my scholarship to a specific institution, college or university?
DV: Yes. You can designate a particular college (perhaps your alma mater!) to receive your scholarship funds. The Foundation is happy to set up an annual payment to the institution of your choice.

SDF: What are the tax benefits of setting up a scholarship fund?
DV: All contributions to the Foundation are tax-deductible. This means the following for donors:

  • You can deduct the value of your gift for tax purposes in a specific and/or particularly advantageous year, yet provide for the distribution of your donations over a course of time.
  • You and your heirs can avoid punitive estate taxes on gifts made.
  • With a gift of appreciated stock, you can avoid costly capital gains taxes while realizing the maximum deductibility of your donation.

Compared to many other charitable giving options, including gifts to a separate, private foundation, the rules and regulations governing The San Diego Foundation are much less onerous.

Foundation staff members are experts in the tax benefits and laws regarding all contribution types, and we are pleased to provide straightforward explanations of tax strategies based on the gifts you may currently be considering.

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