Anyone leaving behind a scholarship fund?

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Topic Author
ThankYouJack
Posts: 3671
Joined: Wed Oct 08, 2014 7:27 pm

Anyone leaving behind a scholarship fund?

Post by ThankYouJack »

I was awarded a small scholarship out of high school from an individual who set one up in his trust. If things go well (work, investment, child wise) I'd like to pay it forward. Anyway, curious if others on here plan to leave behind a scholarship fund and if so, how's it set up?
MathWizard
Posts: 4536
Joined: Tue Jul 26, 2011 1:35 pm

Re: Anyone leaving behind a scholarship fund?

Post by MathWizard »

I'm planning on a small one through my alma mater after I go. I already give to the scholarship fund, so
I may not give enough to establish an endowed scholarship that would last a long time, which sounds
like what you want to do.


The Univ. runs it all through their planned giving program.
Their minimum for an endowed scholarship fund is $50K .

From their site:
Typically, an endowment lives in perpetuity, but those who establish a named endowment can set its lifespan. Individual endowment funds with the Foundation are pooled together for investment purposes, yet each endowment maintains its own identity and separate accounting. Donors and their successors may receive an annual report of earnings and distributions. Earnings from the pool are allocated to each fund based on a weighted average calculation. Amounts available for distribution are calculated annually using a spending formula consisting of a percentage of each fund’s average market value over a period of time.

You can also set up a charitable remainder trust, which gives you a tax deduction now, and some
earnings at least for a time while you are still living. You cannot revoke this trust, but you get some
benefit while you are living. These are popular with churches, especially with widows/widowers
who either have no children, or whose children don't need a big inheritance. I assume a University
would do these as well. They already have everything figured out if that is the way you want to go.
IowaFarmBoy
Posts: 877
Joined: Fri Jan 22, 2010 8:19 am

Re: Anyone leaving behind a scholarship fund?

Post by IowaFarmBoy »

I don't have any plans to do so but the small rural high school I graduated from has one that I could contribute to or work with. That seems a lot simpler than trying to set up a trust and have it managed after I am gone.
bloom2708
Posts: 8380
Joined: Wed Apr 02, 2014 2:08 pm
Location: Fargo, ND

Re: Anyone leaving behind a scholarship fund?

Post by bloom2708 »

Are you thinking of your Alma Mater?

Most colleges can do this. You can put stipulations. $1,000 per year to a student from X County or Y town or Z high school going into a Business or Teaching career. Just some ideas.

If you are thinking any college/university, then it would be a tougher task that I'm not familiar with. A Trust scenario.
"We are here to provoke thoughtfulness, not agree with you." Unknown Boglehead
bltn
Posts: 987
Joined: Mon Feb 20, 2017 9:32 pm

Re: Anyone leaving behind a scholarship fund?

Post by bltn »

I m considering leaving a modest amount to my college which is also my son s alma mater. I ve discussed this briefly with the school, and I think they would make this bequest easy to do.
BluesH
Posts: 94
Joined: Mon Nov 19, 2018 1:31 pm

Re: Anyone leaving behind a scholarship fund?

Post by BluesH »

Yes. I have a written agreement with the University of Illinois Foundation (my alma mater), creating the "Robert and Pauline H" scholarship fund. I got to establish criteria for picking the recipients. And if the earnings on the endowment are not enough for a full scholarship, they'll combine those earnings with other similarly endowed scholarships. Of course, they have to trust that my wife and I won't change our revocable trust before we die, thus cutting them out.

It's a good feeling. If you're similarly inclined, I'd suggest talking to your alma mater.
aspiringboglehead
Posts: 104
Joined: Sat Sep 03, 2011 9:28 pm

Re: Anyone leaving behind a scholarship fund?

Post by aspiringboglehead »

I always encourage people to think about giving to smaller schools and perhaps secondary schools instead of to universities. I say this as a university professor, so it's against my interests! But the money can make much more of a difference to (for example) a high school than to a well-endowed university.
Topic Author
ThankYouJack
Posts: 3671
Joined: Wed Oct 08, 2014 7:27 pm

Re: Anyone leaving behind a scholarship fund?

Post by ThankYouJack »

Thanks all. I was thinking in terms of my high school and not my alma mater.
retire2022
Posts: 1818
Joined: Tue Oct 02, 2018 6:10 pm
Location: NYC

Re: Anyone leaving behind a scholarship fund?

Post by retire2022 »

All I am interested in doing this as part of my estate planning, would like to hear what is involved.
megabad
Posts: 3334
Joined: Fri Jun 01, 2018 4:00 pm

Re: Anyone leaving behind a scholarship fund?

Post by megabad »

If you don't care about name recognition and the amount is small, I think it is easier to do this through a larger entity. In my case, I have enacted scholarships through Kiwanis, Rotary, Community Foundation, and a couple of other smaller local organizations that seek out local high school students. In some cases, the entire scholarship amount was funded by me, but the check came from the organization and I remained anonymous to the recipient (though I have met almost all of them). I usually sit on the selection committee so I have a say in how it gets distributed. I have also donated directly to colleges but I prefer the local stuff.

I have not yet figured out if I want to or how to accomplish this as a legacy. I do not like supporting my alma maters endowment because I believe it is not properly managed (though it is very large) and it is considered in the schools budget (which I think is inappropriate as well). I also do not like relinquishing control to another individual or committee outside of my family so I would need to come up with a very specific set of criteria that would be hard to craft in such a way that they would serve multiple generations of scholarships. Alternatively, I guess I could have a large cadre of children that were well educated and kindhearted enough to enact such a plan through a (small) foundation. But alas no plans for more than 2...
LMBFlorida
Posts: 64
Joined: Thu Apr 12, 2018 6:57 pm

Re: Anyone leaving behind a scholarship fund?

