Memorializing your loved one with a scholarship is a beautiful way to extend their legacy for years to come.
There are options to fit almost any budget. But for an endowed scholarship awarded indefinitely through a university, you’ll need at least $25,000.
Community foundations or scholarship management services are helpful in doing everything from setting up the fund to administering it.
A tax attorney can advise you on the best way to set up the fund for tax purposes.
If your loved one was an educator, a leader in their field, or just someone who loved learning, honoring them with a memorial scholarship can be an enduring way to keep their memory alive.
A scholarship creates a new legacy for your loved one by funding the education of future scholars whose life’s work will forever be associated with them. It’s not surprising that this is a popular way to honor people who loved their community, because you are giving to them by giving to others.
There are several options for setting up a fund. For instance, you can offer a one-time gift to a student or groups of students, or you can set up a scholarship fund for a specific number of years at a cadence you set. If your loved one was an enthusiastic supporter of their alma mater, setting up an endowed scholarship at that specific university may be your preference.
As you’re beginning to make plans for the fund, there are several things to keep in mind.
The first decision is to determine how much you want to spend.
The option with the highest financial barrier to entry is an endowed scholarship. You’ll generally need at least $25,000 for a scholarship of around $1,000 per year. At this level you can create a scholarship that will live on indefinitely.
For more affordable options, you could also create a one-time gift—even an award in the hundreds of dollars could be a game-changer for a student—or set up an ongoing scholarship fund that fits your budget.
It is helpful to work with a community foundation if you pursue these options. Such a foundation can also help you set up scholarships that are not tied to a particular college, if that’s your preference. (This website can help you find a community foundation in your area.)
Alternatively, there are for-profit scholarship management services that will set up and manage the entire scholarship process for you, for a fee. These third-party administrators are a good option if you’d like to be hands-off, but most cost at least $3,000 to set up and may require ongoing payments.
Finally, if you’re focused on one university or college, keep in mind that many will work with you if you can‘t afford to fund an endowed scholarship. Rather than paying for tuition, some schools allow you to donate gifts that will sponsor students at conferences, seminars, or even study-abroad programs.
Once you have decided how much you want to award, next you’ll decide who this scholarship is for.
As a way to further your loved one’s legacy, you can focus the scholarship in ways that would be meaningful to them: specific areas of study, specific communities, or the area where your loved one grew up.
If your loved one was an arts lover, for example, the scholarship could benefit students pursuing art, music, literature, and theater. If they came from rural Appalachia and ascended to lead boardrooms around the world, you could earmark the funds for students on a similar journey. Perhaps their racial or ethnic identity was meaningful to them. Setting up a scholarship within a specific community would be a resonant way to help students from a similar background.
Make sure to speak to a tax attorney before you set up any scholarship fund. You can structure the fund in several ways: setting up a trust, creating a nonprofit organization, or using your own personal funds each year. Each of these options will have different tax implications.
To create an endowed scholarship at a specific university, contact the school’s development office and they can lead you through their specific process.
For a one-time or ongoing scholarship fund, the simplest ways to register your fund are through a community foundation or with the help of a scholarship management service.
You’ll want to map out a specific and rigorous selection process: required submission documents, deadlines, interviews, and the date on which you’ll announce the winner or winners.
In addition, make sure to create bylaws and standards to clearly define who is eligible. Common criteria could be: grade-point average, academic accomplishments, need, athletic ability, or creative talent. The criteria should be nondiscriminatory—so you’ll want to check the government guidelines to make sure you’re following legal requirements for scholarship programs.
Often it is helpful to form a committee (or just enlist the help of some friends) to vet the applications and identify the top applicants. Splitting the work up makes the job easier, but it is also helpful in removing any inconsistency—or perceived bias—in the review process.
Make sure to give yourself plenty of time between the application deadline and the date to name the recipient of your loved one’s scholarship. After all, the recipient will be getting a boost that will help them achieve their ambitions. Whose talents, potential, and vision are most worthy of your support? Finding just the right fit is worth some extra reflection.
Of course, finding a legacy bearer for your loved one is also a way to connect with their memory on a regular basis—whether that’s just once, or once a year. Whether you’re choosing the recipient, awarding the scholarship, or watching these investments in students yield real-life results, your loved one and the values they stood for can come alive again through this memorial scholarship. Not only is it a way to add to your loved one’s legacy, it is a simple but profound way to make the world a better place, one small action at a time ●
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