Why Start a Scholarship Fund?
The Community Foundation of the New River Valley’s Scholarship Program is the fastest growing component of our work. With 57 scholarship funds established since 2002, we have been able to award a total of $1,334,454.70 to more than 1,100 NRV students while supplying donors with a convenient, well-managed way to give back to the community. Below are some advantages and things to keep in mind as you consider establishing a scholarship fund.
Strong Financial Management: The CFNRV has a 29-year history of managing charitable dollars for the benefit of our community. We are a trusted, local nonprofit confirmed in compliance with the Council on Foundation’s National Standards for Community Foundations, a prestigious designation indicating excellence in our field. We work closely with donors to make an immediate impact through scholarship awards while managing endowed funds to ensure that your fund will continue to benefit NRV students for generations to come.
Ensuring IRS Compliance: All scholarship programs, whether at the community foundation or your local college or university, must comply with the Pension Protection Act of 2006, which sets strict guidelines for management of scholarship funds for which donors receive a charitable deduction. The CFNRV’s scholarship review process meets the standards of the Pension Protection Act, giving you peace of mind and ensuring that any gift made to your fund is tax deductible.
Application Process Management: The CFNRV has a common application that is widely distributed throughout the region, helping to maximize the number of qualified applicants to your fund. We manage the entire process from marketing the program to reviewing applications, allowing you to take part without the hassle of managing an application process.
Opportunities to Celebrate: Your contribution is celebrated along with the talented students who receive scholarships each year. We hold an annual event that attracts well over 100 guests, and we publicize scholarship awards widely.
Items to Consider
A Charitable Gift: When establishing a scholarship fund, you are making an irrevocable, charitable gift for which you will receive a tax deduction. Your donation becomes part of the CFNRV’s assets, overseen by our Board of Directors. The CFNRV works with you on a fund agreement, which is our pledge to you that we will distribute your funds in accordance with your charitable intent. We also have a strong reputation for superb donor relations and communications to keep you engaged with our work.
Pension Protection Act: The Pension Protection Act specifically prescribes the role of the donor in the scholarship review process. Donors may read applications and provide feedback on applicants to their fund to the CFNRV’s Scholarship Committee, but donors cannot individually select their fund’s scholarship recipient. The Scholarship Committee, appointed by the Board of Directors must make all final scholarship decisions to ensure IRS compliance.
Management for Long-term and Immediate Impact: All funds at the CFNRV have two components, an endowment that is actively invested with scholarships awarded from investment proceeds, and a pass-through where the principal may be spent to make scholarship awards. Funds are endowed at $15,000 and you must reach this threshold within 5 years. You may award scholarships from your pass-through account while you are building your endowment, subject to the CFNRV’s policies and procedures.
To learn more about establishing a scholarship fund, contact Jessica Wirgau, Chief Executive Officer, at 540-381-8999 or email: firstname.lastname@example.org.