Our initial investigation proved there is more than one way to do this!
The most thorough way to start a hands-on scholarship fund is to start our own non-profit organization, namely a 510(c)(3). We would have to become incorporated, which we’d have to file for through our own state government. After that has been approved we have to file for a Tax Exempt status in order to offer our donors a tax write off. It takes a lot of time and it’s a lot of work. For those of you who are interested in starting a non-profit, here is a link that offers a lot of information.
In addition we’d have to select a board of directors and organize board meetings and find the time to do all our administrative work. Once we’d finally be ready to fund raise we’d have to handle the money in our corporate account and then select our scholarship winners. That’s a very simple way of describing how much work goes into this method. It’s pretty much a full time job.
Which brings me to our second option and the one I’m strongly favoring. Except that I’m not even sure if it’s an option! I would love to find a scholarship management service that takes care of all the administrative work. They are already a non-profit so the donors can donate directly to them, but the money is allocated to ASDFunds. They handle all the money, the applications, the selection process and so forth. All we do is set the criteria for the winners.
So that sounds ideal, right? Well, it’s frustrating because that is hard to find! I’ve been in touch with Scholarship America which is probably the biggest scholarship management service in the US but they would need us to put $100,000 down from the start or they cannot work with us. Everyone I’ve contacted so far has the same qualifications. We can’t raise $100,000 until we have a fund in place where people can donate! Groan.
I’ll keep you updated. I’m hoping to find a smaller non-profit that will look at it as charity instead of business which Scholarship America is doing.