Starting Scholarship Program

Parent Cafe
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<p>My husband is 40 yrs old and still owes $20K in student loans. We have two boys, 12 yrs & 1 yr. I'm anticipating to still be paying on my husband's student loans when our oldest starts college.</p>

<p>My idea: I'd love to start my own scholarship program to help kids pay for college. I would have some scholarships based on merit and some based on need. The amount of the scholarships are yet to be determined.</p>

<p>My question: Do you think people who value the importance of a college education would be willing to donate to this kind of scholarship program? I'm just looking for feedback to judge how hard it would be to get donations from people? Do you think it's a worthwhile cause to contribute to? If so, how much would someone like you contribute to this type of organization? If not, why not?? Pros/Cons/Any feedback is appreciated/For Feasability purposes only. </p>

<p>Obviously I'd make it a non-profit 503c corp so donations would be tax-deductible to the donors. We live in Arizona and there are all kinds of tuition organizations that basically do what I'm talking about.</p>

<p>Just looking for feedback. Thanks.</p>

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<p>I think you would need a “hook” to get people interested in donating. You need to target your applicant pool and your donor base with a compelling story about why you want to fund certain people’s college educations. It also depends on how connected you are to a particular donor base and/or how charismatic you are when asking people for money. But, in order to really get the ball rolling, someone is going to have to be writing some substantial checks and they will need some good motivation to do so. Can it be done? Sure. Good luck.</p>

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<p>There are a couple of ways I’ve seen fundraisers get people interested in contributing $$ for scholarships. You can target a certain group that you are involved with and get the members to fund a scholarship (the Elks, local VFW post, Kiwanas, etc.). Or you can try for a memorial scholarship…people can donate in memory of Mr. or Ms. X.</p>

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<p>I’m in the process of setting up a memorial scholarship in honor of my mother. Many small ($25-$100) donations do add up quickly and, as my mom died recently, it did not require any effort over a notice in the newspaper. I don’t want to administer this though and we’re more interested in helping out local kids. So, I’ll turn everything over to our local shool district in the fall and believe we’ll initially have funding for 5-10 years. They award alot of scholarships at graduation and the minimum annual award/scholarship in our district is $500. Some businesses and organizations team up to share a sponsorship. I’m not sure the HS has the ability to determine need but they are able to target the funds, in our case to a student pursuing a degree in education. We did the same when my dad died, but it went to music. I received several scholarships of $500-$1000 when I graduated, did not receive much other financial aid, and was very grateful to have them help pay for books, traveling expenses, etc. instead of having them paid directly to my college for tuition. It enabled me to use most of my earnings for tuition and I ended up with only $8K in student loans after 4 years. I’ve encouraged my daughter and neice to do the same and my neice got a little over $2K in these local awards and a very happy camper!</p>

<p>If you are well known locally, you might network and solicit donations locally. I personally tend to give more if I see that high school kids are involved in the organization or in raising the money. If you want to save yourself alot of ongoing work I would suggest raising money for one of the organizations like Kiwanis, Dollars for Scholars, etc. who already have the mechanics in place and will accept donations. Many larger employers give matching funds for employee contributions and that could help alot. If you really want to get creative, go big, and have a great idea why not do it online? It may take alot of promotion to get it going but I’ve seen people like the “Spare Change” guy (or something like that ) featured on the Today show. Good luck!</p>

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<p>Thanks for all your ideas, suggestions, etc…Keep them coming!!!</p>

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<p>I’ve seen how things work at our local hs where there are a number of local scholarships given to the kids. Our hs has the kids fill out a generic application that details income (a range), among other things. The hs does not do anything to check the info the kids put on the application re family income.</p>

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<p>As others have noted, they would likely be more willing to donate if there was a particular group benefiting or some sort of “hook” of a specific (like some scholarships are for females majoring in engineering, or students majoring in art, etc.).</p>

<p>My son was 9 when he started college part-time and the university had no scholarship money for part-time students, so he felt he’d like to start a scholarship for early college students who are going PT and thus ineligible for regular scholarships unless they switch to FT. He doesn’t plan to make it need based but merit based, and hasn’t mentioned planning to solicit funds from others but rather just bank roll the scholarship fund himself as a mentor of his has done for a scholarship for blind students (which I don’t think he had even heard about when he came up with the PT early college student scholarship notion at age 9).</p>

<p>For a few years now (at least four), our son has been considering applying to an MBA and/or JD program but he is insistent now at applying to only the top 5 schools for each program if he applies to just an MBA or JD program and to only two programs (Harvard and Northwestern) if he applies for the combined program. Most of all of the programs he is considering don’t have merit aid and he likely won’t qualify for need based aid despite his not having the $200+K in tuition going into a combined program will cost or closer to $360+K once living expenses are tossed in for Harvard’s combined 4-year program (not sure what it would be for Northwestern, but likely not much different), and he refuses to take money from us, so I suggested he try selling his photos and fractal art again, as he was able to sell $8K worth with rather little time and effort to raise money for 2004 study abroad programs and I suspect at least some people might view an MBA and/or JD to be a better investment to help someone out with than a study abroad program, but am not sure, as he’ll also have perhaps four degrees by that time (two bcahelor’s, an M.S., and perhaps a Ph.D.) and they might just feel it’s time for him to exit school and get back to the real world (as he was in it earning good money between college and graduate school).</p>

<p>Anyway, let me know what you do to raise funds and how the process goes.</p>

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<p>This will have all sorts of factors involved. To list a few:

  1. How wealthy and more importantly, generous people you know are, and how many people you know and how much they are willing to spread the word about your fund.
  2. How well you advertise your fund.
  3. If you have a good “hook”.
  4. If you have something to offer in exchange for the donation (like selling something or having a dinner/show fundraiser).
  5. How likable the people trying to raise the funds are.</p>