Post by LMBFlorida »

My Grandfather set up a scholarship in my fathers name when he passed away a number of years ago. This is given to a high school graduate each year and managed by a local foundation in the area that manages these types of scholarships. My grandfather has since passed and I get the yearly letter providing update and status. I actually received the 2018 documentation this week. The value of the endowment is about 100K and they provide a scholarship of about 4K each year. For this service they take a foundation administrative fee of $1,200 and an Investment management fees of $400 each year. So my advice is be sure and understand what percentage the organization is using for admin fees and what percentage goes to the students before setting up the scholarship.
Topic Author
ThankYouJack
Posts: 3671
Joined: Wed Oct 08, 2014 7:27 pm

Re: Anyone leaving behind a scholarship fund?

Post by ThankYouJack »

LMBFlorida wrote: Tue Mar 05, 2019 10:51 pm My Grandfather set up a scholarship in my fathers name when he passed away a number of years ago. This is given to a high school graduate each year and managed by a local foundation in the area that manages these types of scholarships. My grandfather has since passed and I get the yearly letter providing update and status. I actually received the 2018 documentation this week. The value of the endowment is about 100K and they provide a scholarship of about 4K each year. For this service they take a foundation administrative fee of $1,200 and an Investment management fees of $400 each year. So my advice is be sure and understand what percentage the organization is using for admin fees and what percentage goes to the students before setting up the scholarship.
Thanks for the feedback. Those fees seem pretty reasonable to me.
miamivice
Posts: 2259
Joined: Tue Jun 11, 2013 11:46 am

Re: Anyone leaving behind a scholarship fund?

Post by miamivice »

I will not be.

In high school, I remember that about 80% of the merit based private/community scholarships went to the same 5 girls, who were pretty and also had good grades. They also came from affluent families who did not need financial help for college, but the girls were competitive and wanted the attention of being winners.

Then about 80% of the need based scholarships went to a similar set of kids whose families claimed finance. Our family was too wealthy to claim financial need, and I don't know much about those winners but I don't think they were spread around too much.

I sort of thought there should be a rule against winning more than 1 scholarship.

I don't wish for my money to be given to competitive kids who come from rich families who don't need the money in the first place, so I will not be leaving behind a scholarship fund.
Gill
Posts: 6976
Joined: Sun Mar 04, 2007 8:38 pm
Location: Florida

Re: Anyone leaving behind a scholarship fund?

Post by Gill »

ThankYouJack wrote: Wed Mar 06, 2019 6:42 pm
LMBFlorida wrote: Tue Mar 05, 2019 10:51 pm My Grandfather set up a scholarship in my fathers name when he passed away a number of years ago. This is given to a high school graduate each year and managed by a local foundation in the area that manages these types of scholarships. My grandfather has since passed and I get the yearly letter providing update and status. I actually received the 2018 documentation this week. The value of the endowment is about 100K and they provide a scholarship of about 4K each year. For this service they take a foundation administrative fee of $1,200 and an Investment management fees of $400 each year. So my advice is be sure and understand what percentage the organization is using for admin fees and what percentage goes to the students before setting up the scholarship.
Thanks for the feedback. Those fees seem pretty reasonable to me.
1.6% seems rather stiff. Combined with the scholarship it is a 5.6% drain on the fund which may not be sustainable in perpetuity.
Gill
Cost basis is redundant. One has a basis in an investment | One advises and gives advice | One should follow the principle of investing one's principal
User avatar
Taylor Larimore
Advisory Board
Posts: 30196
Joined: Tue Feb 27, 2007 8:09 pm
Location: Miami FL

Re: Anyone leaving behind a scholarship fund?

Post by Taylor Larimore »

ThankYouJack.

Every year my live-in-partner gives a college scholarship to the high school graduates in one of our black community churches. It makes me very proud.

Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle
GoldenFinch
Posts: 2334
Joined: Mon Nov 10, 2014 11:34 pm

Re: Anyone leaving behind a scholarship fund?

Post by GoldenFinch »

miamivice wrote: Wed Mar 06, 2019 6:48 pm I will not be.

In high school, I remember that about 80% of the merit based private/community scholarships went to the same 5 girls, who were pretty and also had good grades. They also came from affluent families who did not need financial help for college, but the girls were competitive and wanted the attention of being winners.

Then about 80% of the need based scholarships went to a similar set of kids whose families claimed finance. Our family was too wealthy to claim financial need, and I don't know much about those winners but I don't think they were spread around too much.

I sort of thought there should be a rule against winning more than 1 scholarship.

I don't wish for my money to be given to competitive kids who come from rich families who don't need the money in the first place, so I will not be leaving behind a scholarship fund.
Your post made me think of a teacher at our local high school who gives out a scholarship every year to a student he hand picks for their creativity and unique individual characteristics. The student is usually someone who messed up some how during ninth and tenth grade and then turned themselves around. The teacher presents the scholarship himself and always glows with pride during the ceremony. It’s a bit different from the rest and is very nice to watch.
staythecourse
Posts: 6993
Joined: Mon Jan 03, 2011 9:40 am

Re: Anyone leaving behind a scholarship fund?

Post by staythecourse »

MathWizard wrote: Tue Mar 05, 2019 6:57 pm

The Univ. runs it all through their planned giving program.
Their minimum for an endowed scholarship fund is $50K .

From their site:
Typically, an endowment lives in perpetuity, but those who establish a named endowment can set its lifespan. Individual endowment funds with the Foundation are pooled together for investment purposes, yet each endowment maintains its own identity and separate accounting. Donors and their successors may receive an annual report of earnings and distributions. Earnings from the pool are allocated to each fund based on a weighted average calculation. Amounts available for distribution are calculated annually using a spending formula consisting of a percentage of each fund’s average market value over a period of time.
That does not sound promising. If it is thrown in with the rest of the endowment investments who knows where it is invested. The purpose is to make the scholarship as strong as possible financially and universities have shown less then average results with the investment plans.

