Use your financial skills and charitable intent to develop a student scholarship fund
With the continually rising cost of college tuition, the need for scholarships to fund education is also growing. And if you want to help a needy student (or students!), it’s easier than you think.
Here’s how you can create and fund your own scholarship:
Think about money and management. You’ll need to determine how much you can afford to give away as the base scholarship amount and how you’ll continue funding the scholarship each year. A financial planner can help you with that part. You can also explore other avenues of fundraising such as crowdsourcing, proceeds from auctions and raffles, and identifying other donors who might like to contribute. Additionally, you’ll need to think about whether you want to run the scholarship fund yourself or hire someone to do it for you.
FinAid has a list of scholarship management organizations to choose from. Scroll down to “Scholarship Management Organizations” on their website for more details. One of these sources can also help you figure out the costs to run the fund, advertise the scholarship, and administer the funds to selected recipients.
Know the laws. The IRS has laws for the distribution of nontaxable grants or scholarships. Basically, the money must be given on a nondiscriminatory basis, and it must be used to achieve a specific objective.
Create a procedure for awarding the scholarship. You will also need to decide who will benefit from your dollars, what the application procedure will be, and how the recipient(s) will be awarded the money. Are you interested in funding students pursuing your own field of study? Those purely in financial need? Or both? And do you want to award the money directly to the student(s) or send it to the university so you’re sure it will be applied to the direct costs of education?
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