Offering scholarships is a great way to ensure that a community can build itself up. With people from the community getting a good education, they have wider access to opportunities. These people can then contribute towards the proper development of a community. If your nonprofit is thinking of starting a scholarship, you need to do it right. Here are some tips on how you can better make it work.
Have A Specific Constituency
Before anything else, you should decide on a specific target for your scholarship. You already likely have one requirement, which is living in the community that your nonprofit supports. But you should add more so that you can narrow down who receives the scholarship. Being too general can mean too many applicants to go through. For example, you want to offer a scholarship to those who want to go into useful trades. This can be helpful to those looking for help in their vocational studies. You can help fund those studying for plumbing or electrician trade qualification. That limits and focuses your scholarship’s efforts which makes it more effective.
Consult With Your Lawyer And Accountant
Creating a scholarship fund is not as simple as putting it in a special account. There are legal and financial requirements that your nonprofit needs to meet. This is where having a lawyer and an accountant. They make the entire process a lot easier and can set up the paperwork that needs signing along with the bare bones of it. You’ll need to discuss with them what your nonprofit wants to do with the scholarship, but it should be easy.
Decide On How To Keep It Funded
The initial fund for your scholarship will not be enough if you want it to continue for a long time. This is where you decide how to keep the scholarship fund. The preferred method is a simple donation. You go to your donors and others and ask them to donate to the fund. You can also have the nonprofit divert some of the funds that it raises towards the fund. Be aware of the maintenance fees for the fund. It is not cheap to have a lot of money coming into the scholarship fund, so coordinate with your accountant to ensure taxes and fees are completely paid. Additionally, some donations may come in the form of assets that create a constant revenue stream like investments or something similar. This means you can do more with the scholarship fund.
Create A Trustworthy Committee
Managing the scholarship is going to be an important job. If you don’t want to distract your team from handling the various daily duties at your nonprofit, then you need to appoint a committee to handle it. Bringing in more people also ensures that you have outside perspectives when it comes to handling the scholarship. The committee will be the ones who screen potential applicants, make decisions about the funds, and award the scholarship funds. Note that you’ll need to implement rules that family members of those on the committee can’t apply for the scholarship to avoid any conflict of interest. Besides that, the committee will be in charge of advertising the scholarship.
Setup An Application Process
Then there is the most important part of setting up your scholarship: determining the rules for applications and the process itself. While the nonprofit can choose any criteria, it is better to look at various factors like financial need, academic skills, and personal character. When the criteria are set, they should not be changed unless under major circumstances. As for the application process, an application period should be set so that your nonprofit can receive the applications and they can be reviewed. This gives the scholarship committee the chance to look for the most deserving candidates.
Determine The Rules For Use
It would be best if you also decided on how exactly the scholarship funds are issued and used. Some scholarships don’t give the person money. Sometimes the funds can only be used for specific purposes. For example, some scholarships are directly transferred to the school to pay for the tuition. Some release the money as an allowance to ensure that the recipients will have a stream of funds instead of a big windfall.
Setting up a scholarship is a good move for long-term community development. But it is not as easy as putting money in a fund. Your nonprofit has to be smart about managing the money and who to award the scholarships to. For a community to get the maximum value from a scholarship program, your nonprofit must be smart and keep a solid watch over it. The tips above should be a big help.