Personally, as I mentioned on another thread my goal is to leave ALL of my money to my own charity. Have it clearly spelled out how the investments would be done, i.e. boglehead approach. Have the distributions given out to scholarships. Have my kids sit on the board and make some small salary to run it and decide on the folks who win the scholarship based on parameters (need/ academic basis). This way it insures the best possible growth of that money, helps folks who are in need, AND gives money to heirs through doing charitable work and not just a handout since they won the genetic lottery.

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle
miamivice
Posts: 2259
Joined: Tue Jun 11, 2013 11:46 am

Re: Anyone leaving behind a scholarship fund?

Post by miamivice »

staythecourse wrote: Wed Mar 06, 2019 8:57 pmPersonally, as I mentioned on another thread my goal is to leave ALL of my money to my own charity. Have it clearly spelled out how the investments would be done, i.e. boglehead approach. Have the distributions given out to scholarships. Have my kids sit on the board and make some small salary to run it and decide on the folks who win the scholarship based on parameters (need/ academic basis). This way it insures the best possible growth of that money, helps folks who are in need, AND gives money to heirs through doing charitable work and not just a handout since they won the genetic lottery.
There are a bunch of issues with what you describe.

1. You're controlling from the grave, especially by trying to tie the hands on how the money is invested by the board.

2. There may be legal issues with trying to specify the board must be made up of your kids. That may disqualify it from being a charity.

3. Your kids may not want to be on the board, in which case who would run the charity?

4. I think the board would need the freedom to specify the salaries of running the operation, to ensure that someone was interested.

Overall your plan sounds highly controlling.
staythecourse
Posts: 6993
Joined: Mon Jan 03, 2011 9:40 am

Re: Anyone leaving behind a scholarship fund?

Post by staythecourse »

miamivice wrote: Wed Mar 06, 2019 9:04 pm
staythecourse wrote: Wed Mar 06, 2019 8:57 pmPersonally, as I mentioned on another thread my goal is to leave ALL of my money to my own charity. Have it clearly spelled out how the investments would be done, i.e. boglehead approach. Have the distributions given out to scholarships. Have my kids sit on the board and make some small salary to run it and decide on the folks who win the scholarship based on parameters (need/ academic basis). This way it insures the best possible growth of that money, helps folks who are in need, AND gives money to heirs through doing charitable work and not just a handout since they won the genetic lottery.
There are a bunch of issues with what you describe.

1. You're controlling from the grave, especially by trying to tie the hands on how the money is invested by the board.

2. There may be legal issues with trying to specify the board must be made up of your kids. That may disqualify it from being a charity.

3. Your kids may not want to be on the board, in which case who would run the charity?

4. I think the board would need the freedom to specify the salaries of running the operation, to ensure that someone was interested.

Overall your plan sounds highly controlling.
Absolutely it is. I made the money so I can do whatever I want with it. If I wanted to light it on fire that is my choice. Of course, I have not done my DD on the idea but know it can easily see be done. How do you think Susan B. Komen was making 500k+ as the CEO of her own charity?

This idea of not controlling money from the grave makes no sense to me since I made the money and an already deciding who get it and have no issues with it. If you do good for you. I don't. I have more of an issue giving money to your kids for doing nothing but being my progeny. But then again I wrote myself out of a 7 digit inheritance from my own parents at my request so guess I am not "norm". I want to make sure the money helps those that I think need it. If my kids don't want to be part of it then no problem someone else will run it and they won't get anything.

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle
drzzzzz
Posts: 596
Joined: Sat Sep 22, 2012 9:56 pm

Re: Anyone leaving behind a scholarship fund?

Post by drzzzzz »

We have set up three scholarships at both colleges and universities. Two of the places had a matching scholarship program since they were trying to grow the schools endowments and scholarships and therefore matched every dollar that we committed to donate effectively doubling the size of the scholarship that can be given out each year. As many have mentioned, depending on the size you are talking about, you can name the scholarship as you see fit and also set it up to fit your interests (if you like), as long as they don't conflict with non-discrimination rules. We also made our initial scholarship pleges over a 5 year period although. We get invited to a yearly scholarship dinner/reception and if you decide to go, you get to meet the scholarship recipient as well. Every year, the scholarship recipients usually send you a personal note of thanks explaining why they needed the scholarship and since our's are based on financial need as one of the criteria, the stories are very humbling and gratifying.
Irisheyes
Posts: 312
Joined: Wed Feb 14, 2018 1:36 pm

Re: Anyone leaving behind a scholarship fund?

Post by Irisheyes »

miamivice wrote: Wed Mar 06, 2019 6:48 pm I will not be.

In high school, I remember that about 80% of the merit based private/community scholarships went to the same 5 girls, who were pretty and also had good grades. They also came from affluent families who did not need financial help for college, but the girls were competitive and wanted the attention of being winners.

Then about 80% of the need based scholarships went to a similar set of kids whose families claimed finance. Our family was too wealthy to claim financial need, and I don't know much about those winners but I don't think they were spread around too much.

I sort of thought there should be a rule against winning more than 1 scholarship.

I don't wish for my money to be given to competitive kids who come from rich families who don't need the money in the first place, so I will not be leaving behind a scholarship fund.
What an unpleasantly jaundiced view. The students had good grades, and you claim that was not because of anything as prosaic as hard work, but instead because they were "competitive" (should high school students not be?) and "wanted attention"?

I'm not at all sure what their gender or looks has to do with it. They got the grades (per your information), and therefore, they got the merit scholarships. Getting the grades takes work, notwithstanding your convoluted rationale for why they got the scholarships and you (apparently) did not.

I have been thinking about a scholarship fund for my kid's high school. It is so strapped for cash though that I've also wondered whether it might be better to just donate the funds to the school for their ongoing operations, rather than earmark it for one or a few students.
miamivice
Posts: 2259
Joined: Tue Jun 11, 2013 11:46 am

Re: Anyone leaving behind a scholarship fund?

