How to start a scholarship fund in memory of a loved one
When someone close to you passes away, it’s natural to want to honor their legacy and the memories that mean so much to you. The people we hold dearest leave a lasting impact on our lives and the lives of those around us, so there are few better ways to honor their memory than by using that impact to help those in need. One effective and increasingly popular way to do this is by starting a scholarship fund in your loved one’s name through a nonprofit organization or as an endowed scholarship.
When it comes to scholarships, there are many misconceptions, one of which is that only governments, universities, companies, or professional fundraising managers can initiate them. The good news is that anyone can establish a scholarship or memorial fund. If you don’t know where to begin, look below for expert advice about how to start a scholarship fund in memory of your loved one. These scholarship programs can support students with financial needs in achieving their educational goals.
How to set up a scholarship fund in 7 easy steps
Starting a scholarship fund is a great way to keep the memory of a lost friend or family member alive, but it can also be an effective way to channel your grief into something positive. By offering the invaluable gift of education to those who can’t afford it, you can provide life-changing help to those in need while ensuring that your loved one’s legacy is one of generosity and kindness.
Here are 7 simple steps for how to create a scholarship fund for a student attending an educational institution, from starting from scratch to disbursing the award.
1. Establish your vision and goals
First, you need to spend some time considering the why of your scholarship and who or what, exactly, you are trying to benefit with your scholarship. When establishing a scholarship fund in memory of a loved one, it should line up with that person’s interests, values, and the legacy they left behind. Did they have any special hobbies or interests? What were their favorite subjects at school? What were their effects on their local community?
Contemplating these questions will allow you to create a scholarship program that authentically commemorates your loved one’s life. For example, if your loved one was a talented painter, then you might customize your scholarship for students attending art school or pursuing a related field of study.
Of course, the price of education extends well beyond tuition, so you might create an educational scholarship or grant dedicated to helping students with additional costs such as books, school supplies, and housing, all of which provide necessary support for scholarship recipients.
2. Decide on a budget and timeline
After you’ve chosen whom you want to aid and what type of scholarship fund you want to establish, it’s time to consider other practicalities, namely, your budget and timeline. Would you prefer a renewable scholarship? Or do you want to simply run it one time? Some scholarships run on an endowment instead. The donated amount is invested, and the returns fund the scholarship year after year.
Because creating your scholarship fund will ultimately be an outlay of cash (especially if you are going to be managing it yourself), you need to formulate a realistic and clear budget before you begin. Choose how many students you’d like to sponsor and establish a minimum that you’d like to grant. Your budget should also cover professional fees: legal costs, marketing, and any costs from reinvesting your fund’s assets. Think about setting up your fund with a nonprofit organization, which makes contributions tax-deductible.
3. Choose a management framework
The third step to creating a scholarship fund is selecting the management structure you would like to use. There are two primary choices: administering the fund directly or using a scholarship management service. Managing the fund yourself gives you more freedom and control. But it’s usually expensive, and you’ll need some familiarity with IRS rules and tax implications. A scholarship management organization can smooth this process for you. Because these organizations are already tax-exempt, contributions to your fund may qualify for a tax deduction. Check with a tax professional to confirm what applies to you.
Using a scholarship management service also means you won’t have to handle costs like website design, marketing, or legal fees yourself, since the organization takes care of these behind the scenes. That said, their service fees mean this route still isn’t cheap, and you’ll have less direct input at the inception of your scholarship fund. Still, it may be worthwhile for the opportunity to support students through scholarship programs tailored to specific eligibility criteria.
4. Set application criteria
One important aspect of getting a scholarship fund up and running is clearly identifying who is able to receive funding. Each scholarship also has certain eligibility requirements students must meet to be awarded the scholarship. The questions you want your applicants to answer will do a lot of your work for you when deciding who the best fit for your scholarship is. Make the most of scholarship application questions that allow students to highlight the things they’re actually good at.
