Setting up a scholarship fund can be a great way to give back to your community and create a legacy that endows your philosophies and beliefs into perpetuity. Whether you establish a program with your alma mater, reward those who want to pursue a similar profession as yourself or assist students from your hometown who otherwise wouldn’t be able to finance an education on their own, there are plenty of possibilities.
Creating a scholarship fund may make a large impact on a community for generations, but there are a myriad of options you’ll need to consider before the first recipient ever receives funding.Since there are many legal requirements to comply with, too, it’s important to work closely with a tax advisor and an attorney, who can draft these important documents to create a scholarship fund.
Understand Your Motivation and Goals
“It’s important to understand your motivation for setting up the scholarship,” says Rebecca Bibleheimer, Relationship Manager for the U.S. Bank Charitable Services Group, who administers scholarship programs. “You need to determine if the eligibility standards for the scholarship will have a geographical parameter, if it concentrates on an area of study or if it has other stipulations to meet the goals of your scholarship," Bibleheimer says.
Then ask yourself:
- How will the scholarship be administered?
- Who are the beneficiaries?
- How long do you want this scholarship to last?
- Will income or principle be used to fund the scholarship?
“Whatever you do, you want to be confident that the program you set in place will accomplish the objectives you want to achieve,” says Sally Mullen, Chief Fiduciary Officer of U.S. Bank’s Wealth Management.