Post by miamivice »

Irisheyes wrote: Wed Mar 06, 2019 9:35 pm
miamivice wrote: Wed Mar 06, 2019 6:48 pm I will not be.

In high school, I remember that about 80% of the merit based private/community scholarships went to the same 5 girls, who were pretty and also had good grades. They also came from affluent families who did not need financial help for college, but the girls were competitive and wanted the attention of being winners.

Then about 80% of the need based scholarships went to a similar set of kids whose families claimed finance. Our family was too wealthy to claim financial need, and I don't know much about those winners but I don't think they were spread around too much.

I sort of thought there should be a rule against winning more than 1 scholarship.

I don't wish for my money to be given to competitive kids who come from rich families who don't need the money in the first place, so I will not be leaving behind a scholarship fund.
What an unpleasantly jaundiced view. The students had good grades, and you claim that was not because of anything as prosaic as hard work, but instead because they were "competitive" (should high school students not be?) and "wanted attention"?

I'm not at all sure what their gender or looks has to do with it. They got the grades (per your information), and therefore, they got the merit scholarships. Getting the grades takes work, notwithstanding your convoluted rationale for why they got the scholarships and you (apparently) did not.

I have been thinking about a scholarship fund for my kid's high school. It is so strapped for cash though that I've also wondered whether it might be better to just donate the funds to the school for their ongoing operations, rather than earmark it for one or a few students.
Oh, what I wrote doesn't sound nice but it is a truthful statement.

One of the winners in particular was the town prima donna. Her family was worth probably $20 million or so (more like maybe $50 million today). I started paying attention to her shoes about 3 months before high school graduation, and she wore a different pair every day for at least two months. She loved the attention, so she applied for a $1000 scholarship and won it.

Yes, she was more qualified than me. But my dad wasn't paying very much for college, and I really needed the money. He was too proud or had too much money - I don't know which - for me to apply for "need based scholarships" but he didn't exactly have much for my college. If I recall right, he had about $20,000 set aside and this was year 2000. He thought that was "plenty".

So, I really needed scholarships. This other person didn't, but loved the attention. She won a lot. Later, when she got married, she had a big affair and probably spend $30,000 on her wedding.

I remember one other applicant. That scholarship committee had an awards night where they invited all of the applicants to a meeting and announced who the winner was at the meeting. You had to be present to be awarded the scholarship. They handed our applications back to us. There was a very large statement in the application "Please do not include a photograph of the applicant." The girl next to me had a photograph of herself on the application. She won; I did not. Maybe she was more qualified or maybe the committee thought she was pretty. I've never know.

Anyways, I just post my comments here because while giving scholarship money sounds generous, I am not sure that the merit based scholarships in my community really went to the places that could have benefitted from them most.
SGM
Posts: 3100
Joined: Wed Mar 23, 2011 4:46 am

Re: Anyone leaving behind a scholarship fund?

Post by SGM »

Last year we delivered a large check to one of the top rated women's colleges in the country as directed by a will. About 85 years earlier the decedent had received a full 4 year scholarship including the junior year abroad and was based on need and grades. Her father had died when she was 12 and she could never have attended the college without a scholarship. She graduated at the top of her college class. An employee asked why she hadn't informed them of the gift when she was alive. The reason was that she didn't want to be hounded for additional money. The school employees were gracious and gave us an extensive tour, lunch and admission to the excellent art museum. They also gave us whatever information they could find about her and her graduating class.

We were assured that the donation would be used for scholarships as designated in the will.
Cruise
Posts: 1189
Joined: Mon Nov 21, 2016 7:17 pm

Re: Anyone leaving behind a scholarship fund?

Post by Cruise »

My wife and I plan on donating funds sufficient to establish two free-ride in-state scholarships at our State U. One will go to kids who are over-achievers that come from poor families. The other one will go to kids of fallen heros. We plan on donating to the foundation established by the university.
MathWizard
Posts: 4536
Joined: Tue Jul 26, 2011 1:35 pm

Re: Anyone leaving behind a scholarship fund?

Post by MathWizard »

staythecourse wrote: Wed Mar 06, 2019 8:57 pm
MathWizard wrote: Tue Mar 05, 2019 6:57 pm

The Univ. runs it all through their planned giving program.
Their minimum for an endowed scholarship fund is $50K .

From their site:
Typically, an endowment lives in perpetuity, but those who establish a named endowment can set its lifespan. Individual endowment funds with the Foundation are pooled together for investment purposes, yet each endowment maintains its own identity and separate accounting. Donors and their successors may receive an annual report of earnings and distributions. Earnings from the pool are allocated to each fund based on a weighted average calculation. Amounts available for distribution are calculated annually using a spending formula consisting of a percentage of each fund’s average market value over a period of time.
That does not sound promising. If it is thrown in with the rest of the endowment investments who knows where it is invested. The purpose is to make the scholarship as strong as possible financially and universities have shown less then average results with the investment plans.

Personally, as I mentioned on another thread my goal is to leave ALL of my money to my own charity. Have it clearly spelled out how the investments would be done, i.e. boglehead approach. Have the distributions given out to scholarships. Have my kids sit on the board and make some small salary to run it and decide on the folks who win the scholarship based on parameters (need/ academic basis). This way it insures the best possible growth of that money, helps folks who are in need, AND gives money to heirs through doing charitable work and not just a handout since they won the genetic lottery.

Good luck.
I did not see (or maybe just did not remember) that you planned on leaving all your money in a charitable trust.
You are clearly looking at a much bigger amount than I am. That could certainly make a difference.

For the amount I am thinking of, having someone else do all the work seemed more efficient to me.
The amount I got in a scholarship seemed huge to me then, now (even in inflation adjusted terms) it is not that much to
be worth a lot of effort on my part or on the part of my hiers.

