You can help a bright student by starting a scholarship fund. Scholarship funds are usually initiated by the colleges where the students study or by foundations, such as non-profit organizations. Although people set scholarship funds up for many different reasons, the primary motive to grant scholarships is to help kids achieve educational goals. Scholarship funds are raised only for those students who are bright, studious, and need money to study further.
Find Your Reason Or Inspiration
Even individuals, someone like you, can start setting up a scholarship fund. Starting a scholarship is both an exciting and rewarding experience. You will actually help a student turn his dreams into reality. You can be that life-changing financial aid to an underprivileged aspirant. There is no restriction as to who should you choose to help. The choice is yours. You could select a student from your own community, someone who shares the interest and dreams you had, someone from a very low-income background or a student with a disability.
You could start a scholarship fund to honor someone or in someone’s memory. You can make your scholarship an individual project or join with your company to raise funds as a part of organizational social responsibility. You have to figure out why and for whom. That being said, if you are on this page now, it means you have already decided to raise funds for someone and you would like to know the process behind it.
Process Steps For Starting A Scholarship Fund
Step 1: Determine Your Purpose
Identify the reason for it. If you have already identified your purpose for scholarship awarding, skip to the next step. In order to establish a successful educational scholarship fund, you need to name your fund and identify a potential student group. Some of the common reasons (that you may like to ponder) for which people usually start educational fund include:
- Providing financial aid to students in a particular field, such as social work, medicine, engineering, etc.
- Providing funds to students studying in a particular school, village, area, or community
- Providing funds to students who excel in sports
- Awarding brilliant minded students with low-income parents
- Providing funds for your house-help’s children
- Awarding students who have made a difference in society through community work
- Awarding students with special abilities
- Student Funding for people who want to overcome personal hardships
- Starting a scholarship fund in memory of a loved one in his/her name
- Raising education fund based on caste, creed, ethnic, cultural background, gender, or geographic region
You will have to set criteria to review applications. For instance, you decide to provide the scholarship to high school students with financial need intending to graduate in visual communication. You have to decide on what basis you will grant the scholarship – will you decide on the level of financial need? Or decide on academic performance? Or award to only those students who have shown good results in visual communication?
Step 2: Plan The Scholarship Fund Process
You have to thoroughly plan the process of an educational scholarship. Planning should include setting the timeline for the program and figuring out the scholarship fund. You also have to determine the duration of the award. Let us go through this one by one:
- Set the timeline for the scholarship, as in when would you want to award it (before summer or after), and based on it you will have to plan it. Factors that you should consider include program development, fundraising, marketing, application evaluation, and awarding the right candidates.
- Chart out the figures, as in how many students will receive the fund per year? What should be the price of the award? What should be the process for application, as in, eligibility, age, academic scores etc.? How will students apply; online or register at your chosen office? How will you award the price, in installment or at one go?
- Find out if this is going to be a one-time award or will you fund the same student until they graduate.You could offer a substantial one-time award or offer multiple support, or choose both based on your review process. The type of award cycle is totally your choice. However, you have to keep your financial abilities in focus while planning the cycle.
Step 3: Write Down Your Scholarship Terms
Before you begin processing the funds, write down the terms and conditions of your scholarship fund program. It is a good idea to specify the criteria for the scholarship, application process, deadlines, and the amount to be awarded. You must elaborately discuss the points mentioned in step 2 in your terms so that people don’t claim anything unnecessary. While determining the amount, we suggest that you leave the figures open. This will give flexibility in determining the number of students to award each year.
Step 4: Funding The Scholarship
Funding is a very crucial factor that determines the success or failure of your program. You may want to think about it even before you process the first three steps. Like we mentioned earlier, you can fund the scholarship from your own pockets or take help from your company, community, or individuals. There are numerous such programs already thriving now.
If your terms have it, your donors will be able to enjoy tax benefits for making a yearly contribution to your scholarship. Financial terms and aspects could be tricky if you do not know about it in depth. Consulting an accountant or a financial advisor can make your work simple and easy.
Step 5: Ways To Raise The Fund
If you have financial constraints to fund the scholarship all alone, you will need to do some fundraising for additional aid. The only way to raise funds is by finding suitable donors and asking them to donate. If you are working in a corporate, you can get the help of the employees and managers there and make this a corporate social responsibility project. You can ask your friends, relatives, and their friends to donate for your supporting cause, or you can do fundraising events, or try online crowdfunding.
If you are using a memorial scholarship, family funds or personal funds can be used.