It’s typical to set a minimum GPA. That expectation usually differs for athletic scholarships versus merit-based ones. For instance, a merit scholarship often needs several recommendation letters from teachers along with a higher GPA. Customize your scholarship to fit the purpose and always remember your loved one’s legacy. Include specific selection criteria in your application to help guide your selection committee.
5. Select a meaningful name
Your scholarship fund’s name is the one thing most people will remember, so choose wisely when deciding what to call it. Many founders of memorial scholarship funds include their loved one’s name in the name of the scholarship itself, but there are plenty of other creative ways to celebrate your loved one’s memory. Consider the interests of your friend or family member who has passed away, and see if you can include them in the name of your scholarship fund.
But whatever way you call attention to your loved one in the title of your scholarship fund, you would be wise to keep clarity and simplicity in mind. You want your scholarship fund’s name to be memorable and easy to pronounce, but also to feel close to your loved one’s spirit and to resonate with others. Once you’ve thought up some names, do a brief trademark search to ensure that your scholarship name hasn’t already been trademarked.
6. Establish a selection process
Looking through all of the applications is time-consuming, so it’s good to have a small team or committee to help with that process. If an official committee feels too formal for your scholarship fund, then soliciting the help of a few trusted friends or family members is a good alternative.
Make sure to give yourself enough time to review each application so that you’re able to make a thoroughly considered decision in time for your chosen deadline. It’s a good idea to make a clear rubric for how your committee will choose who the scholarship recipient is, so the process is fair. An established procedure helps maintain a nondiscriminatory basis for all scholarship awards.
7. Register your scholarship fund
Registering your scholarship fund with a community foundation is one of the easiest ways, but you may have less of a say in the qualification criteria you want to use. To locate accredited community foundations in your state or local area, you can use this community foundation locator. Another option would be to partner with a school, college, or university to create an academic scholarship, but many require you to have allocated a certain amount of money in a fund. Researching scholarship management services can also help to streamline the registration process.
You can also apply to be recognized as an official nonprofit, so any of your scholarship fund’s donors would get tax benefits. This process involves federal IRS requirements as well as separate state registration rules, especially around how you choose recipients. Registering as a nonprofit with the IRS can be an expensive, lengthy process when you’re setting up a scholarship fund.
IRS guidelines for starting a scholarship fund
Setting up a scholarship fund also means following specific IRS rules and tax requirements. This matters most if you manage your fund yourself. A scholarship management service will handle these legal details for you. If you’re setting up the fund on your own, you’ll need to establish a private foundation and file IRS paperwork to apply for tax-exempt status. A tax professional or attorney can help you understand the requirements and potential tax benefits.
Once you’re set up as a private foundation, file legal documents proving your fund qualifies as tax-exempt, then submit registration forms with your state and federal authorities. Your scholarship also needs a fair, documented process for selecting recipients. This process is tedious and involves plenty of paperwork, but following IRS regulations carefully helps ensure your fund is set up correctly and holds up if it’s ever reviewed.
How to raise money when starting a scholarship fund
One of the most important parts of setting up a scholarship program is knowing how to receive funding. If you’re having trouble gathering the money you need, online crowdfunding platforms like GoFundMe can help. Starting a memorial fundraiser for your scholarship fund allows you to unite close friends, family, and your wider community around the central goal of honoring your loved one’s life.
GoFundMe fundraising is safe, fast, and easy. Just build your page, share your story, and spread the word about your fundraiser! Donations will flow directly to your beneficiary’s bank account, and you don’t have to reach your fundraising goal to access the cash. A GoFundMe fundraiser can also help fund the initial endowment or annual scholarship contributions once your fund is established, and many families use crowdfunding alongside a formal scholarship structure rather than as a replacement for one. If you’re still not sure how to begin raising funds for your scholarship, check out our article on how GoFundMe works to find simple answers to all your fundraising questions. Here are some examples of the countless people who have used GoFundMe to turn their dreams of starting a scholarship fund into reality.
