How to Endow a Scholarship and How Much Does It Cost?

One of the cooler and more rewarding ways of giving back is paying it forward.

Endowing a scholarship at a beloved place of higher education can be a great, and surprisingly cost-effective, way to do good in the world while also realizing a tax benefit.

You even have the benefit of creating an opportunity for a select group of folks who might not otherwise have it. Our good friend the White Coat Investor takes us through his experience of creating and endowing a scholarship at a popular university in his neck of the woods.

Endowing a university scholarship requires little effort, costs less than you might think, and allows you to be pretty specific about who gets the money. Many of you know about The White Coat Investor Medical School Scholarship program.

It is essentially an essay contest that gets close to 1,000 applications a year and is judged by dozens of blog readers. In 2020, five grand prize winners each took home $12,000 in cash and five second-prize winners took home $2,000 in cash. In 2021, we had 10 winners overall in the category of financial and inspiring stories.

The scholarship helps us to promote financial literacy and directly reduce the indebtedness of a few students each year. However, this scholarship program requires a lot of labor to run and requires annual fundraising.

What Is an Endowed Scholarship?

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Yes, an endowed scholarship will require more money than a regular scholarship—maybe $50,000 for an endowed scholarship, maybe $100,000—but the gift should last for much, much longer.

This is different from funding a regular scholarship, where you’d donate a set amount of money and it goes directly into a scholarship fund. The money isn’t invested. It’s just given to students directly. Yes, an endowed scholarship will require more money than a regular scholarship—maybe $50,000 for an endowed scholarship, maybe $100,000—but the gift should last for much, much longer.

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