Simple Steps for Starting Your Own Scholarship

Starting a ScholarshipAccording to the most recent survey from the National Center for Education Statistics (NCES), only 12.8 percent of all undergraduate students receive a private scholarship. For a student seeking free money for college, those numbers do not provide much encouragement. The simple fact is that there are more students seeking financial assistance than ever before, but not enough programs to help meet the demand. Fortunately, many civic groups, companies, and even private citizens are stepping up by starting their own scholarship programs. It’s really not that difficult and you don’t have to be a billionaire, either; it just takes a desire to help students attain their dream of a college education and a few simple steps to get the ball rolling.

1Find the Funding

How will you cover the expenses for managing the program and disbursing the scholarship funds? There are many options to consider, such as setting up a trust, creating a non-profit organization, or using your own personal funds. It’s a good idea to speak with a tax expert before making a final decision to determine any tax liabilities you may have under these options.

2Establish a Budget

Creating a scholarship takes a bit more than handing out money to deserving students. Even if you decide to create a program as an individual, you will need to cover the costs of managing and promoting your program (paper applications, online, website maintenance, etc.), and ultimately, awarding the scholarship prize(s). Once you understand all the expenses involved, you’ll have a better idea of how much money you can give to students.

3Determine the Criteria

Scholarships can be awarded based on merit (grades), need (income), athletic ability, skills, creative content, and more. Keep in mind that the criteria should be objective and nondiscriminatory, allowing for the recipient(s) to be selected from a group broad enough to be considered a charitable class. You will also need to check with state, federal, and IRS guidelines to ensure your program adheres to all legal requirements governing scholarship programs.

4Create the Application

Depending on your preference, you may want to work with an online or paper application (or both). Many students spend their time online, so an electronic application can expedite the process and save students the expense of printing paper and paying for postage. Keep in mind that long applications may discourage students from applying, so try to keep it short and to the point.

5Set the Deadline

The majority of scholarships have deadlines in the spring (January through May), but that doesn’t mean you can’t establish a summer, fall, or winter deadline. You will want to have a minimum of 60 days or more to promote your program and another six to eight weeks to select your recipient(s), so planning ahead is very important. Just be sure you give your intended applicants plenty of time to review, prepare, and apply for the award.

6Select the Winner(s)

It’s a good idea to create a grading rubric (1-10, A-F, or other scale), as this will ensure consistency among the reviewers and provide evidence that you enlisted specific criteria when selecting your winner. Scholarship committees often use online collaboration tools, in-person meetings, or Excel files to help grade applications and discuss possible contenders/winners. Once the winner is chosen, he/she should be notified by certified mail, email, and/or phone.

7Award the Scholarship

To ensure the funds are used for educational expenses, it is a good idea to disburse your scholarship funds directly to the school and not the student. Be sure to indicate how the funds may be used, as this may have a direct effect on the student’s financial aid received from his/her institution. To minimize the possibility of a student having his/her aid reduced, consider authorizing the use of your award for any educational expenses and not restricting it to tuition only.

If you find the idea of starting a scholarship program enticing, but a little intimidating, I have some great news – you don’t have to go through this process alone. There are many organizations that now help people create and manage scholarship programs, whether it’s a large program or a small community award. One of the easiest and most affordable is the Scholarship Application Management System (SAMS) offered by ScholarshipExperts.com. You can check out their demo or contact info@scholarshipexperts.com to find out more about the services they provide. In a few short weeks, your scholarship program could be a reality!

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About

Tamara is the Social Media Coordinator and a regular writer for ScholarshipExperts.com, eStudentLoan.com and CampusDiscovery.com. She enjoys helping students prepare for college. As a mother of four, Tamara has first-hand experience with many areas of education, including special needs (autism), the International Baccalaureate program and post-secondary education. She enjoys speaking at schools and mentoring others online. In her free time, Tamara enjoys volunteering and supporting her favorite football team, the Jacksonville Jaguars.
20 Responses to “Simple Steps for Starting Your Own Scholarship”
  1. Nadege Conger says:

    Hello Tamara,

    We are a business as opposed to a non-profit or foundation and would like to set up a travel scholarship for us-based PHDs. Can you help us?

