3 Steps to Establish a Scholarship

Establishing a scholarship fund is easier than you might think. Our knowledgeable staff will meet with you, discuss your goals for the fund and help you navigate the three steps found below.

Step 1: Determine How You Will Establish the Scholarship Fund

The first step is to determine whether you would like to establish an “endowed” scholarship from the outset or if you prefer to “build to endowment” over a three-year period.

Endowed Scholarship

Endowed scholarship funds are designed to be permanent and perpetual and can be created with gifts totaling a minimum amount of $15,000. Funds are contributed in full at the outset. The principal of the fund is invested to produce income, and an annual award is made to a student(s). The principal remains untouched, so the endowment can last into perpetuity.

Note: There is currently a 4.5% spending policy, so a fund with a balance of $15,000 would yield at least a $500 scholarship…a fund with a balance of $25,000 would yield at least a $1,000 scholarship -or- two $500 scholarships. The principle will remain intact and earnings above the 4.5% are applied to the principle. Subsequent gifts to the scholarship are also applied to the principle. As the principle grows, so may the amount and/or number of awards.

Building to Endowment – Seed Fund

A second option allows you to build the scholarship to the $15,000 endowment level over a period of three years. A $1,000 minimum gift is required to establish a Seed Fund.  A funding plan must also be submitted at the time the Seed Fund is established that includes a detailed, reasonable approach to raising the required fund minimum by a specific date that is no more than three years from the date the fund is established.  Distributions will not be made from the fund until the fund minimum is reached.

Step 2: Establish Scholarship Criteria

As a scholarship donor, you choose the name of the scholarship as well as the criteria. Scholarships may be awarded to deserving students based upon area of interest, school, geographical origin, leadership potential, merit, financial need, academic achievement and/or other criteria of your choosing. CLICK HERE to view list of Existing Scholarships (click on different scholarship funds to see samples of various criteria).

Step 3: Administration of Scholarship Funds

Applications for Community Foundation scholarships are made available February 1st of each year and are due to our office by April 1st. You (or your designees) may serve on the selection committee provided that certain criteria are met. You (or your designee) are notified annually when the scholarship recipient(s) has been selected and are informed of the name and hometown of the recipient, as well as the amount of the award. Recipients often write a thank-you note to the donor, and in some cases, the recipient and donor are able to meet.