Support the Danny Pepin Memorial Scholarship Fund
Danny is gone, but he’ll never be forgotten, and those who knew him tell stories to this day of his gentle, kind spirit. In 2017, he was voted “Most Unforgettable” by his classmates at Chicopee Comprehensive High School, and, as there was nothing he loved more than the life-changing potential of an education, he served as a mentor to many of the younger kids around him.
After his death, a scholarship fund was established in his name through a group of close friends to continue Danny’s legacy of education. The Danny Pepin Memorial Scholarship Fund aims to provide students at Chicopee Comprehensive with $2,000 over two years, while offering additional financial support to Danny’s family. A fundraising goal of $32,000 was set in order to establish the fund, with almost half of this raised within one week.
David Porritt Music Scholarship Fund
David started playing guitar over 50 years ago on the beaches of Hawaii, and it was one of the things he loved most. It was fun, relaxing, and gave him an opportunity to be with others. Following David’s death, his family made it their mission to give something back to the next generation of young musicians, so they created the scholarship fund.
His family wanted David to have some type of scholarship that was based on what he had always loved, and from there, David’s family began crowdfunding to raise the $5,000 they needed for their project. They had surpassed their original fundraising goal by more than three times that sum in just a few weeks.
Delaney Marchant Memorial Scholarship Fund
The people who knew Delaney say she will be remembered as a compassionate person who always sought to help and do something good in the world. Delaney’s loved ones established two scholarship funds to help others discover the same joys she found in life, since her two greatest passions were theater and Taekwondo.
With one scholarship dedicated to graduating seniors pursuing a career in theater, and the other going to a dedicated Taekwondo student, Delaney’s loved ones set an ambitious fundraising goal of $45,000. In only two short years, Delaney’s scholarship fund has surpassed that goal with the help of family, friends, and donors from all across the US.
How to spread the word about your scholarship
Once your scholarship is set up, spread the word so students know it exists. Contact school counselors and student services offices at the schools you’re targeting. Many keep bulletin boards and newsletters specifically for scholarship listings. Reach out to community organizations, places of worship, or professional associations your loved one was connected to. List the scholarship for free on databases like Fastweb and Scholarships.com, where students actively search for funding. Your GoFundMe fundraiser page works as a public announcement too. Supporters can share it, donors can contribute, and applicants can read the story behind the award, all from one link.
Honor your loved one by setting up a scholarship fund today
You can honor the memory of a loved one, all while providing hope to students who need assistance in funding their education, when you establish a scholarship fund. Your friend or relative will be remembered, and their scholarship will ensure that there are always future generations of people who can make a lasting impact. Using GoFundMe to start a scholarship fundraiser will help offset any costs, and our fundraising tips and ideas will help give you the best shot at success. It’s never easy to ask for donations, but fundraising to honor the life of a loved one is something that just about anyone can get behind.
Ready to create some positive change? Get your scholarship fundraiser off to the perfect start today.
Starting a scholarship fund FAQs
There is no set minimum. A simple annual scholarship of $500 to $1,000 is achievable for many families, while larger scholarships tied to a private foundation typically require a more significant endowment to cover both the award and administrative costs. Many families start small with a GoFundMe fundraiser to raise an initial fund and grow it over time through annual contributions and donations.
Yes. If you’re wondering how to start a scholarship fund in honor of someone outside your immediate family, or how to start a memorial scholarship for a friend, colleague, or teammate, the answer is simple: anyone can establish a scholarship fund in memory of or in honor of someone else, and you do not need to be a family member or legal representative. The most important thing is to be transparent about the fund’s purpose and how contributions will be used. A GoFundMe fundraiser is a straightforward way to get started, with no registration or minimum amount required. Transaction fees, including credit and debit charges, apply.
Promotion works best when it’s ongoing rather than a one-time announcement. Refresh your listings each application cycle, update your social posts as deadlines approach, and check in with the schools or organizations you’ve partnered with to make sure the opportunity is still visible. For a full list of places to share your scholarship, see the outreach tips above.