Hi, I am interested in funding a scholarship each year for a qualified high school student in my home town. I would of course have an application with unbiased requirements (GPA, college major, extracurricular activities, etc) but I would like to make the final selection, or at least the majority vote. I understand that the majority of scholarship funds are endowments that operate perpetually from interest earned and independently operated. My problem is that I am only 23 and do not have enough capital at this time to start such a large fund but would like to in the future. I understand that I can still donate money each year (likely around $300-500) to a student of my choosing via a scholarship, but since I am doing it I would like to know if there any tax benefits that I can take advantage of? I will be funding the scholarship with my active income or capital gains income for the near future. Also have you heard of anyone using a letter of credit or assurance from a bank in place of an endowment fund, in case the school would like collateral (not sure that they would, but just curious)?
Thank you so much for your help, I sincerely appreciate it!
Other info: Wisconsin Resident, income range $75-110k, capital gains would be enough to fund the scholarship each year.
I should have worded the "student of my choosing" part better. What I was meaning to say is that I would like to have my own input (at least some) and that of others in the decision making, whether in a group meeting of the faculty, small scholarship board, etc. It would never be that I just pick a name or person on my own with no supporting data/input. There would likely be only about 5-10 students as qualified applicants at most per year (class size is 80-100, and only about 30% go to a 4 year institution).
My concern (from my own experience) is that the school tries to be "fair" and give scholarships to everyone, and I am worried that my donation wouldn't go to the most qualified individual(s) or for what I had intended. Also the school would give out and collect the applications, verify gpa & other requirements, and present the awards; and the money would go directly from me to the university (second semester) towards the students tuition balance, and never in the students hands.
Orignal From: Tax Benefits for Giving a High School Scholarship?
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