If you care about the future of education and want to help students go to college, you may consider creating an endowed scholarship fund. But what is an endowed scholarship? In short, it’s a fund that can offer scholarships to students in perpetuity. The vast majority of endowed scholarships are restricted—which means they’re created with specific guidelines for determining who receives them as well as how the funds can be used. Many donors choose to create a named scholarship fund so they can designate their gift in honor or memory of someone important in their lives; others simply want the flexibility to decide how their gift will be used within their community.
What Is an endowed scholarship?
An endowed scholarship is a gift of money or property that is invested and produces income to help students. These gifts are usually made by alumni, parents, friends and corporations in honor of someone who has made a significant contribution to the university or college. Endowed scholarships are often named after donors or people who have made significant contributions to the school.
How a scholarship is funded
How a scholarship is funded varies. Scholarships can be created by individuals, corporations, foundations and other organizations. They may have a single donor or multiple donors who contribute to the fund. A scholarship can also be established by an individual or group of individuals to benefit a specific student or group of students.
Scholarship funding sources
When you are deciding how to fund a scholarship, there are many sources available. A donor may choose to fund an endowed scholarship with:
- A grant or gift of cash or property. This could be from the sponsor’s own funds or from a third party, such as a foundation.
- An ongoing stream of income from investments (a scholarship endowment). The earnings from these investments can provide a steady flow of funds for generations to come without any further investment on the part of the donor or sponsor.
- A specific sum at one time (an outright gift). For example, if someone wanted to establish his wife’s name for $10 million he would make an outright gift through his estate plan and have it transferred directly into an account set up at NC State University Foundation Inc., where it would be invested by our professional investment staff until needed for scholarships in perpetuity…
Types of scholarships
There are many different types of scholarships available. Some of the most common include:
- Merit-based scholarships, which are granted based on academic achievement or participation in an extracurricular activity.
- Need-based scholarships, which can be awarded regardless of your academic performance if you demonstrate financial need.
- Athletic scholarships, which provide funding for students who excel in sports but do not meet other criteria for merit-based awards such as GPA or SAT scores (for example).
- Academic departmental awards, which may be available to students studying a particular subject area within a field at university level (for example).
Endowed scholarship basics
An endowed scholarship is a permanent fund that benefits a specific group of students and/or the school. The money in the account is invested, and whatever interest or earnings remain goes to help provide scholarships for those students in perpetuity (in theory).
Endowments are typically created by alumni, who wish to honor the memory of a family member or friend while helping future generations attend their alma mater. Other times, they’re established by corporations, foundations or other organizations looking to support higher education with an enduring gift.
When it comes time for you to make your gift, consider how much you want your funds to be worth when invested over time—you may even want them able to grow as much as possible before being disbursed. Depending on your objectives, we’ll work together so you can choose just how best this money will be used for years after your lifetime has ended.”
An endowed scholarship fund is a great way to support students without being a millionaire!
An endowed scholarship fund is a great way to support students without being a millionaire. When you give an endowed gift, you leave a legacy that will continue to be used for years to come. Your gift will provide opportunities for students for generations to come, which means that your generosity will impact the lives of many others.
There’s no doubt that higher education is expensive, and the cost of tuition continues to rise. We know firsthand how challenging it can be for students to afford college and pay for educational expenses. This is why we strive to provide as much financial help as possible, including endowed scholarships. If you’re interested in becoming a donor or would like more information about our scholarship programs, contact us today!