Paying for college is a struggle for almost everyone, and many students and families benefit greatly from a scholarship. For families that already have the means, developing a scholarship fund for children is a smart move. By setting aside a specific amount of money each year, it will become far easier to pay for the children's tuition by the time they hit college. Read on for tips on how to establish your children's scholarship fund.
Creating a scholarship fund is a lot of work, but it is not incredibly difficult. Once you learn how scholarship funds should be structured, the process of creating one becomes a lot easier. As with anything, proper planning is the key to creating a good scholarship fund. The most important aspect of a scholarship fund is knowing how much money you need to set aside. This will not be known when your children are younger, but as they age you might be able to determine the sort of university or college they plan to attend. Estimate how much money will be needed to pay their tuition, or at least how much should be set aside in the form of a scholarship.
The majority of money for regular scholarship funds comes from sponsors and donations. You should certainly try to secure these as well, creating a plan of how you will sell the scholarship fund to potential donors. The only thing you can count on, however, is the money you place into the fund yourself. Thus, set up a plan to place money into an account each month. Calculate how much money you need to set aside so that is will accumulate into the amount you need by the time your children reach college. Obviously, the sooner you start, the easier it will be. Plus, if you start early enough, you can place funds into a savings account that will gain interest. In this way, you can earn a lot of money from interest over the period between the creating of the fund and the start of college.
Since your fundraising efforts are for individuals as opposed to a business, there are different rules regarding the fund's creation. Still, if you are receiving any money from outside sources (which really makes the fund a scholarship), you need to make sure the fund complies with state and Federal laws. Consult an attorney regarding the legalities of your fund, and make sure it complies with all tax laws. The last thing you want is a visit from the IRS.
Creating a scholarship fund for your children can actually be easier than traditional scholarship funds because you do not need to set up specific eligibility requirements. You know to whom the funds will be going, so there is no need to search to find the perfect candidates. There is also no need to set up an award period or duration period. The scholarship fund will be a one-time gift (for each child), so the main things about which you need to worry are the fund's structure and the tax laws surrounding its creation.