It’s no secret that college is expensive. If you are looking for a way to alleviate some of this financial pressure off a student on their educational journey, choosing to start a scholarship fund is a great way to accomplish this.
It may seem unsafe, but creating a scholarship fund is not as complex as it may seem. Luckily, we have put together a step-by-step guide on how to start a scholarship to help you get started.
How to Start a Scholarship Fund
There is a lot to consider when starting a scholarship, but you don’t have to do it alone. Depending on the resources you have at your disposal, and how involved you want to be in the selection process, you may need to take extra steps outside our list if you’re going to do everything alone. Deciding on scholarship funds, which scholarship management organization or scholarship management service you want to use, and how to start a scholarship fund can all be decisions you need help with.
There are different kinds of funds, including personal or memorial funds. It also decides the minimum award allotted and whether it could benefit a nonprofit organization or a private foundation.
But, if you need a little support to help you get started, we can also guide you in the right direction.
Decide Where You Are Going to “Host” Your Scholarship
Evaluate your resources. If you have time, staff, and a nonprofit, you could establish your scholarship program through your nonprofit and host the information on your website. This way, you can control everything. In addition to setting the requirements for applicants, you can also pick finalists and winners. You’ll have control over how the scholarship appears online and can advertise as you’d like.
With this control comes a lot of responsibility. You may have the advantage of already having a nonprofit, but a lot of staffing is needed to start a scholarship.
If you already have a website set up, you will have to design a webpage to host information about the scholarship and a place to receive materials to be considered for the award. The applications will also have to be organized and filtered. Someone will also have to transfer the scholarship funds to the winner.
This is a lot to handle for someone with an entire team—if you are someone with some extra money and goodwill, managing all of these tasks on your own will be nearly impossible.
Some scholarship management services will take care of all these tasks for you. One you may be familiar with is Bold.org. This and similar organizations will take the details of the applicants you are looking for and handle everything from collecting donations to advertising to help you find your winner.
Define Your Applicant
Once you define how you will set up your scholarship, you need to figure out who you want to help.
There are a few ways you could go about deciding who to give your money to. What qualities are important to you? Do you want to honor the life of someone you care about or admire and want to award a memorial scholarship fund to them? Do you come from a city or state with many young students who need help? Do you want to help first-generation college students? There are dozens of admirable reasons to create a scholarship, and plenty of people need help.
You can also choose if the scholarship criteria are for low-income students, a private foundation to help future generations, if students need to collect donations, etc.
Once you have that narrowed down, you have to decide the requirements to be met to be considered. These are students. You can have a GPA or standardized test score requirement. You can also require students to be members of academic societies, other clubs or organizations, or have a leadership position.
Essays are also helpful in learning more about each applicant to see if they have the qualities you are looking for. Be mindful of the word count requirement. If your scholarship reaches many students, you will have a lot of reading to do.
One way around this would be to have a smaller word count and make the question more specific. This way, you can get straight to the information you are looking for without the extra reading.
Put Your Scholarship Together
Now that you have an idea of what direction you want to go in, it’s time to put your plan into action.
Those creating and sponsoring their scholarships on their own will need to begin informing their team and setting deadlines. It would help if you established a schedule to have enough time to present a well-put-together scholarship. Once everything is sorted out and everyone knows what they’re responsible for, someone will have to oversee or manage your team to ensure everything gets completed on time.
It is a lot of work to create a scholarship. For those utilizing a scholarship management service, this is the easiest step. If you pick a professional organization, you can expect them to have:
- A solid and experienced team
- A platform with a lot of visitors
- A strategy to get traffic to your scholarship page
- The resources to organize applications and help you select finalists
Bold is an excellent example of an organization that is adequately equipped to handle everything regarding your scholarship. Not only do they have everything on the list, but they also have a network of donors who can opt to pitch in on your scholarship fund.
What is a Scholarship Fund?
A scholarship fund is a grant awarded to traditional college applicants to pay for their direct educational costs. The selection process used to determine the fund’s winner is objective and non-discriminatory.
How do Scholarships Work?
First, someone has to create and fund the scholarship. This can be done by a single person or a group like a club or community foundation. The entity sponsoring and awarding the money will set up a way that interested applicants can find information about the scholarship and apply for the scholarship.
Once the application deadline has been reached, applications will no longer be accepted. The team in charge of the selection committee will compare applicants until they agree on finalists or a winner.
The winner will be notified, and they will receive the money soon after.
How to raise money for a scholarship fund
There are many simple and reliable ways to raise money for a scholarship.
The easiest is crowdfunding. Many popular online platforms can connect you and your scholarship with thousands of people across the globe. You can create a page with the information bout the type of student you want to help, and people who feel compelled to can donate money to your scholarship fund. All the money you give you has to be used for the scholarship.
Another way to raise money is to sell a product. This can be not easy if you don’t already have a business set up or something to sell. Don’t reinvent the wheel! Ask a local company if they will be willing to donate a certain percentage of their profits for a day or two.
You can also use a nonprofit if you have one set up already. These are time-consuming to establish from scratch, so the other options might be better for you if you want to get started quicker.
IRS guidelines for starting a scholarship fund
For the scholarship not to be considered a taxable expenditure, it must meet a specific set of standards set by the IRS. We will give you a general outline, but you can review the criteria on the IRS website for more specific details.
There are two main things to remember when starting an IRS fund. The first is that the process used to select the awardee(s) must be nondiscriminatory and objective. The method also has to be approved by the IRS as well.
Secondly, the scholarship money must be used for study at an institution or for a specific purpose by the grantee. But, the scholarship recipient doesn’t have to be high school students, current college students, or graduate students though these are common awardees.
Why go with Bold.org?
There are plenty of other platforms and methods that you can use to handle everything related to your scholarship, so why go with Bold.org?
The most important reason to use Bold.org is that everything is that they manage most of the process for you. Need a donor? They have a donor team for questions and a network of donors for money. Don’t have a selection team? They can take care of that for you as well.
All they need from you is some information about the applicant you are looking to help and some basic information about the scholarship, and you’re all set!
How to set up a scholarship fund today
Creating a scholarship from scratch on your own can be time-consuming and arduous. For your scholarship to serve its purpose, you need an excellent team to handle all the ins and outs of the process. This team is also essential for saving you time as well.
You need to work with a scholarship management organization to start your scholarship today. These organizations have the resources to connect you with applicants and donors who can make your scholarship a success.
If you are ready to get your scholarship up and running as soon as possible, there are some great resources to get started today.
Frequently asked questions on how to create a scholarship fund.
Still, have some questions? Maybe we have an answer for you below.
Will donations to the fund be tax deductible?
Yes! Donations to the fund are tax-deductible as long as it meets specific requirements.
Who can receive scholarship funding?
Scholarships are typically awarded to students who are associated with an educational institution.
How does a scholarship fund work?
First, someone has to sponsor the scholarship and set requirements for the selection process of the awardee. Applicants will submit proof that they meet the needs of the scholarship. A selection team will go through the application and select a winner.
How much does it cost to start a scholarship fund?
It depends on the method you are using to start the scholarship fund. Most management organizations require at least $500. It can also go toward tuition or different financial awards, or even community services or different programs.
Can anyone start a scholarship?
Yes! Anyone can start a scholarship.