How to Start a Scholarship Fund in 2021: Is it Worth the Effort?
Is starting a scholarship fund worth the effort?
It depends. Setting up a scholarship does not need to be overwhelming or time-consuming. You can set up a scholarship fund within a week in a few simple steps.
You can do most of these steps on your own, but it’s easiest to work with a trusted scholarship management service, which will help you avoid costly mistakes in the process.
In the end, creating a scholarship or grant is worth it for most people. That’s because giving a scholarship to a deserving student is one of the most rewarding forms of giving back that you can do.
Start a scholarship fund in 9 simple steps.
- Decide who you want to help.
- Determine your budget.
- Set your scholarship program deadlines.
- Choose a scholarship management service.
- Set up your scholarship program.
- Promote your scholarship.
- Choose your winners.
- Award the scholarship.
- End or renew the scholarship.
📍Summary: In the article below, I share a simple process that you can use to create a tax-deductible scholarship or grant within a week. I’ve personally used this process to create more than a dozen scholarships. If you want to get started immediately and have someone guide you through the process at no cost, you can work with Bold.org.
1. Decide who you want to help.
The first step to starting a scholarship is thinking about who you want your grant to help. In general, start by choosing a group of people who you genuinely want to help. You can help students who are like a younger version of yourself, who are in underrepresented communities, who are working on causes you care about, or who represent values that you find important.
Choosing a group that resonates with you will help you enjoy the process. For example, I’ve created scholarships for:
- Elevate Black Entrepreneurs: To support an underrepresented community in my field.
- Financial Freedom Scholarship: To help people become more financially literate.
- Life Reimagined First-Gen Scholarship: To help low-income students like my younger self.
- Elevate Mental Health Awareness: A memorial scholarship to honor my mom.
There is no “right” answer to what your scholarship program is about and who it is for. Scholarships are awesome because you can customize and personalize the specific criteria for the grants in ways that resonate with you. Many people, for example, establish memorial scholarships to honor loved ones.
Once you’ve decided on who to help, you need to think about your budget.
2. Determine your budget.
There is a common misconception that you need to create scholarships or grants starting at $20,000 to $25,000 to have an impact. This idea is wrong and stops many people from creating scholarships. The reality is that you can start a scholarship for as little as $500, and that amount is incredibly meaningful to a student in need.
When thinking about your budget, ask yourself: How much money do you want to give and how often? For example, I decided early on that I want to give ~$5,000 per year through scholarships. Keep in mind that if you set up a scholarship correctly, all of your donations are tax-deductible.
When starting my first scholarship program, I chose a $1,000 award. That way, I could test if I liked giving scholarships. I now have nearly 10 scholarships, all of which award $500-$2,000 every year or every 6 months.
You can also increase your grant by sharing it with friends, family members, and your network. There are platforms that make it very easy for people to donate.
3. Set your scholaship program deadlines.
With your scholarship idea and budget decided, you need to think about when you want to award the scholarship. A good rule of thumb is to keep your scholarship open for 3-6 months to ensure that you allow students the time to apply and have a competitive applicant pool.
Many people wonder if they should award scholarships during a specific time of the year to align with when students are paying tuition. The reality is that students apply to scholarships and grants all year round, and there is no “best” time for awarding the funds. So pick any date, and it will work out.
4. Choose your scholarship management service.
Once you have an idea about who your scholarship program is for and how much you want to give, you can begin the scholarship creation process. This part is where most people run into trouble. If you’ve never done it before, you have many questions:
- Should I start a non-profit?
- How do I raise funds?
- How will I find students?
- How do I manage applications?
- Are there legal considerations?
This point in the process can be overwhelming, and many people give up here. Thankfully, you don’t need to create a nonprofit or do everything on your own. There are platforms built for creating scholarships that take care of the logistical and administrative work for you.
By far, the best platform for creating and managing your scholarship is Bold.org. Bold is a platform that helps everyday people create scholarships with ease. It’s also the most popular platform for anyone who wants to create a memorial scholarship.
With Bold, you can:
- Set a tax-deductible scholarship, grants, or fellowships for free.
- Customize your scholaship criteria for what resonates most.
- Get help in turning your idea into a well-crafted narrative.
- Have a dedicated scholarship page where friends and family can contribute funds.
- Get all of your questions answered by a team that sets up scholarships for a living.
- Access to hundreds of thousands of students who can apply to your scholarship.
- Get support reviewing and selecting the best applicants.
- Ensure that the funds get to the scholarship recipients.
The best part? Bold.org is completely free for people who want to establish a scholarship. At no cost to you, you can easily navigate the scholarship creation, management, and awarding process. It’s the best scholarship management service by far for anyone who wants to create a scholarship program without any of the hassles.
I’ve run 20 scholarships through Bold.org and I’m so grateful it exists.
5. Set up your scholarship program.
Go to Bold.org and get your scholarship set up on the platform. The site is pretty intuitive, but below are the basic steps in the process. You can get it live in a few days.