In the beginning, you will be doing this on your own. Make a list of potential donors, such as big and medium-sized businesses, community organizations, and individuals in your society. Draft a mail, a flyer, or a letter to let these people know about your initiation and the purpose behind it.
One of the best ways to raise funds today is to create a website and share the details with people and on the social media platform. On the other hand, you could host events to raise funds for your scholarship program. Some of the common and result driven events include:
- Crowdfunding campaigns
- Promotional offers (donors will get 20% off on restaurant or a free meal at a restaurant)
- Events, such as raffles with an entry token and a prize for the winner
- Game night or a party where participants donate money to enter
- Food sales (bake or cook items and sell. Earned money will be donated)
Step 6: Know About Endowed Fund
There is a one-time award scholarship and there is multiple-year support until funding is depleted. We know about these two types of scholarship funding. There is another type which you can consider applying – endowed fund. In this case, a fairly large amount or a lump-sum donation is set aside as a principal balance. Then the amount is invested in shares and stocks. The interest earned is drawn and awarded as a scholarship. The balance interest can be reinvested and the principal amount will be used to award future programs.
Now the risky part is investing. In order to earn good money, you must talk to a trusted broker and build a good investment plan. Also, the principal amount should literally be huge. For instance, if you aim for a scholarship fund of $1000 a year, you will at least need $20,000 – $25,000 for the endowment.
Apart from an investment broker, you will also need to consult a tax advisor on the restrictions and tax filings, and an advisory board to help you with investment ideas and financial planning.
Keep in mind that scholarships are tax deductible. You have to follow the guidelines and meet all tax requirements to sustain and run the fund successfully.
Step 7: Choose The Criteria For Deserving Candidates
We have mentioned this earlier in our process steps. Let us talk about it in detail. When you start advertising for your scholarship, you will indefinitely have many applicants filling in. However, you will have to set parameters to evaluate and review the applications to identify the most deserving candidates. It is not required that you must fund a certain number of students each year. The numbers of deserving candidates may vary with each year. That is why it is important that you set criteria and save your money for the greater good.
Based on the purpose of your scholarship, the criteria will vary. However, some of the common ones we could think of include:
- Academic performance (in terms of grade, test scores, discipline, and success in the chosen subject such as sports, music, dance, drama, arts, cooking, painting, etc.)
- Financial need
- Leadership and managerial skills (can be evaluated through the interview)
- Writing skills (can be evaluated by an application essay)
- Passion for further studies (can be evaluated through the interview)
- Work history
Step 8: Hire An Administrator
Screening, reviewing, interviewing, and developing customized programs can be a tedious and lengthy process. If you are running a company or working full-time, you may not be able to do the work all alone. It becomes important to select a scholarship administrator to assist you in this. Now, you can delegate the administrative work in a few efficient ways, namely:
- Establish board members (could be friends, family, business associates or colleagues)
- Use an outsourced scholarship administrative service. These professional experts do all the work, from screening to selecting to even promoting and raising funds for a certain percentage.
- Request the chosen school administrators to manage the scholarship program.
- Ask external volunteers to join hands. These volunteers may change year to year.
Step 9: Planning The Application Process
Getting students to apply for a scholarship and making an award includes lots of planning. You have to find answers for the following questions to complete the process:
- When and where applications will be available?
- Who will collect the applications or where will it be sent?
- What is the deadline for submitting an application?
- What will the application form include?
- Who will screen, review, and select the students?
- How will you inform the selected students?
- Where and when will the awards be distributed?
- How will the awards be distributed?
To make this process easier, you should consider building a website for application and for donation. Add application form and donation link so that respective people can access it. Send the website link to students so that they can apply it online. You can share the link on your social media sites to appeal to donors. A website will help you receive and review the applications online and keep a track of the funds collected systematically.
Application Form Should Include:
- Contact details
- Parent’s information (Income, Job, etc.)
- An essay to be written on a topic chosen by you
- List of academic and extra-curricular awards and achievements
- Copies of mark sheets and conduct certificate
- Recommendation letters from teachers, advisors, or parent’s employers
Step 10: Advertise Your Scholarship Program
High schools and colleges are the best places to promote your scholarship. They can advertise via mail, flyers, email, or talk directly to students. On the other hand, social media can be a huge help not only to reach high school students but also to donors and influencers. Church gathering, community events, student workplaces are few other places where you can advertise.
If your scholarship is a continuous program, periodically review it to check its financial health and effectiveness. Make sure the students are using the money properly. An annual inspection can help you find this out. Hope you find success in your venture. Let us know in the comments below if you require additional help.