Scholarship Funds

Must scholarship funds have a selection committee?

Yes. The community foundation will form a community scholarship selection committee to recommend scholarships in accordance with the purposes of the scholarship fund.

Can one organization or family make up the selection committee?

No. A selection committee cannot be made up entirely of donors to the fund, related parties (such as family members), employees, or the board members of an organization-supported scholarship.

According to IRS regulations, donors can comprise no more than one-third of a scholarship selection committee. This means, for example, if two donors wish to participate on a selection committee, the committee must have at least six people on it.

Can the donor set the criteria for selection?

Yes. We will help donors develop selection criteria most meaningful to them. Scholarships can support students from particular schools or geographic areas, students who will attend a certain university or are engaged in a specific program of study or activity.

The donor may also recommend criteria such as GPA, test scores, work experience, personal essay, or extracurricular activities be given more weight than other criteria in the selection process. The only restriction is that the selection criteria must be objective and non-discriminatory.

Can scholarships be paid directly to individuals?

No. Scholarships may only be paid to educational institutions in support of the recipient.

Is fundraising permitted for scholarship funds?

Yes, but please contact your development staff before beginning any fundraising efforts so we can talk about the guidelines and policies.

Why are there so many restrictions?

The rules are designed to comply with restrictions placed on scholarship funds by the Pension Protection Act of 2006. In addition, these rules help to ensure the scholarship selection is competitive and non-biased, and that no donors or their families are receiving benefits that they should not receive.