1. Create your donor profile.
Go here and select “Create a scholarship fund.” You’ll answer a few basic questions to get your donor profile set up. Verify your email.
2. Submit your scholarship proposal.
Once you’re logged in, you submit a proposal for your scholarship or grant with the rough details. The Bold team will help you clarify everything.
3. Schedule a call.
Bold has you get on a 5-10 minute call with the philanthropy team. They answer all of your questions about the scholarship, process, and platform.
4. Fund your scholarship.
Once your proposal is ready, you fund it. It goes live within an hour. At this point, students can apply, and you can share it with your network to get more donations. You can also spend some time to secure additional scholarship funding if you need to, and Bold.org allows other people to donate to your scholarship program in a tax-deductible way.
6. Promote your scholarship.
Once your scholarship is live, you can start sharing it. This is the fun part.
Bold.org has a database of millions of students, and they promote your scholarship to all of the students who are eligible. This means that you’ll likely get many scholarship applications in the first week.
If you’d like to do additional promotion, consider sharing the scholarship on your social networks, with schools that have students, or with people you know who might be a good fit. It’s very common for people who create memorial scholarships to 5x their initial donation by sharing it with people who may want to contribute.
You can also create pages about the scholarship on your website like I’ve done.
7. Choose your winners.
Once your scholarship announcement date is about 30 days away, you can begin reviewing applicants. What’s helpful about Bold is that their team reviews your applications as they come in and recommend the best candidates based on the quality of the applications and the criteria you set for the scholarship. You receive 10-50 recommended applicants.
So instead of reviewing 1,000 applications, you can review 25 to find a winner. When choosing finalists and a scholarship recipient, look for the future generations of students whose stories resonate with you. The best part about scholarships is that you get to give money directly to someone who you want to help.
8. Award the scholarship.
Once you’ve reviewed applications, you hit “Award Scholarship.” From there, the Bold team will notify the winner and ensure that they receive the funds. You can ask to connect with the winner if you’d like to chat with the person or feature them on your social channels.
9. End or renew the scholarship
If you enjoyed your scholarship, you can renew it with the click of a button. You can also make changes to your scholarship or create new ones for different groups of people. It’s up to you.
Frequently asked questions about how to start scholarship funds
A scholarship fund is a grant that is awarded on an objective and nondiscriminatory basis to a student to pay for their direct educational costs, which include tuition, fees, course-related books, and other related educational expenses. You can set up a tax-deductible scholarship fund for as little as $500, despite many people claiming you need $20,000+ to start.
A scholarship fund is a financial award that is given to a student who exhibits the best application for a scholarship based on the criteria set forth by the scholarship fund. The award is then given to the student to pay for direct educational costs in order to reduce the financial burden of attending an institution of higher learning.
While you can set up scholarship funds for high school students for free with as little as $500, it’s important to know that the student won’t receive the funds until they enroll in a qualified institution of higher learning. Those funds will then be used to pay for their direct educational costs, so it’s best to set up a high school scholarship for high school seniors.
A common misconception is that you need $20-25 thousand to create a scholarship. The reality is that you can start a scholarship for as little as $500 every year if you do it with the right organization.
While setting up your own nonprofit scholarship funds can be a lengthy and expensive process, you can use an existing nonprofit organization that offers scholarship management services (like Bold.org) that allows you to create a scholarship fund for free. With their platform, you can focus on creating a scholarship for a qualified student and not worry about the hassle of starting a nonprofit.
A memorial scholarship fund is one of the best ways to honor and cement the legacy of a loved one that you’ve lost. It’s also a great way to engage friends, family members, and the community in finding ways to support you through the process of loss. The first step is to identify who you want to help and then follow this process for starting the memorial scholarship.
With Bold.org, you can create a scholarship program for as little as $500. You can then share that scholarship with friends, family, and your network to secure additional scholarship funding beyond your personal funds. All of their donations are tax-deductible and go toward directly increasing the award. You can also use platforms like GoFundMe, but they often have fees associated with raising funds.
As long as you set up a scholarship that goes toward paying direct educational costs (tuition, fees, and course-required books, or supplies and equipment) for a student in a qualified charitable class and award the scholarship program on an objective and nondiscriminatory basis, your scholarship is tax-deductible as the donor.
Anyone can start a scholarship fund for students in higher education or non-students to pay down student debt. You do not need to create a nonprofit organization to do so. The best way to start a scholarship is with an organization that facilitates the process for you.
Starting scholarships is the most rewarding form of giving that I’ve encountered. And with the technology available, it’s easier than ever to get started and begin helping people in need.
If it’s your first time, I’d consider using Bold.org because they make the process incredibly easy for you, which allows you to focus on the fun parts.
Finally, as you think about getting started, you can check out these resources for ideas.
- You can check out all of the scholarships I’ve created here for inspiration.
- Learn how to create a memorial scholarship for a loved one here.
- Check out what scholarships other people are creating here.
- If you have any questions, feel free to reach out to me at [email protected].