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<p>There are TONS of scholarships people can contribute to, so we can’t give to them all. In the past year, members of our family (meaning me, my husband, and/or our son) have given to the Honors College scholarship fund, Semester at Sea scholarship fund, an arts scholarship fund (that one had a “taste of the town” evening with silent auction with work from local artists followed by a show where the 10 finalists for the scholarship did performances in music, dance, theater, poetry, etc. and those in the audience got to decide who got which amount of scholarship), and likely some others that aren’t coming to mind. We’ve also gone to fundraisers for things we have no personal ties to really, like a dinner dance for our local high school’s Booster Club (despite our son never attending any school before college, we felt we’d like to support the neighborhood high school) and a dinner fundraiser for a horse rehabilitation farm (and nobody in our immediate family rides horses, but it seemed a decent cause to me, so we came out and supported the fund drive).</p>

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<p>At this point in our lives, we’re not big spenders for charities, sadly, but we usually give anywhere from $50 to $150 depending on the cause and if there is anything being given (i.e. an event typically gets more money than just a plea for donations as we realize they have to pay for food, drink, a band, a place to hold the event, whatever).</p>

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<p>I wouldn’t think the paper work and such could be a hassle, and having to pick who wins and who doesn’t. I would also think government audits might be likely/necessary and doubt those to be a lot of fun. And you could come to resent a bit those who don’t support your cause, I am guessing.</p>

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<p>I don’t see why anyone would give to your organization unless they knew you personally. </p>

<p>I think most people willing to give money for college want to tie a few strings to it. Thus, they might want to give to their alma mater, to the local high school, for children of disabled vets, for the children of police and fire fighters killed in the line of duty, for people of a certain faith, for kids in certain activities, e.g., scouting, for people interested in certain careers, e.g., nursing, medicine, performing arts, teaching, etc. There are organizations that do each of these things. </p>

<p>Give money to somebody I don’t know who is trying to start a charitable organization who has no track record? Personally, I wouldn’t do that. That doesn’t mean, of course, that there aren’t other people who would.</p>

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<p>Op= try calling your local United Way or Community chest and get the names of other organizations in town already funding scholarships. They can talk you through what’s involved, how diverse their donor base is, how many hours per week they spend on accounting and legal issues, etc.</p>

<p>I serve on the board of a small foundation. You cannot believe how onerous the reporting requirements are to maintain our tax status. Every year we budget for a moderate increase in audit, reporting and other accounting fees, and every year it goes up by an astronomical amount- as your donor base increases the amount of work required to stay in compliance goes up as well. Donors are very savvy these days about the legalities involved, and we get questions all the time (and answering them is time consuming as well.) They don’t want to be taking deductions for giving to an organization that is not well managed and isn’t in compliance… but the paperwork for even a small organization is truly huge. You will have the added burden of verifying that the dollars you distribute are going to their stated purpose (i.e. real and legitimate colleges, and not bogus diploma mills) as well as making sure that the students who get the money actually enroll.</p>

<p>I think your goal is noble; if it were me, I’d work within an organization that already does this. They’ve got the tax software, they know the law, they’ll have an officer on their board responsible for audit, etc which gets you off the hook.</p>

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<p>There are plenty of merit scholarships there. Tell your kids to study hard, and you will not need to pay for their college. I am amazed at how much $$ people are donating already. I do not know about need based. but I bet there are a lot funds there for need based also. I would focus on helping kids to get their grades so that they will be eligible for merit scholarships.</p>

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<p>My D won a scholarship through the Pennysaver ‘Yes’ awards for a combo of scholarship and community service (not need based). It was kind of cool in that it really was a collection of many individual contributors who used that organization to administer the awards each of them were giving. In many cases the contributors were various local businesses (also included the SD Chargers football team, the military, and many smaller businesses). I think the award level was $3K and the individuals selected the recipients. They put on a very nice breakfast at a large hotel conference room for the winners and presented the awards. The recipients and parents sat at the table with the contributor who selected them. Each contributor had their own criteria for making the selection but I assume the organization had some minimal set of rules. </p>

<p>The organization lends credibility to contibutors. In the above case each contributor contributed the full amount ($3K) and was involved in the selection and awarding of the recipient. </p>

<p>It was enough to make me consider starting up a similar scholarship someday (maybe when no kids are left in college) but probably would use something like this organization to administer it. </p>

<p>I don’t know about an individual starting up their own scholarship and seeking contibutions from individuals in smaller denominations. Frankly, I wouldn’t contribute to a fund like this since I’m the sceptical type and would be concerned about it’s viability (past experience with a GS cookie mom stealing the cookie money of all things). I imagine others not acquainted with you would have similar concerns. Why not just work through one of the established organizations, such as I described above or a local HS, to administer it, or contribute to Elks, VFW, etc.?</p>

<p>As an individual who might be willing to contribute I’d have a choice of contributing either directly (through the HS or the aforementioned similar org), to an established charity for this purpose (Elks, etc.) or to an individual I’ve never heard of (i.e. you). I probably wouldn’t pick the latter to dispense my money.</p>

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<p>Within the last few years the IRS has been seriously cracking down on scholarship funds. They are trying to find those funds started by wealthy individuals who set up a scholarship fund, take the tax write off, then give their kids scholarships. People funding the scholarships are no long allowed to make the determination who gets the money. As a previous poster mentioned there is a tremendous amount of adminstration that goes into a non-profit/foundation/scholarship on top of raising the money.</p>

<p>Not sure what the OP’s motivation for starting a scholarship fund is, but my recommendation is to find an existing fund that meets your goals and volunteer for it for a few years, then decide whether you want to start from ground zero. Maybe your energy would go further by raising money or awareness of existing scholarships in your community.</p>