Scholarships ->Establishing a Scholarship Fund July 3, 2008 Amendment 41 Establishing a Scholarship Fund Establishing a Scholarship Fund Scholarship Funds are an appealing way for individuals, families, businesses, and other groups of people to support education and strengthen the community.  Whether you create a new scholarship program or contribute to one of the many existing ones, your gift can help students - from preschool to postgraduate - achieve their lifetime dreams. How it works: Working with a member of our staff, and your financial advisor if you choose, you follow these simple steps:      1.  Identify the type of students you would like to assist and determine the best scholarship program           option for you.      2.  Complete a simple governing document.  Our staff will help you to complete a document that makes            your intentions clear.      3.  Select a name for the program.  You can use your name, the name of a family member, the name of           a favorite cause, or choose a name that allows you to remain anonymous.      4.  Make an initial gift.  You can give cash, appreciated stocks, real estate, or other assets.           Alternatively, you can leave a testamentary gift to help students after your lifetime.      5.  Receive a tax deduction at the time the fund is established and when you make additional           contributions to the fund.      6.  Work with our staff to determine the eligibility requirements, amount of awards, timeline, and other           program details. The Denver Foundation will invest your gift in our unitized investment pool.  This approach means your fund enjoys better investment management and greater diversification.  Our investment performance has been strong, averaging over 10% per year over the last ten years. We handle all of the administrative details related to the scholarship program including: advertising, printing and distribution of applications, inquiries from parents and students, application processing, scholar selection and notification, check processing, record-keeping, and more. Fees Moderate administrative fees are charged annually for all funds.  The general fees currently range from 1.15 to 2 percent and cover expenses related to the administration of the fund.  Because scholarship programs require a high level of additional administrative support, other fees are also charged on some types of scholarship funds (see below). Fund Options Option One Donor Advised Fund Minimum Investment: $25,000 With a Donor Advised Fund, you can recommend grants of any size to existing scholarship programs at schools or nonprofit organizations.  If you like, you can also recommend grants for other charitable purposes to the nonprofit organizations of your choice. Fees:  There are no additional fees Option Two Standard Scholarship Program Minimum Investment:  $100,000 Working with a Denver Foundation staff member, you determine the type of student you would like to benefit from the scholarship program and define the selection and eligibility criteria.  Then selected schools, organizations, or other entities nominate and select the scholarship recipients based on the guidelines that have been established.  The Denver Foundation reviews all students selected to ensure that the recipients meet the guidelines. Fees:  Program set up fees start at $2,000.  Annual program fee is a minimum of $500. Option Three Custom Scholarship Program Minimum Investment:  $500,000 Working with a Denver Foundation staff member, you can design a custom scholarship program.  A custom program might include a specialized student application and a selection committee that meets to evaluate and choose recipients.  In some cases, donors may serve on the selection committee. Fees:  Program set up fees start at $5,000.  Annual program fee is a minimum of $2,500. Other Important Details •  All scholarship recipients must be selected through a fair equitable, standardized, and non-discriminatory application or nomination process.  Scholarships cannot be issued to pre-selected individuals. •  Students who are related to, or have a financial relationship with, a donor to the fund or a selection committee member are not eligible to receive a scholarship. •  By law, all selection committee members must be appointed by The Denver Foundation.  Donors, their family members, and other individuals recommended by a donor may sometimes serve on the selection committee provided they make up a minority of the committee and do not control the committee, directly or indirectly. •  All scholarship award recommendations must be approved by The Denver Foundation.  Selection committee members should understand that their recommendations are advisory and will not be binding on the Foundation, which by law must retain final responsibility for all distributions made from the Foundation. •  A fund's balance must be able to cover all of the promised scholarships before application or nomination forms are distributed. •  The minimum scholarship grant size is $2,000 per student/per year.  Larger grants are encouraged. •  Scholarships can support any area of academic need.  Students who are degree candidates will generally not incur tax liability for amounts applied toward tuition, books, and fees required for enrollment and attendance at their educational institution.  Amounts used for incidental expenses, such as room and board, travel, and non-required equipment, or for non-degree courses may be considered taxable income.  All scholarship awards are paid directly to a recipient's school. •  Scholarship programs can be established to assist the employees of a certain organization (or the children of employees).  If you are interested in a program of this type, please ask us for information about the additional rules that apply to these programs. If you have questions or are interested in establishing a scholarship program, please contact Karen Bellina of The Philanthropic Services Group of The Denver Foundation at (303) 996-7348 or kbellina@denverfoundation.org.