Scholarship Funds

Companies, organizations, families, or individuals can establish scholarship funds. Often such funds memorialize a loved one or honor a special person. Scholarship funds are popular with donors who wish to provide educational opportunities and assistance to students in our area. Scholarship funds require a higher minimum contribution to create than do other Foundation funds in order that the annual award that they distribute is one that is meaningful in size relative to the current costs of higher education.

The Role of the Donor

• Open a scholarship fund with a contribution valued at $20,000 or more.
• Name the fund.
• Work with the Foundation?s staff, establishing the criteria for the type of the award and publicizing the fund as desired.
• Take a tax deduction at the time the gift is made.
• The Donor (or his/her representative) may participate in the annual awards programs of the institution that is associated with the award (if the institution has such a program, the Foundation cannot require a ceremony of a school).

The Role of the Foundation

• Oversee the selection process for the award in accordance with Internal Revenue Service and other legal and tax requirements.
• Verify student registration information and process scholarship payments.
• Send acknowledgements to donors to the fund.
• Manage the fund, oversee its investment, and maintain fund records.
• File federal and state tax returns and provide an annual independent audit.
• Issue financial reports on the fund to the donor.

Considerations when establishing a scholarship fund:

• There are many different considerations related to scholarship funds and the staff will work closely with the donor to meet those considerations in the most fitting manner for the donor?s interests as well as to suit all IRS, legal and other requirements of scholarship funds.

Are there any other considerations?

An individual or organization which places a fund in the Community Foundation gives up control of these funds. They are no longer assets of the individual or the organization; but instead, fall under the ultimate authority of the Foundation?s governing board. Although the funds will be permanently committed to the purposes outlined at the time of the fund?s establishment, the individual or organization can not be directly involved in management of the asset or its investment.