The person from whom I got a scholarship did the same, so it seemed to make the most sense for me.

Good luck with the charity. Getting the scholarship allowed me to go to college, I'm sure you will
be helping lots of people with that aspect of the charity. Though I give to other charities, I've been
trying to decide how best I can increase someone's human capital, assuming that they will pay it forward
for one or two more people. In that way, the effects are compounded.
staythecourse
Posts: 6993
Joined: Mon Jan 03, 2011 9:40 am

Re: Anyone leaving behind a scholarship fund?

Post by staythecourse »

MathWizard wrote: Thu Mar 07, 2019 2:06 pm Though I give to other charities, I've been
trying to decide how best I can increase someone's human capital, assuming that they will pay it forward
for one or two more people. In that way, the effects are compounded.
Agreed. The pay it forward idea is what I want to accomplish as well. It would be a great opportunity to make a lasting impression after I pass. Now how to do it is a mystery to me as I am not anywhere near thinking of it (just early 40's). Just have to figure out how to do it when the time comes. I've talked to a few folks with advanced degrees in education and educational inequalities and had some informal discussions on how to address it. Still in the informational gathering stage.

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle
DrGoogle2017
Posts: 2528
Joined: Mon Aug 14, 2017 12:31 pm

Re: Anyone leaving behind a scholarship fund?

Post by DrGoogle2017 »

Thanks for giving me some ideas. I had 4 small scholarships at high school, I’m thinking of giving some to my high school and my alma mater. Just try to get enough inertia to get going.
JGoneRiding
Posts: 1973
Joined: Tue Jul 15, 2014 3:26 pm

Re: Anyone leaving behind a scholarship fund?

Post by JGoneRiding »

ThankYouJack wrote: Tue Mar 05, 2019 8:13 pm Thanks all. I was thinking in terms of my high school and not my alma mater.
Most high schools are still prepared to deal with it. The "TYJ scholarship available to high schools seniors pursuing xyz study with a such and such GPA "

I had one from my mom's high school alma mater. Some of the paperwork was a little odd but it was on ly available to heirs of graduates and the alumni association ran it (the high school itself had closed so this was why not ne w grads from the high school itself)
Lookingforanswers
Posts: 61
Joined: Sun May 06, 2018 4:39 pm

Re: Anyone leaving behind a scholarship fund?

Post by Lookingforanswers »

[deleted]
Last edited by Lookingforanswers on Thu Dec 17, 2020 11:33 pm, edited 2 times in total.
staythecourse
Posts: 6993
Joined: Mon Jan 03, 2011 9:40 am

Re: Anyone leaving behind a scholarship fund?

Post by staythecourse »

Lookingforanswers wrote: Fri Mar 08, 2019 3:15 am Hi - my wife and I did this several years ago and it's one of the best things we've done. We had been steadily giving bits of money to various charities but decided to focus our energy on a single cause and ended up setting up an endowed scholarship fund at the university we both attended.

It was simple: we met with the development officer, and made a five-year pledge to put in enough money to hit this university's endowment level. During the first five years, we added some extra money that allowed them to start granting a small scholarship each year; this money went to students but didn't add to the endowed fund itself. Witnessing the students get the money helped encourage us to keep going and hit our pledge. Once we got the fund endowed after five years, we decided to keep going, and now 10 years after we started it's continued to grow, and it's still our favorite charity. We feel like we're "paying forward" the aid we got in college; the institution we're supporting doesn't have a lot of other money; we trust the institution to do the right thing with the money in the long term; and we know the students (and their parents) appreciate it because we get to meet them at the annual scholarship award ceremony.

If you're thinking about putting this in your will, I guess I'd encourage you to consider whether you can spare the money now, and steadily contribute to a fund at the institution of your choice to get it going. It feels good to do something that will help people after you die, but it's a great experience to witness your impact while you're still alive.

One thing to consider -- after some thought and research we decided not to put too many strings attached to the scholarship. An endowed scholarship is permanent, and I read a few horror stories about endowment funds that college struggle to spend because the donors put so many strings on the scholarship many years ago, when the funds were established, that the colleges have to search for recipients that qualify. We confined our scholarship to a particular academic discipline my wife and I both support, but otherwise left it open for the institution to pick the winners.

[my first Boglehead post!]
Welcome aboard.

Does you money just get comingled with the rest of the endowment money for their investment purposes? That is the part that irks me. We already know that endowments returns are high cost AND under perform which is what prevents me from just giving it to them to hold when they are not the best at managing their own investments. Does that bother you?

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle
jebmke
Posts: 11965
Joined: Thu Apr 05, 2007 2:44 pm
Location: Delmarva Peninsula

Re: Anyone leaving behind a scholarship fund?

Post by jebmke »

miamivice wrote: Wed Mar 06, 2019 9:04 pm
staythecourse wrote: Wed Mar 06, 2019 8:57 pmPersonally, as I mentioned on another thread my goal is to leave ALL of my money to my own charity. Have it clearly spelled out how the investments would be done, i.e. boglehead approach. Have the distributions given out to scholarships. Have my kids sit on the board and make some small salary to run it and decide on the folks who win the scholarship based on parameters (need/ academic basis). This way it insures the best possible growth of that money, helps folks who are in need, AND gives money to heirs through doing charitable work and not just a handout since they won the genetic lottery.
There are a bunch of issues with what you describe.

1. You're controlling from the grave, especially by trying to tie the hands on how the money is invested by the board.

2. There may be legal issues with trying to specify the board must be made up of your kids. That may disqualify it from being a charity.

3. Your kids may not want to be on the board, in which case who would run the charity?

4. I think the board would need the freedom to specify the salaries of running the operation, to ensure that someone was interested.

