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Want to know how to start a scholarship fund? Setting up a scholarship fund essentially breaks down into 8 simple steps. Some of these steps you can easily do yourself. Other items may require help!
Creating a scholarship fund takes a bit more than handing out money to deserving students. You will need to think about additional costs.
Costs include setting up the program, keeping track of applicants as well as promoting the scholarship, and awarding the scholarship. Once you understand all the expenses involved, you’ll have a better idea of how much money you can give to students. You may choose to work with a scholarship management service. They will take care of all the administration for you, usually for a small fee.
You could also download Our Ultimate Guide to Starting a Scholarship e-book.
Next, you will need to determine how will you cover the expenses for managing the program. There are many options to consider.
You may set up a trust, create a nonprofit organization, or use your own personal funds. It’s a good idea to speak with a tax expert before making a final decision. Each option may have different tax implications. A scholarship management service should not advise you on tax advise as each situation is different!
There are so many students in need of scholarships! According to a Sallie Mae How America Pays for College report, families spent an average of $30,017 on college in the 2019 to 2020 academic year. That’s nearly half of the average household income! Furthermore, seven in ten families used scholarships or grants to help pay for college. When you’re establishing the criteria for your scholarship, think about various attributes.
Common awards would include merit, need, athletic ability, skills, creative content, and more. The criteria should be nondiscriminatory. This allows recipient(s) to be selected from a group broad enough to be considered a charitable class. Also, check government guidelines. You need to ensure your program follows all legal requirements for scholarship programs.
After you have confirmed the legal requirements, you will need to define the rules of your scholarship. These rules need to be available for students to easily find. They should include (but are not limited to) aspects such as eligibility and timing. Next, set up your application. Depending on your preference, you may want to work with an online or paper application (or both). Running your application online only may have many advantages.
When creating the application, also keep in mind the length. Long applications may discourage students from applying. So try to keep it short and to the point.
The majority of scholarships have deadlines in the spring (January through May). But that doesn’t mean you can’t establish a summer, fall, or winter deadline. You will want to have at least 60 days or more to promote your program (we recommend 6 months). Then another six to eight weeks to select your recipient(s), so planning ahead is very important. Be sure you give your intended applicants plenty of time to review, prepare, and apply for the award.
After you start a scholarship fund, you need to promote it! There are many ways to promote your scholarship. If you plan to award your scholarship locally, talk to your city hall and high school. They should be able to get the word out for you. If you are looking for broader exposure, you will want to get your scholarship posted to sites like ours! Unigo offers both free listing of your scholarship, paid promotions of scholarship programs, and full management and administration of scholarship programs. For additional information about how Unigo can help your organization promote or manage your scholarship initiatives, please contact us here.
When selecting a winner, it is important to judge everyone on the same scale! One way to do that is to create a grading rubric (1-10, A-F, or another scale). This will ensure consistency among the reviewers. It will also provide evidence that you used specific criteria when selecting your winner. Once the winner is chosen, he/she should be notified by certified mail, email, and/or phone.
Scholarships must be used for educational expenses. It is a good idea to disburse your scholarship funds to the school and not the student. When you do so, be sure to state how the funds can be used. This may have a direct effect on the student’s financial aid received from his/her institution. Also consider allowing the scholarship to cover any educational expense, not just tuition. This may reduce the possibility of a student having their aid reduced. You may also need to keep track of the scholarship over time. Not all students are ready to redeem the scholarship once it has been awarded.
While the steps to start a scholarship fund are not hard, the time involved in running the scholarship may be more than you are able to commit. There are also many details that are important and do not want to miss! At Unigo, scholarships are what we do. We are proud to offer scholarship management services to companies of all sizes. We are able to relieve that internal administrative burden and ensure that students are aware of your award.
Our scholarship management services are 100% customized. We work with you to create a custom scholarship fund program that meets your organization’s goals. This includes the overall cost of the program and the speed at which we can get the program up and running. Once the program details are finalized, we can launch a new program in under two weeks. What we can offer you:
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