Have you ever thought of setting up a scholarship fund to impact the lives and educational possibilities for students? With the assistance of the FM Area Foundation, establishing a scholarship fund is a relatively simple process.
Here are a few things for you to consider before setting up your scholarship fund:
- Choose a name or designation for the scholarship, such as to honor or memorialize a specific individual or family establishing the fund.
- Determine what your initial gift will be. This is often determined by deciding the annual scholarship amount you would like to award, which in turn helps determine how much the initial gift would need to be to support an annual scholarship of that amount. The minimum amount required to set up a scholarship fund endowment with the FM Area Foundation is $5,000.
- Decide on a purpose and the criteria for the scholarship. Determine the type of student who should benefit from the funds, e.g., freshman, full or part-time status; and the criteria on which the scholarship will be based, e.g., academic performance, financial need, career path, athletics, specific geographical region, or a combination of many.
- Choose the award period. Some scholarships are one-time awards for which previous recipients may or may not be allowed to re-apply. Others are renewable based on certain criteria, e.g., satisfactory academic progress, continued performance ability.
- Decide on the duration of the fund. Most are established as endowed funds, in which the principal of the donation is invested and the interest is awarded to scholarship recipients. These types of scholarship funds become self-perpetuating. Others are set up to award scholarships for only a fixed number of years.
In addition to assisting you in deciding the purpose and criteria of the scholarship fund itself, the FM Area Foundation staff will help you in structuring the scholarship application process, putting together an advisory or scholarship committee, and ensuring your scholarship fund is established in compliance with IRS regulations.
For more information on setting up your endowed scholarship fund, including tax implications and payout calculations, contact Greg Diehl at 701.234.0756 or email@example.com.