Overall your plan sounds highly controlling.
I am on a couple of advisory boards for some local charitable organizations. By policy, they both avoid small, private foundations because of the risk associated with foundation mismanagement and subsequent bad press.
When you discover that you are riding a dead horse, the best strategy is to dismount.
staythecourse
Posts: 6993
Joined: Mon Jan 03, 2011 9:40 am

Re: Anyone leaving behind a scholarship fund?

Post by staythecourse »

jebmke wrote: Fri Mar 08, 2019 11:21 am
miamivice wrote: Wed Mar 06, 2019 9:04 pm
staythecourse wrote: Wed Mar 06, 2019 8:57 pmPersonally, as I mentioned on another thread my goal is to leave ALL of my money to my own charity. Have it clearly spelled out how the investments would be done, i.e. boglehead approach. Have the distributions given out to scholarships. Have my kids sit on the board and make some small salary to run it and decide on the folks who win the scholarship based on parameters (need/ academic basis). This way it insures the best possible growth of that money, helps folks who are in need, AND gives money to heirs through doing charitable work and not just a handout since they won the genetic lottery.
There are a bunch of issues with what you describe.

1. You're controlling from the grave, especially by trying to tie the hands on how the money is invested by the board.

2. There may be legal issues with trying to specify the board must be made up of your kids. That may disqualify it from being a charity.

3. Your kids may not want to be on the board, in which case who would run the charity?

4. I think the board would need the freedom to specify the salaries of running the operation, to ensure that someone was interested.

Overall your plan sounds highly controlling.
I am on a couple of advisory boards for some local charitable organizations. By policy, they both avoid small, private foundations because of the risk associated with foundation mismanagement and subsequent bad press.
Why would this impact the small private foundation from setting up its OWN charity and scholarships. It would seem this is another reason to do such as thing and not rely on other charities to help (sounds sad to even type that).

Just curious, why would it lead to subsequent bad press? I would think a charity who are ALWAYS looking for money not taking money from a legal foundation is worse press. Basically, denying services that could have been offered if they had more money. That doesn't make sense to me. I must be missing something?

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle
User avatar
dm200
Posts: 23148
Joined: Mon Feb 26, 2007 2:21 pm
Location: Washington DC area

Re: Anyone leaving behind a scholarship fund?

Post by dm200 »

I grew up in a low income, rural area. I was very fortunate that my otherwise very frugal parents were able to pay the tuition and all expenses for me to attend a more expensive private university. Lots of others from that area/community, for varied reasons, are not as fortunate.

I moved away from that area many decades ago, but still have family and acquaintances there. The area, now, is even more financially challenged than when I was in High School. My public High School "Alumni Association" was started a few years ago and one big function it does is "manage" and fund many, many different types of higher education scholarships for graduates of that High School. Some of these are "memorial" scholarships in memory of students who died young and/or in tragic circumstances. Some are just general scholarships to deserving students and some are for specific occupational education, such as Nursing School, etc. My late Uncle and Aunt were longtime and successful operators of their family farm for over 60 years. Their children and grandchildren, upon the deaths of my Uncle and Aunt, generously funded an annual Higher education (usually college) scholarship - named in their memory - for High School graduates pursuing Higher Education in Agriculture/farming.

My opinion is that the "easy part" of establishing a scholarship fund is the money part. If you have the money, you fund it.

The hard or challenging part is the administration of the funding of scholarships over the long term. You probably would not want to have someone or some organization managing scholarships where the person or organization had ZERO knowledge, experience or capacity to do so. My opinion is that organizations like my High School Alumni Association has that experience, knowledge and capacity.
jebmke
Posts: 11965
Joined: Thu Apr 05, 2007 2:44 pm
Location: Delmarva Peninsula

Re: Anyone leaving behind a scholarship fund?

Post by jebmke »

There have been a couple of private foundations in the press recently (small town, rich people) that have been scrutinized for potential fraudulent activity (e.g., one of them pays for their board members to fly to Florida for board meetings every winter. The board members are relatives). The local charities (service providers) don't want to have any association with this bad press. Their are plenty of alternatives including a very strong community foundation as well as very large private foundations (9+ figure).
Last edited by jebmke on Fri Mar 08, 2019 11:33 am, edited 1 time in total.
When you discover that you are riding a dead horse, the best strategy is to dismount.
Nowizard
Posts: 3141
Joined: Tue Oct 23, 2007 5:33 pm

Re: Anyone leaving behind a scholarship fund?

Post by Nowizard »

If you have the funds and contact the source that will be involved in awarding the scholarship, you will receive more than enough responses on setting it up. In fact you will continue to receive responses until you do or make it clear you have moved on. We established a small one with family that provides a partial scholarship to the recipient.

Tim
KlangFool
Posts: 19109
Joined: Sat Oct 11, 2008 12:35 pm

Re: Anyone leaving behind a scholarship fund?

Post by KlangFool »

Folks,

This is a unique feature of my culture. A similar structure may or may not exist in your culture. My family goes back 2000+ years. My family clan association existed all over the world. So, through the generations, many rich folks within my family donated their wealth to the clan association. Then, the clan association provided merit scholarship to folks with the same family name and donated money to various charities within the local communities. The various chapters of the clan associations had been around for decades to a few hundred years.

So, one of the options that are available to me is to donate my money to my clan association.

KlangFool
Lookingforanswers
Posts: 61
Joined: Sun May 06, 2018 4:39 pm

Re: Anyone leaving behind a scholarship fund?

Post by Lookingforanswers »

[/quote]
Does you money just get comingled with the rest of the endowment money for their investment purposes? That is the part that irks me. We already know that endowments returns are high cost AND under perform which is what prevents me from just giving it to them to hold when they are not the best at managing their own investments. Does that bother you?

