7 steps for creating a scholarship program

In my profession, I get to meet so many people every day who give me new insights and open my eyes to different perspectives. Sometimes, I’m so blown away by the young people that I meet that I want to do whatever I can to help them succeed well into the future. One of the ways I’ve found business owners can give back to anyone you’d like to help grow in their chosen field is through the creation of a scholarship program. This means you can help provide the funds to benefit your local or professional community or honor someone you love or respect.

Creating a scholarship may seem like a lofty goal, but by following a few simple steps, you can easily set one up for just about anyone you’d like to help. Follow the next 7 steps outlined below to kick off your own scholarship program.

How much money would you like to invest to develop a scholarship fund? That’s where you need to start putting pen to paper. According to Kiplinger, if you want to set up an endowment, which typically allows you to pay out scholarships from the investment’s income, you should start with $20,000 to $25,000 to pay out $1,000 each year. However, you don’t have to set up an endowment and you could simply provide a one-time gift or distribute a larger sum of money across numerous awards. The choice is up to you.

When you know what you want to do, you’ll need to talk to a tax adviser to determine how to best set up your fund. An adviser will give you insights into the different types of structures you can set up depending upon your budget and goals.

You may want to fund the scholarship by yourself. You could crowdsource the funds. Or you may want to organize a group of individuals or businesses who may want to contribute to your scholarship fund. Whatever you choose to do, once you have your budget in mind, it’s time to set how much you want to put in your fund.

Because you’ll have talked with a tax adviser by now, you’ll know if you need to set up a non-profit, go directly to your favorite university’s endowment, create a trust, or something else. When the structure is set, you can start contributing to the fund and get to the next steps of figuring out who to help.

Maybe you already have someone in mind you’d like to give a scholarship to. Or maybe you just have an idea. Either is okay, as long as you’re thinking about the type of person you want these funds to help. Start thinking about the things you’re most passionate about. Maybe you’ve chosen to structure a scholarship around your business, so focusing on your mission or vision may be the way you determine who the scholarship will benefit. It’s important to put careful thought into it.

In my field, we often offer scholarships for students looking at careers in construction. But you may be interested in providing scholarships to first generation college students, minorities, or a deserving student within your former university degree program. You might even want to honor a person who most exemplifies the traits of someone you’ve lost, such as a parent or mentor. Once you know who you want to help, you’ll be one step closer to getting those funds to the right person.

When the details of the scholarship are set, it’s time to start thinking about how someone could apply for the funding. Once you know the type of person you are targeting, put some thought into how you’ll narrow down the pool of applicants.

Be thinking about the criteria you’d like for your scholarship. Should it be based on GPA? What about financial need? Maybe your scholarship is for the child of one of your employees. Or perhaps you want to know their plans to enhance the career you’re in. Whatever you choose, make sure the criteria are clear, so applicants know whether they are eligible.

Ready to start getting those applications coming in? Make sure you have transparent procedures in place so the administrative side is stress-free. Also, be clear on where individuals can pick up the application, when applications are due, any what documents are needed for the submission. You’ll also want to make sure you announce when awards are determined and dispersed and how winners will be notified.

And don’t forget to put a great selection committee in place, so you aren’t tackling it all by yourself. You could set up a committee or ask your board of directors to help with the process. Once that is finalized, you’re almost ready to go.

Next, make sure you are properly promoting your scholarship to the appropriate target market. Students are often hunting high and low for funds to help pay for their education, so make sure you’re doing your due diligence to help them find out about what you’re offering.

Whether you’re working directly with a school, communicating it to your staff, putting it out on social media, or listing it with organizations that align with your values, it’s critical that your communications strategy helps you get many qualified applicants. Next comes the fun part. 

Perhaps the best part is the final step: rewarding your chosen scholar. Once you’ve made your final selection, you get to make the announcement to the winner or winners. To me, this is the exciting part. It’s where you get to see how meaningful this effort you’ve made can be to student and their families. For some, it can genuinely change their future.

Once that reward has been announced, you can start looking ahead at doing it all over again in the upcoming year, if that’s the goal you’ve had in place. And what an incredible feeling. 

If you have the means, I cannot stress enough how meaningful it can be to set up a scholarship for students. It’s such a worthwhile investment, and something you’ll be proud you did for many years to come.

Jim Allen is a business leader and entrepreneur who has built one of the top-producing real estate groups in the Triangle. He is President of The Jim Allen Group, which is consistently named one of the top real estate teams in North Carolina and even North America.