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.
51 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.

  11. Peg Haden says:

    I have an interest in creating a scholarship fund that helps part-time non-traditional students that struggled in the past, but are looking for a fresh start at college. These students are usually unable to receive a scholarship or pell grant. I would like this fund to be awarded after grades post each semester. $100 per semester hour earning an A for example.

    • Tamara Krause says:

      Hi, Peg. It sounds interesting. I would suggest contacting a college you would like to work with and seeing about setting up a fund. There are many legal issues to consider and you’ll need to determine how much you are willing (or able) to contribute annually.

  12. korena downey says:

    Hi, my name is Korena Downey. I will be going into the fall of 2014 as a Senior. The guidance counselor who was a long term sub. left the anti-bullying committee to me we started it when I was a sophomore. I want more students to be involved in everything we do and I know that most kids will do it if there is more to it like a scholarship that will show that all the time and dedication that they put into the group will pay off. I want to start a scholarship and this will go to the student that participated and makes the most difference along with keeping an average over 75%. I was wondering if you knew if I had to contact someone or exactly how I would come to do this. Thank you for taking your time to read this.

    • Tamara Krause says:

      Hi, Korena. If you plan to give this scholarship out at your high school, I would speak with your school administrators. They can help you determine the criteria, create an application, select winners, and manage the funds. You could also research other national anti-bullying scholarships currently being offered and alert your members to these opportunities.

  13. Olga says:

    Tamara, Thank you for all your advices and comments, were very helpful to me.

  14. August says:

    This was very helpful, thank you for posting and giving feedback!

  15. Cynthia says:

    I have been toying with the idea of setting up a scholarship fund specifically for men and women who are striving to get an education after being rescued from human trafficking. I am not sure if working specifically with a community organization or a specific college would be the best option. I am also open to creating a non-profit. The fund would be personally funded to begin with. Then, who knows, with fund raising efforts, it could grow into something much larger.
    Thanks,

    • Tamara Krause says:

      Sounds interesting. You may want to connect with an organization that already works in this area and partner with it to start your scholarship program.

  16. Sharona says:

    Hi Tamara, I live in NYC and would like to set up a Scholarship Fund or program for male youths that are Juniors or Seniors in high schools going to college. The whole shebang meaning application process, academic excellence, community service and a 4 year plan. Banquet to acknowledge our applicants and announce the winner. Also how high should the scholarships be?

    Thank you

    • Tamara Krause says:

      Hi Sharona. Please take a look at our SAMs information. If you are interested in learning more about the process and our rates for helping you to start a scholarship program, please contact us at info@scholarshipexperts.com and we’ll have a member of our team set up a call. Another option is to reach out to your local Chamber of Commerce and see if they would be interested in helping you set up the program.

  17. Lily says:

    HI Tamara, Our non-profit recreational softball program is looking to set up a Scholarship/Grant program for girls in our community. Our girls ages usually range from 7 yrs to 18yrs. Where do we begin? Any help would be greatly appreciated.

    • Tamara Krause says:

      I would suggest reaching out to your local Chamber of Commerce to see if they can help you get the ball rolling and manage the programs. Many Chambers work with their local schools and non-profit organizations. If other athletic leagues are currently providing scholarships in your area, it might be a good idea to ask for their guidance, as well. Before you begin though, decide how many you will offer, the amount per award, the criteria (grades, income, athletic ability, etc.) and how you will continue to support the program in the long term. I would also suggest feeling out members to see if anyone is interested in serving on the selection committee or helping to manage the program (customer service, promotion of scholarships, organizing packets for the selection committee, disbursement of awards, etc.) once you have everything in place.

  18. Dave Jones says:

    I plan on setting up a $1000 scholarship at my high school for adopted kids (like me). I want to keep it very simple for the applicants (paper only, no tax implications). Is there a site that has exactly what I need to know without taking me everywhere I don’t want to go?

    • Tamara Krause says:

      My suggestion would be to work directly with your high school or your local Chamber of Commerce. Both should be able to help you establsih a fund.

  19. Dominique says:

    Hello I’m interester in starting a scholarship fund in memory of my theater director… I’m currently working on a proposal letter… What well be my next step?

    • Tamara Krause says:

      Hi Dominique. You’ll need to secure funding, create rules/criteria, decide how to market it and have a plan in place to receieve & review applications. I would suggest working with your local Chamber of Commerce or a theater group.

  20. Lena says:

    Hello, Tamara

    I enjoyed your article, it provided much insight. I am part of a group of people from all over the country and some outside the U.S. We wish to set up a neighborhood scholarship fund for children, grandchildren, great-grandchildren, etc. to attend college. Do we have to be in the same state to start this program. The program will be completely nonprofit.

