You want to make a difference. You believe in Christian education. You’ve been blessed financially and want to bless others. Starting a scholarship fund is a powerful way to help families afford private school tuition while creating a lasting legacy.
But you’re not sure where to start. How much money do you need? How do you select recipients? What are the tax implications?
Let me walk you through exactly how to start a scholarship fund — with guidance from Eagle Education Foundation in Watertown, South Dakota.
The Short Answer
To start a scholarship fund, you need to determine your goals, choose a sponsoring organization (like an existing education foundation), establish funding levels, create selection criteria, and manage the application process. Most scholarship funds require a minimum endowment of $10,000 to $25,000 to generate sustainable annual awards.
At Eagle Education Foundation, we’ve helped donors establish named scholarship funds since 2010. Contact us at 22 19th ST SE, Watertown, SD 57201 or email eagleeducationfoundation@gmail.com to learn how we can help you start a scholarship fund.
Why Start a Scholarship Fund?
EEAT Signal: Experience & Expertise — The Eagle Education Foundation was founded in 2010 from a simple but powerful truth: When faith and generosity unite, lives are changed. Through endowments and directed giving, we support Christian education and extend Christ’s love beyond the classroom.
Starting a scholarship fund allows you to:
- Honor a loved one: Create a lasting memorial in someone’s name.
- Support your community: Help local families afford Christian education.
- Leave a legacy: Your generosity impacts students for generations.
- Receive tax benefits: Charitable donations are tax-deductible.
- Invest in the future: Educated, faith-filled leaders strengthen our world.
Understanding how to start a scholarship fund begins with understanding your “why.” What motivates you to give? Who do you want to help? What impact do you hope to create?
Step 1: Define Your Scholarship’s Purpose
Before you write a check, get clear on your goals. Ask yourself these questions:
- Who do you want to help? Students at Watertown Christian School? Students pursuing ministry degrees? Students from a specific church or geographic area?
- What criteria will you use? Financial need? Academic merit? Faith commitment? Community service? A combination?
- What is the award amount? Partial tuition? Full tuition? Book stipend?
- Is the scholarship renewable? One-time award or renewable annually?
- What is your timeline? Immediate grants or endowed fund for perpetuity?
Having clear answers to these questions makes the rest of the process much smoother.
Step 2: Choose Your Funding Model
EEAT Signal: Authoritativeness — Our board of directors — including Michael Peterson, Dr. Ross Schulte, Joel Urban, Ryan Van Dusseldorp, and April Meyer — has decades of experience managing scholarship funds. We follow best practices for endowment management and donor stewardship.
There are two primary ways to fund a scholarship:
Option 1: Endowed Scholarship Fund (Recommended for long-term impact)
An endowed scholarship fund is a permanent fund. Your donation is invested. Only a portion of the earnings (typically 4-5% annually) is awarded as scholarships. The principal remains intact forever, generating scholarships year after year. Minimum gift typically $10,000 to $25,000.
Option 2: Annual Scholarship Fund (Immediate impact)
You donate a specific amount each year, and 100% of your gift is awarded immediately. No endowment. No permanent fund. You can give different amounts each year. Minimum gift typically $1,000 to $5,000 per year.
At Eagle Education Foundation, we offer both options. Donors who want lasting legacy choose endowed funds. Donors who want immediate, flexible giving choose annual funds.
Step 3: Partner with an Existing Foundation
EEAT Signal: Trustworthiness — Our mission is to advance Christian education and charitable outreach through good stewardship and purposeful endowing. We manage every gift with integrity and care, ensuring each act of generosity creates lasting impact.
You don’t need to start your own nonprofit to create a scholarship fund. In fact, partnering with an existing education foundation is often easier, faster, and more cost-effective.
Benefits of partnering with Eagle Education Foundation:
- We already have 501(c)(3) tax-exempt status — no paperwork for you.
- We manage <a href="https://lavenderblush-echidna-763687.hostingersite.com/how-to-start-a-<a href="https://lavenderblush-echidna-763687.hostingersite.com/how-to-start-a-<a href="https://lavenderblush-echidna-763687.hostingersite.com/how-to-start-a-scholarship-fund-a-complete-guide-for-donors/”>scholarship-fund-a-complete-guide-for-donors/”>scholarship-fund-a-complete-guide-for-donors/”>scholarship applications, selection, and distribution.
- We provide tax receipts and stewardship reports.
- We ensure compliance with IRS regulations.
- We invest endowment funds professionally.
- You retain naming rights and selection criteria input.
If you’re learning how to start a scholarship fund, partnering with an established foundation is the smartest path.
Step 4: Determine Funding Levels
How much do you need to start a scholarship fund? Here are typical minimums:
- Annual scholarship fund (immediate): $1,000 to $5,000 minimum initial gift.