  2. AMF says:

    I am an individual and I would like to start a nonprofit scholarship fund for college students in the Democratic Republic of Congo, Africa. I can’t seem to come across anything on the internet that that has vital information on nonprofit organization dealing with distributing scholarship funds abroad. Any suggestions?

    • Tamara Krause says:

      You may want to contact the Department of Education (or something similar) in the Congo to see what steps are required to set up a fund for students in that area, especially if the funds will not be restricted to study in the United States.

  3. Olga says:

    Hi Tamara,
    Can my brother-in law create a scholarship to help my daughter to pay her graduate college, Law school?

    • Tamara Krause says:

      Unfortunately, scholarship programs cannot be created to help a specific person. He could, however, provide her with a low-interest student loan or gift, if he has the funds to assist her financially.

  4. Lesley Sanderspree says:

    Hello,
    Do small scholarships, say $1000 and under, affect a student’s Pell grants or other student loans they may need to get?
    Thank you.

    • Tamara Krause says:

      Great question Lesley. It depends on what amount your school has determined as your cost of attendance (COA). You cannot receive financial aid above that number, so if you earn a scholarship that puts you over your limit, your school may reduce your student loans or other institutional aid by the amount of your scholarship.

  5. Clay says:

    Hi Tamara

    Great article and most appreciated. My wife and I have started a mentoring and consulting company that provides college and career readiness services for students. We would like to provide a scholarship for student that finish our annual program. Does this sound like something you could help us with?

    Thanks

  6. kayla says:

    Hi I like the article.I want to start my own scholarship but I didnt know where to start and this helped out a lot but I still have a few questions.

    1.how long does scholasrship provide for? is it the amount you give for every semester their in school?

    2.Can you get sponcers to support your scholarship?

    • Tamara Krause says:

      Hi Kayla,

      Every scholarship is different. Some provide funding for one academic year (paid in one sum or over several semesters) and others are renewable, allowing students to receive the funding for several years. The majority of private scholarships are sponsored by businesses, organizations and individuals. If, however, you are a student seeking a scholarship to help fund your own education, you may want to try crowdfunding, as you cannot legally set up a scholarship to benefit yourself.

  7. Alice says:

    I’m a first year undergraduate student at one of the top universities in London. In my home country, the Netherlands, education is practically free. In the UK, it is almost unaffordable for those who come from a working-class background. I would love to start a scholarship to help those in England through fundraising. However, the information on the UK is scarce. Do you have any suggestions?

    • Tamara Krause says:

      You might try looking into a crowdfunding site like GoFundMe.com or checking with other scholarship providers in your area to see how they set up their programs. I don’t have much expertise with non-U.S. based programs. Sorry.

  8. Nikki says:

    Hi Tamara, I’d like to set up a scholarship at my alma mater to help fund those in my major (Speech-Language Pathology) because there weren’t a lot of scholarships for my major when I was in school. I’d like to fund them personally. What do I have to do for this?

    • Tamara Krause says:

      I would suggest contacting your college’s financial aid director. He or she will be able to guide you through the process.

  9. charles says:

    To help offset the administrative costs of running and maintaining a scholarship program, is it legal to require a minimal application fee for applicants?

    • Tamara Krause says:

      Although it is legal, I would advise against it. The majority of people in the financial aid business believe that free money (scholarships) should be free. In fact, most experts warn students to stay away from programs that charge students a fee to apply. If you do impose a fee, you should include the reasoning for the fee on your website and on the application.

  10. Teresa says:

    I would like to setup a scholarship fund for “food” for college students from my community. Is this something that am able to do! The amount would be low. Is this considered as a scholarship or should I take another direction for this type of funding. Or, can I give out schloarships for $100.00? Please share your advice

    Thanks,
    Teresa

    • Tamara Krause says:

      You can give out a scholarship for $100, but I would suggest partnering with a local college to set up a fund to help those students who may need the assistance. Many schools are starting programs for students who cannot afford meal plans or find themselves going hungry several times a week. Although these programs typically partner with a local food bank, I’m sure a school would be grateful for any additional assistance to help those in need.

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