Start Your Own Scholarship Fund
Creating a scholarship through the Vermont Scholarship Fund is the perfect way to make a lasting impact in the lives of Vermont students and their families while honoring the legacy of your family, business, or someone important to you. And we make it easy. Our knowledgeable staff members are here to walk you through the process of creating a scholarship fund from start to finish. Then, we’ll take care of all the details of administering your scholarship.
Steps to starting your scholarship
- Contact us to set up a meeting with one of our experienced staff members, who will help you tailor your scholarship so it reflects your personal and philanthropic values as well as your financial goals. Call us toll-free at 888-253-4819 or email us at firstname.lastname@example.org to set up a meeting.
- Tell us about the students you’d like to see receive your scholarship. You may decide to focus your scholarship on:
- Students from specific regions of Vermont
- Students who plan to study in a certain academic area or work in a specific field (like environmental science or music education)
- Students with a demonstrated financial need
- Students who have overcome great adversity in their lives
- Or some combination of factors
- Work with us to decide what criteria students will need to meet when applying for your scholarship. These often include:
- Student essays
- Student financial need (using the federal financial aid form that is integral to any college financial aid application)
- Letters of recommendation from teachers or others in the community who know the student
- Choose the type of scholarship you want to set up. Your options include:
- A named endowed scholarship: A scholarship to honor your family, business, or someone important to you. An endowed scholarship is a permanent fund in which you make a substantial contribution of funds that VSAC invests as a managed fund. The goal is for your principal (the amount you contribute at the start) to remain intact, while an agreed-upon annual “spend rate” (typically 4%-5%) is used to award the scholarship each year. An endowed scholarship is designed to last forever. To set up an endowed scholarship, you’ll need a contribution of at least $25,000.
- A named annual scholarship: An annual scholarship to honor your family or someone important to you. An annual scholarship is a fund in which the money you contribute is directly disbursed (given out). You can set up an annual named scholarship with as little as $1,000—and you’ll need to continue contributing $1,000 or more each year.
- A term endowment scholarship: An annual scholarship to honor your family or someone important to you. With this type of fund, you contribute a lump sum of $10,000 or more. The total balance of the fund will be spent down for a set number of years or until the fund balance is zero.
- Choose how you’d like to contribute your gifts. Your options include:
- Outright gifts: These are gifts that come from your income or capital assets (like cash or marketable securities). You’ll receive a tax deduction right away (subject to federal and state income tax guidelines).
- Planned gifts and bequests:These are gifts you plan to give during your lifetime or as part of your will or trust agreement when you die. Charitable bequests are currently fully deductible for federal estate taxes.
Planned gift and bequest options include:
Bequests and testamentary gifts: For some donors, a bequest is an easy way to make a significant gift. Typically, a bequest to the Vermont Scholarship Fund is listed as a provision in your will, stipulating the transfer of funds after your death. You may designate a dollar amount or a percentage of your estate, or name the Vermont Scholarship Fund as the final gift recipient after all other bequests have been paid.
Life insurance: You may also irrevocably transfer the ownership and delivery of a life insurance policy to the Vermont Scholarship Fund. This may offer you tax advantages.
Retirement savings: You may designate the Vermont Scholarship Fund as a death beneficiary of your IRA, 401(k), or other retirement savings plan. This option may save you and your heirs both income and estate taxes.
- Life income gifts:These retained interest gifts are considered planned gifts, but they’re given while you’re still living. Life income gifts can be used to establish a scholarship fund while also reducing your tax burden and providing lifetime income for you or a family member. Following the death of the last beneficiary, the assets are transferred to the Vermont Scholarship Fund for use as you have specified.
Life income gift options include:
- Gift annuity: This option is an attractive way to make a gift and retain a fixed income for the life of the beneficiary. Rates vary depending on the age of the beneficiary.
- Charitable remainder trusts: These larger, separately managed trusts pay either a fixed income or a percentage of the market value of the trust, which is valued annually. They may run for a lifetime or for a term of years.
- Charitable lead trusts: These differ from charitable remainder trusts in that payments are made to the Vermont Scholarship Fund for a specified period of time. At the end of this period, the assets are transferred back to you or your named beneficiary.
- Gift of life tenancy: You may make a gift of a personal residence, second home, or farm to the Vermont Scholarship Fund while retaining the right to occupy the premises during your lifetime. Your spouse can retain the same right. A gift of life tenancy allows you to claim an immediate income tax deduction for a portion of the appraised value of the property.
- Let VSAC do the work of administering your scholarship. When you establish your named scholarship with the Vermont Scholarship Fund, VSAC will:
- Make annual awards
- Acknowledge your gift for tax return preparation purposes
- Publish scholarship description, eligibility, and selection criteria in our scholarship booklet
- Provide scholarship publicity to reach the most students possible
- Receive, acknowledge, and evaluate applications
- Select scholarship recipients consistent with your wishes
- Issue scholarship awards to the student’s chosen school
- Verify student enrollment and satisfactory academic progress
- Respond to scholarship inquiries
- Notify you of the names and addresses of the scholarship recipients
Ready to start your scholarship?
Give us a call at 888-253-4819 or email us at email@example.com to set up a meeting.