Q: Where can I locate information regarding the “how-to’s” of starting a scholarship to make sure that I cover all of the legal aspects?
– A. Burnell-Thomas, Via the Internet
A: According to www.idealist.org, there are quite a few things you can do to get your scholarship program started.
First, if you have funds of your own that you plan to use, you can use that as your endowment, which means the principal of your gift will be invested, and the interest gained will be used to award a scholarship. If not, you could hold several events from golf outings to flea markets to raise money. Here are some other tips:
1. Set up the organization. You’ll want to contact a foundation lawyer at the American Bar Association (www.abanet.org) as well as a certified public accountant to let you know exactly how this works.
2. Review the IRS 501(c)(3) code and apply for recognition as a tax-exempt entity with IRS Form 1023 at www.irs.gov.
3. Write a business plan that includes your mission, fund-raising goals, how funds will be distributed, and a time frame.
In addition, the “Start-Up” section of Idealist’s Nonprofit FAQ has a lot of information on the topic. Log on to www.nonprofits.org/npofaq.