[/quote]

I agree with your point; if I invested the funds Bogle-head style I might be able to outperform the Endowment Fund (I think they plan on a long-term return of 5.5%, after taking into account all their expenses]. But I look at this way: our fund has been distributing scholarships now for 10 years. I hope I have another 25 or 30 years to live. That means by the time I die I get to see 40 years of scholarships handed out, and 40 years of students get the help. I get benefit from that.

Also, I understand that the Endowment Fund itself uses some of the expenses they take to raise more money. I realize that's a drag on the performance of their funds, but it's also a multiplier: they have to spend some of the money they take into to go raise more. While not saying they're perfect, they probably do that at a scale and with efficiency that I couldn't match, so I don't really mind that part of my contributions go to support the fund-raising engine they've built.
User avatar
dm200
Posts: 23148
Joined: Mon Feb 26, 2007 2:21 pm
Location: Washington DC area

Re: Anyone leaving behind a scholarship fund?

Post by dm200 »

I can fund my High School Alumni Association scholarship fund by "grants" from my Fidelity DAF.
flyingaway
Posts: 3169
Joined: Fri Jan 17, 2014 10:19 am

Re: Anyone leaving behind a scholarship fund?

Post by flyingaway »

I have not been a business owner or even a high-salaried manager in a business. So i do not plan to work too much to have a large surplus. If I do have something left, my children will inherit.
However, if I won a $10M lottery, I will certainly donate some money to support poor students, not the professors. Unfortunately, I do not play lottery.
SRenaeP
Posts: 1004
Joined: Tue Jan 19, 2010 9:05 pm

Re: Anyone leaving behind a scholarship fund?

Post by SRenaeP »

miamivice wrote: Wed Mar 06, 2019 6:48 pm I will not be.

In high school, I remember that about 80% of the merit based private/community scholarships went to the same 5 girls, who were pretty and also had good grades. They also came from affluent families who did not need financial help for college, but the girls were competitive and wanted the attention of being winners.

Then about 80% of the need based scholarships went to a similar set of kids whose families claimed finance. Our family was too wealthy to claim financial need, and I don't know much about those winners but I don't think they were spread around too much.

I sort of thought there should be a rule against winning more than 1 scholarship.

I don't wish for my money to be given to competitive kids who come from rich families who don't need the money in the first place, so I will not be leaving behind a scholarship fund.
Perhaps you don't realize that you can set your own criteria for a scholarship fund provided it's not discriminatory. In years past, I recall seeing lists of 'odd' scholarships for people who are left-handed; have red hair; the last name Doe; etc.
User avatar
dm200
Posts: 23148
Joined: Mon Feb 26, 2007 2:21 pm
Location: Washington DC area

Re: Anyone leaving behind a scholarship fund?

Post by dm200 »

SRenaeP wrote: Mon Mar 11, 2019 3:18 pm
miamivice wrote: Wed Mar 06, 2019 6:48 pm I will not be.
In high school, I remember that about 80% of the merit based private/community scholarships went to the same 5 girls, who were pretty and also had good grades. They also came from affluent families who did not need financial help for college, but the girls were competitive and wanted the attention of being winners.
Then about 80% of the need based scholarships went to a similar set of kids whose families claimed finance. Our family was too wealthy to claim financial need, and I don't know much about those winners but I don't think they were spread around too much.
I sort of thought there should be a rule against winning more than 1 scholarship.
I don't wish for my money to be given to competitive kids who come from rich families who don't need the money in the first place, so I will not be leaving behind a scholarship fund.
Perhaps you don't realize that you can set your own criteria for a scholarship fund provided it's not discriminatory. In years past, I recall seeing lists of 'odd' scholarships for people who are left-handed; have red hair; the last name Doe; etc.
Yes - my High School Alumni association (I posted about this earlier) manages many scholarships - most of which have some specific requirements. Two (of many examples) are nursing school scholarships and Agricultural school scholarships.
jdb
Posts: 1698
Joined: Wed Dec 05, 2012 8:21 pm

Re: Anyone leaving behind a scholarship fund?

Post by jdb »

Yes. My wife and I endowed a scholarship at an Ivy league school attended by two of our children, we named it in honor of one of the neuroscience professors who was an inspiration and mentor to our son, our names not attached, the professor and his department choose recipients, every year we receive nice thank you letters from recipients. Best charitable act we have done, are planning to increase the endowment. Good luck.
User avatar
1210sda
Posts: 1788
Joined: Wed Feb 28, 2007 8:31 am

Re: Anyone leaving behind a scholarship fund?

Post by 1210sda »

Thank you, "ThankyouJack".

For me, this is an incredibly well timed post. I'd been thinking about doing this for some time now and your post has inspired me to move forward with this.

Lots of good suggestions in the rest of the posts as well.

1210
Topic Author
ThankYouJack
Posts: 3671
Joined: Wed Oct 08, 2014 7:27 pm

Re: Anyone leaving behind a scholarship fund?

Post by ThankYouJack »

1210sda wrote: Mon Mar 11, 2019 5:36 pm Thank you, "ThankyouJack".

For me, this is an incredibly well timed post. I'd been thinking about doing this for some time now and your post has inspired me to move forward with this.

Lots of good suggestions in the rest of the posts as well.

1210
Glad it help. Thanks to all the responders too. Lots of great people on here doing great things with their $ . It's inspiring.
Bfwolf
Posts: 2053
Joined: Thu Oct 14, 2010 11:19 am

Re: Anyone leaving behind a scholarship fund?

Post by Bfwolf »

I think the motivation to help lower income people with high potential live up to their possibilities is admirable. If I may be so bold though, there is a lot of money already invested in US college education financial aid to help those with high potential but lower resources get a fair shot.

If one thinks more broadly about the opportunity to help in this area, I think you'll get more bang for your buck overseas. I visited the School of St Jude in Tanzania, which gives a free English education to the poorest, brightest children in the city of Arusha. These kids would have a near zero shot of doing anything that even begins to capture their potential without this education as public school in Tanzania is terrible. But with this free education, they almost all end up at university.