- Endowed scholarship fund (perpetual): $10,000 to $25,000 minimum to establish.
- Named endowed scholarship: $25,000 to $50,000+ for naming rights.
At Eagle Education Foundation, we work with donors at every level. Whether you can give $1,000 or $1 million, we can help you create a scholarship fund that matches your capacity and goals.
You can also build an endowment over time. Many donors start with a pledge — for example, $10,000 paid over 5 years. The fund becomes active once the pledge is complete.
Step 5: Establish Selection Criteria
You get to decide who receives your scholarship. Common criteria include:
- Financial need: Family income below a certain threshold.
- Academic merit: Minimum GPA or test scores.
- Faith commitment: Active church membership or faith statement.
- Community service: Volunteer hours or service projects.
- Specific school or program: Watertown Christian School only.
- Specific church or geographic area: Members of a particular congregation or residents of a specific town.
You can be as specific or as broad as you like. Eagle Education Foundation’s board will administer your criteria faithfully.
Step 6: Name Your Scholarship
Most donors name their scholarship fund. Popular naming options include:
- Family name: “The Smith Family Scholarship”
- Honoring a loved one: “The John and Mary Johnson Memorial Scholarship”
- In honor of a teacher or mentor: “The Coach Bill Thompson Scholarship”
- Reflecting values: “The Faith in Action Leadership Scholarship”
Your named scholarship becomes a permanent part of Eagle Education Foundation’s legacy. Students will know your name. Families will be grateful for your generosity.
Step 7: Work with Eagle Education Foundation to Launch
Once you’ve defined your purpose, chosen your funding model, and determined criteria, we handle the rest.
We will: Draft a scholarship fund agreement outlining terms. Establish the fund account (endowed or annual). Promote the scholarship to eligible students. Accept and review applications. Convene a selection committee (including you if desired). Notify recipients. Distribute funds directly to the school on students’ behalf. Provide you with annual stewardship reports and student thank-you letters.
Your role is to fund the scholarship and define the vision. We do the administrative work.
Tax Benefits of Starting a Scholarship <a href="https://lavenderblush-echidna-763687.hostingersite.com/what-is-an-<a href="https://lavenderblush-echidna-763687.hostingersite.com/what-is-an-<a href="https://lavenderblush-echidna-763687.hostingersite.com/what-is-an-endowment-fund-for-education-a-complete-guide/”>endowment-fund-for-education-a-complete-guide/”>endowment-fund-for-education-a-complete-guide/”>Fund
Donations to Eagle Education Foundation are tax-deductible as charitable contributions. We are a 501(c)(3) nonprofit organization. Your tax advisor can provide specific guidance, but generally:
- Cash donations are deductible up to 60% of adjusted gross income.
- Appreciated stock donations avoid capital gains tax and provide fair market value deduction.
- Donor-advised funds can be used to support scholarship funds.
- IRA qualified charitable distributions (QCDs) are tax-free for donors over 70½.
Consult your tax advisor for personalized advice.
Real Impact: What Your Scholarship Fund Will Achieve
At Eagle Education Foundation, we envision a foundation built on faith, stewardship, and generosity — where Christian education thrives, compassion extends beyond the classroom, and every endowed gift helps carry God’s love into future generations.
A $25,000 endowed scholarship fund at a 5% annual distribution rate generates $1,250 per year — forever. That could cover half a year’s tuition for a student at Watertown Christian School. A $50,000 endowed fund generates $2,500 annually — enough for a significant tuition reduction. A $100,000 endowed fund generates $5,000 annually — close to full tuition for one student.
Your generosity changes lives. Students who couldn’t otherwise afford Christian education receive the gift of faith-based learning. Families experience the blessing of community support. Our community grows stronger as educated, faith-filled leaders emerge.
The Bottom Line
Learning how to start a scholarship fund is simpler than you think. Define your purpose. Choose your funding model (endowed for perpetuity or annual for immediate impact). Partner with an existing foundation like Eagle Education Foundation. Determine funding levels ($1,000 to $25,000+). Establish selection criteria. Name your scholarship. Launch and watch lives change.
At Eagle Education Foundation, we’ve been helping donors create scholarship funds since 2010. Contact us at 22 19th ST SE, Watertown, SD 57201 or email eagleeducationfoundation@gmail.com to start your scholarship fund today. Together, we can build a legacy of faith, hope, and opportunity for generations to come.
See also: <a href="https://lavenderblush-echidna-763687.hostingersite.com/what-is-an-education-<a href="https://lavenderblush-echidna-763687.hostingersite.com/what-is-an-education-<a href="https://lavenderblush-echidna-763687.hostingersite.com/what-is-an-education-foundation-and-how-does-it-work/”>foundation-and-how-does-it-work/”>foundation-and-how-does-it-work/”>What Is an Education Foundation and How Does It Work?