A common misconception is that scholarship funds can only be created by government entities, universities or corporations.
Individuals set up scholarship funds for a variety of reasons, such as supporting educational opportunities and college attainment, wanting to honor or memorialize a loved one, establishing a family legacy of giving, or supporting an educational institution.
Many philanthropists turn to community foundations to start their scholarship funds for simplicity and ease. Community foundations provide staff assistance, community expertise and a variety of services that help donors set up and award scholarship dollars to students. They’re also not tied to a particular educational institution.
In 2020, for example, The San Diego Foundation donors awarded $3.3 million in scholarships to more than 1,000 students. Among the 2020 scholarships recipients, 63 percent were first-generation college students and 83 percent were from low-income households, based on Expected Family Contribution data.
If you’re considering establishing a scholarship fund, where do you begin? Our philanthropic experts have outlined simple steps to help get you started.
How to Set Up a Scholarship Fund
Starting a scholarship fund is easy if you follow these simple steps:
1. Identify who you want to support
Are you interested in helping underrepresented populations obtain college degrees? Or, maybe you have a passion for supporting female adults in science and technology? The first step in setting up a scholarship fund is identifying the students you want to support. Community foundations are great resources if you need information on community needs and opportunities.
2. Decide what to give
Almost any kind of asset may be used to start your scholarship fund, including cash, publicly traded securities, closely held stock, interests in limited partnerships, real estate, life insurance, personal property and private foundation assets. Tax deductions are earned at the time of your gift, while scholarships awarded continue into the future.
3. Define your scholarship timeline
Your scholarship can be a one-time gift or an annual fund that you award once every year. Another option is to create a scholarship endowment fund, which is permanent.
4. Choose your eligibility requirements
Community foundation staff assists with establishing scholarship eligibility requirements and criteria that reflect your passions and priorities. At The Foundation, we use our experience and expertise to identify the best criteria to attract the most qualified applicants.
5. Name your scholarship fund
Scholarship funds can be created to honor or memorialize someone special, to honor the passions of an individual, or on behalf of a business or organization. Whatever the reason, your scholarship will carry the name you choose. If you prefer anonymity through a community foundation, you can choose a name that reflects your charitable purpose(s).
6. Create a selection process
You can be as involved as you like in the recipient selection process. Community foundations offer scholarship selection committees comprised of experts in education, who can put their years of experience to work for you.
Our Community Scholarship Program is the largest in the region outside of the university system and provides a variety of scholarships to high school students, current college students, graduate students and adult re-entry students.
Since 1997, the program has awarded more than $36 million to thousands of students.
The San Diego Foundation offers scholarships that support a variety of career paths and backgrounds, including awards for students who want to pursue careers in STEM or the arts, and scholarships for students who come from a foster care background. Scholarships are awarded to students continuing their education at four-year universities, two-year colleges, graduate and trade/vocational schools.