So you could set up an endowment that provided a small partial scholarship to a college bound US student who, with enough brains and drive, would probably find a way with or without your scholarship. Or for the same price, you can pay for the full tuition of an extremely intelligent primary/secondary school student in Africa who would otherwise almost certainly end up languishing in poverty their entire lives.

Here's a link to the segment 60 Minutes did on the School of St Jude. https://www.youtube.com/watch?v=pYZqkTPmXQE&t=9s

I speak of the School of St Jude because I visited it and was impressed, but there are probably similar ventures in other extremely poor areas.
User avatar
Sandtrap
Posts: 12455
Joined: Sat Nov 26, 2016 6:32 pm
Location: Hawaii No Ka Oi , N. Arizona
Contact:

Re: Anyone leaving behind a scholarship fund?

Post by Sandtrap »

My mother, and also an elder friend long passed, both set up Scholarship Funds at the University of Hawaii after they passed.
You can contact a university or school and they will help you sort out the details.

I have a provision in my trust for an educational fund for future hares.
Wiki Bogleheads Wiki: Everything You Need to Know
staythecourse
Posts: 6993
Joined: Mon Jan 03, 2011 9:40 am

Re: Anyone leaving behind a scholarship fund?

Post by staythecourse »

Bfwolf wrote: Mon Mar 11, 2019 6:22 pm I think the motivation to help lower income people with high potential live up to their possibilities is admirable. If I may be so bold though, there is a lot of money already invested in US college education financial aid to help those with high potential but lower resources get a fair shot.

If one thinks more broadly about the opportunity to help in this area, I think you'll get more bang for your buck overseas. I visited the School of St Jude in Tanzania, which gives a free English education to the poorest, brightest children in the city of Arusha. These kids would have a near zero shot of doing anything that even begins to capture their potential without this education as public school in Tanzania is terrible. But with this free education, they almost all end up at university.

So you could set up an endowment that provided a small partial scholarship to a college bound US student who, with enough brains and drive, would probably find a way with or without your scholarship. Or for the same price, you can pay for the full tuition of an extremely intelligent primary/secondary school student in Africa who would otherwise almost certainly end up languishing in poverty their entire lives.

Here's a link to the segment 60 Minutes did on the School of St Jude. https://www.youtube.com/watch?v=pYZqkTPmXQE&t=9s

I speak of the School of St Jude because I visited it and was impressed, but there are probably similar ventures in other extremely poor areas.
My wife and already do that and it feels great last couple of years. We donate around $200 some dollars each month to our native country. It goes to a small orphanage for their daily food (rice/ milk) and for special vocational classes when they are available so they can learn a trade when they become adults.

The biggest issue of these though is it is VERY hard to verify that the money is going to the people you are trying to aid. I don't know why there isn't a platform out there via internet that checks all the interested charities on their authenticity before allowing them to solicit money. One of the truly unfortunate things no one has figured out is how to get the folks who WANT to share their wealth with those who are most at need. The Red Crosses, Unicef, etc.. get so much money it is insane yet these small nonprofits who really need the money get very little. Truly sad.

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle
KlangFool
Posts: 19109
Joined: Sat Oct 11, 2008 12:35 pm

Re: Anyone leaving behind a scholarship fund?

Post by KlangFool »

Folks,

May I suggest donating money to the food pantry of the university. Helping the poor starving college student instead of a scholarship.

https://ssac.gmu.edu/patriot-pantry/

KlangFool
miamivice
Posts: 2259
Joined: Tue Jun 11, 2013 11:46 am

Re: Anyone leaving behind a scholarship fund?

Post by miamivice »

SRenaeP wrote: Mon Mar 11, 2019 3:18 pm
miamivice wrote: Wed Mar 06, 2019 6:48 pm I will not be.

In high school, I remember that about 80% of the merit based private/community scholarships went to the same 5 girls, who were pretty and also had good grades. They also came from affluent families who did not need financial help for college, but the girls were competitive and wanted the attention of being winners.

Then about 80% of the need based scholarships went to a similar set of kids whose families claimed finance. Our family was too wealthy to claim financial need, and I don't know much about those winners but I don't think they were spread around too much.

I sort of thought there should be a rule against winning more than 1 scholarship.

I don't wish for my money to be given to competitive kids who come from rich families who don't need the money in the first place, so I will not be leaving behind a scholarship fund.
Perhaps you don't realize that you can set your own criteria for a scholarship fund provided it's not discriminatory. In years past, I recall seeing lists of 'odd' scholarships for people who are left-handed; have red hair; the last name Doe; etc.
Um, it's my money and I will do what I want with it. Yes, I am well aware that one can create a criteria (redhead would be discriminaratory becuase non-Caucasions would not qualify) but my experience is that they all generally have the same criteria which in my high school allowed the same 5 people to win scholarship after scholarship.

No thank you.
Bfwolf
Posts: 2053
Joined: Thu Oct 14, 2010 11:19 am

Re: Anyone leaving behind a scholarship fund?

Post by Bfwolf »

staythecourse wrote: Mon Mar 11, 2019 8:06 pm The biggest issue of these though is it is VERY hard to verify that the money is going to the people you are trying to aid. I don't know why there isn't a platform out there via internet that checks all the interested charities on their authenticity before allowing them to solicit money. One of the truly unfortunate things no one has figured out is how to get the folks who WANT to share their wealth with those who are most at need. The Red Crosses, Unicef, etc.. get so much money it is insane yet these small nonprofits who really need the money get very little. Truly sad.

Good luck.
Givewell is an excellent source for charities in the developing world that have to prove their results, cost-effectiveness, transparency, and their ability to use more funding before Givewell will recommend them. They only recommend a handful of charities. None of their recommended charities fall into the education realm, as the academic literature is thin on this front. https://www.givewell.org/international/ ... /education
Post Reply