Greater Worcester Community Foundation

Starting a Scholarship Fund | Resources

Education opens doors to a better life, yet the cost of college prevents many young people from achieving their educational goals. For many students, a scholarship award from a private source makes the difference in their ability to attend college. You can be part of the solution. A scholarship fund of $10,000 or more created at Greater Worcester Community Foundation offers you a simple and flexible way to help students today and in the future.

Establishing a scholarship fund has tax benefits, too. As a qualified public charity, Greater Worcester Community Foundation offers the maximum deductibility for income, gift and estate tax purposes. We accept gifts of cash, securities or other property during your lifetime, as part of your estate or both. Once the Fund is established, additional gifts of any size may be added to it.

As the donor, you decide the purpose of your scholarship fund and the criteria that will be used to select students. You might find our Questions to Consider useful when designing your scholarship fund.

The Foundation handles the scholarship process from start to finish. We reach out to find eligible students. We accept and screen applications. We organize interviews (if desired). We verify enrollment plans, distribute checks and monitor student progress.

How long does it take to set up a Fund?

Setting up a fund is as simple as transferring a gift and signing an agreement. In most cases, a lawyer is not needed to create a fund with us, since our gift instruments are simple and straightforward.

How much money does it take to create a Scholarship Fund?

We require a minimum gift of $10,000 to create any named fund. This may be paid at once or pledged over five years. Scholarships are not awarded until the fund reaches $10,000. If you decide that the fund is a permanent endowment fund subject to our spending rule of 4.5%*, then a $10,000 fund will award $450. Most people seeking to help students usually want to award at least $1,000; therefore a $25,000 fund is suggested.

*This spending policy was adopted by the Foundation to smooth out the impact of market fluctuations. It also is designed to ensure that the value of funds is not eroded by inflation over time. Earnings above the spending policy are reinvested in your named fund.

How is the fund managed? What are the fees?

Your fund will be invested as part of the Foundation's commingled investment pool. This pool is currently invested in 70% equities and 30% fixed income, using professional investment managers. Each fund is then unitized and credited with income, gains, gifts, grants and fees. Reports on the fund's value are provided on an annual basis or more frequently if you desire.

The Foundation charges an annual administrative fee of 1.15% of the fund's market value for scholarship funds. Investment management fees are additional, usually less than 1% of the fund's market value.

May I involve my family members in the selection process?
Yes you may, as long as they do not dominate the selection committee in number or in action.

My company is interested in starting a scholarship. Can you help?
Yes. We have assisted several companies with their scholarship program. There are some legal ground rules that we will discuss with you to ensure that the scholarship is not considered an employee benefit.

How are scholarships paid?
Checks are made payable and sent to the college. Awards are typically sent in one installment in August. This system helps to minimize error and prevent the possibility of awards being misused.

How will applicants find out about the Scholarship Fund?
Nearly all of our scholarship funds are described in a common brochure and application package. The Foundation publishes this in the winter and distributes it widely to all of the public and private high schools in Worcester County and to community centers, libraries and similar public locations.

In addition, scholarship funds are listed in our Annual Report and on our web site.

For more information on establishing a Scholarship Fund, please contact Ann Lisi. To learn more about scholarship awards, please contact Linda Chadwick.


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