If an outside scholarship says you “must have need” and the student has already executed on a solid merit aid/financial safety school strategy, I’d go ahead and apply and see what happens (unless family income is ridiculous – like 300k+ with one child. Then you’re just not going to win no matter what.) Some scholarships are more lenient than others. Elks and JKCF just won’t tolerate upper middle class or high income applicants. Some others may, though; Burger King prioritizes work experience for the top award, and many subject-based (women in tech) scholarships are – beyond the initial application requirements (ie be a woman in tech) strictly merit. The problem with these is that they tend to be small and non-renewable. But, still, potential book money.
The JKCF College Scholarship is relatively new (2 years); the foundation ran the competition for their own Young Scholars for years, but it was only recently opened for public applications (to allow students who wouldn’t have known about the Young Scholars program in middle school to apply). This year they chose 50 College Scholars from an outside pool of applicants (I was one of them), and 44 came from the Young Scholars pipeline. The good thing about this scholarship is, if you fit into the application requirements to begin with – ie make less than 95k a year gross, have a GPA above 3.5, and have standardized test scores on the SAT or ACT in the top 15% – then you have a decent shot. The applicant pool is relatively small compared to most national programs (this year ~1800 “qualified” students applied), and my impression is that they don’t weight community service or extracurricular activities very heavily (since lower income students are less likely to have the chance to be engaged in them). Likewise, financial situation and other family hardships (divorce, immigration, etc) seem to be weighted very heavily. Much like with Gates, you also have to write a mini-thesis (thousands and thousands of words) to apply to JKCF, so that weeds out a ton of students; you’ll have a decent shot if you’re a good writer.
Tl;dr for JKCF – if you fit within those three requirements, consider applying. My family’s AGI is more than double the scholar average, but it still worked out.