    • Tamara Krause says:

      Hi Lena. If you are seeking a way to give back to students in specific communities, I would suggest working with the local Chamber of Commerce in those cities/towns. Many host/manage scholarship programs for businesses and other organizations, and they may be able to help you set up your programs, as well.

  21. Lydia says:

    I would like to start a small scholarship or award to a special student at for a local high school student who shows compassion, acceptance and inclusion of special needs students. Is there a way to do this without affecting their other aid they may receive? Something small, out of my own money, with an award. Not an educational scholarship, but more of whatever your next step in life may be, whether entering the work force, trade school, or college.

    • Tamara Krause says:

      Students are required to inform their college of any scholarships or grants received. In the case of a small award ($500 or less), there probably won’t be any change in funding. Students may receive financial aid up to the cost of attendance, so unless they have reached this threshold, they should still receive other aid, as well. In some cases, where a student has earned many awards, a college may reduce the student loan amount or reduce an institutional award by the amount of the scholarship award. If you structure it as a contest and give the money directly to the student without any expectation that it must be used for college, the student would not need to include it as a ‘scholarship’ per se, but it then becomes taxable income.

  22. Rachelle says:

    I would like to start a scholarship fund for high school seniors in my hometown located in the state of Tennessee. The scholarship will be an academic-based scholarship based on high school GPA and ACT score. The amount will be $500 to be granted to two high school seniors. I plan to use my own funds starting off, but eventually would like to set it up to where people can donate to the fund. Any suggestions on how to get this started?

    • Tamara Krause says:

      I would speak with the high school administration and your local Chamber of Commerce. Many work together with local businesses and individuals to establish scholarships for area students. Generally, those providing the scholarships are responsible for funding the award. You may want to start a GoFundMe.com campaign to raise the initial/additional capital and have it placed in a trust for future awards.

  23. Jennifer says:

    I just now began looking at funding a scholarship, can I do gofundme to fund a scholarship that I want to give in honor of someone? Is this something that is legal? I am clueless and I wished I started last year since he passed away, and how long is the process to set up a scholarship, send out app, and pick? Can you direct me to right place? Thank you!!

    • Tamara Krause says:

      If this is something you would like to do locally, I encourage you to reach out to your local Chamber of Commerce. Many manage scholarships for area businesses and individuals. Generally, the person or organization establishing the scholarship is responsible for funding the program. If you want this to be a long-term program, look into an area non-profit center than can help you establish a charitable organization and guide you through the steps of fundraising for your program.

  24. Ann Marie McLaughlin says:

    I am part of a “Friends of the Library” group in South Florida. We would like to establish a modest scholarship for a person perusing education in the field of Library Sciences. I am just beginning the process and would like some suggestions or insight.

    • Tamara Krause says:

      I would suggest reaching out to other library foundations/groups that currently sponsor a scholarship program, such as the Seattle Public Library Foundation or the Friends of the Clearwater Public Library . You can get some ideas from their websites or reach out to them personally to see if they may be able to steer you in the right direction. I would also encourage you to contact your local Chamber of Commerce. Many host websites for local organizations and businesses, so they may be able to provide support, as well.

  25. Montage says:

    What advice or who should I contact if I want to start my own scholarship fund at the university I work to help students pay for college expenses, especially housing, for needy students?

    • Tamara Krause says:

      Contact the Director of Financial Aid and he/she will be able to help you work with the right people at the college to start a program.

  26. Vivek Shah says:

    Tamara,
    I had a couple of questions about starting up our own scholarship. First let me tell you a little about myself. I am in the United States Air Force training as an aviator. My partner is actually a well known wide-reciever in the NFL. We both went to the same high school and also the same college. We were wanting to help high school students out by offering a scholarship to those in need.

    We want to start out small, putting in our own money at first and then slowly building our fund each year by contacting for high school students we know that were successful and that are able to help.

    We want to send a message about working hard and staying discipline through high school to be successful in college and after. We want to set up briefs yearly at the high school to send the message, along with offer this scholarship.

    How would I go about starting this? Who do I need to contact? Does a tax expert need to be included if we decide to just put in our own money? Any other advice you have for us would be great. Please email me at vivekvinayshah@gmail.com

    Thanks!

    2d Lt. Vivek V. Shah
    USAF

    • Tamara Krause says:

      There are a few ways you can go about setting up a scholarship. One, you can work with your high school or college to set up a trust, providing direction on how the scholarship proceeds should be awarded. Two, you can check with your local Chamber of Commerce to see if they might be able to assist you with creating a scholarship. If these options don’t work, you may want to contact a local nonprofit center to seek help in creating a 501 (C)3 to start your scholarship or seek the assistance of a nonprofit attorney. If your partner is in the NFL, it’s probably a good idea to head in the nonprofit direction, as this will also give you more advantages when it comes to offering motivational programs and other assistance to young people in need.

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