The Advisor’s Guide to Scholarships

Many clients with a desire to give back have a passion for education — seeing academics as the “great equalizer.” A well-designed scholarship fund matches that passion with impact 

To help your clients share the gift of education, we’ve outlined best practices that make scholarship giving effective and essential guardrails that help avoid disappointing pitfalls.

Four Considerations for High-Impact Scholarship Funds

While every donor’s vision is unique, data from our scholarship program shows that these four standards can maximize both student success and fund sustainability.

1. Minimum Upfront Investment

To create an endowed fund that supports students in perpetuity and generates enough annual funding* to make a meaningful award, we require a minimum initial gift of $50,000.

2. Renewable Scholarships vs. One-Time Awards

One-time scholarships are vital for college access, often providing the initial spark that allows a student to enroll. However, getting a degree is many students’ true goal. To help scholarship recipients reach the finish line, a renewable scholarship model is the gold standard. For example, a fund established with $200,000 is estimated to support* a $10,000 scholarship award to a new student every year (each award would be paid out in four annual installments of $2,500). This sustained commitment significantly increases retention rates by allowing students to plan their entire four-year journey with confidence.

3. Picking the Right Award Size

In today’s educational landscape, an annual award of $2,500 to $5,000 is often the “tipping point” that helps a student choose a four-year institution over a shorter-term alternative or reduces the need for high-interest private loans.

4. Planning for the Future Cost of Education

The educational landscape is shifting. With higher education costs projected to rise steadily over the next 25 years, a student entering a public university in the mid 2040s could face annual tuition and fees exceeding $24,000. By encouraging clients to establish endowed, renewable funds today, you help them create a reliable inflation hedge for the leaders of tomorrow.

*The level of spendable income is set at 5% of the 20-quarter rolling average market value of the endowment funds. Spendable income includes interest, dividends, and appreciation. Our Spending Policy adjusts for unusual market fluctuations, thereby giving predictability to future distributions.

Scholarship Eligibility: Maximizing Impact Through Flexibility

One of the most valuable pieces of advice you can offer a client is to keep eligibility requirements broad. Each year, we see hundreds of outstanding applicants who don’t qualify for support because the eligibility criteria for available scholarships is overly narrow.

This can be counterintuitive, but broad eligibility requirements increase the likelihood of a donor’s gift having the impact they truly desire. While specific requirements reflect a donor’s passion, they often create unintended barriers. Take an example that seems harmless, like a scholarship “for students pursuing a mechanical engineering degree.” Right off the bat, this language excludes a large number of students who enter college undecided or change majors.

Restrictive rules can result in scholarships that don’t get many — or don’t get any — applications. We know that funds going unspent while deserving students miss out on critical support isn’t what donors hoped for when setting up their scholarship.

Awards with the fewest restrictions are consistently the most successful, so we encourage clients to remain open and focus on their high-level goals for the gift. From there, we can work together to share details on best practices and high need areas in our region, ensuring their generosity reaches the students who need it most.

To honor donors’ passions while ensuring dollars are awarded as intended, consider these eligibility strategies:

• Prioritize broad fields of study: Use “healthcare” instead of “nursing” or “STEM” instead of “mechanical engineering” to capture a wider pool of talent.
• Focus on aspirations over degrees: Target students committed to “public service” or “community leadership” rather than a specific major like political science.
• Spell out preferences rather than requirements: Frame specific interests as a preference (e.g., “preference given to education majors”) so the committee can still award the scholarship if no one in that specific major applies.
• Anticipate change: Include provisions that allow criteria to adapt if academic programs or community needs change.

By removing these barriers, donors ensure their scholarships consistently reach deserving students and remain relevant for generations. 

Four Different Types of Scholarship Giving

1. Create a new scholarship fund yourself, or with friends, to benefit students with the high-level interests or educational pursuits you are passionate about.
2. Give to an existing fund like our Community Scholarship Fund.
3. Create a designated fund that provides annual scholarship award funds to a specific educational institution.
4. Establish a scholarship fund upon your passing through your will or a beneficiary designation on a retirement account.

If establishing a new fund is not the right fit, clients can contribute to an existing scholarship fund that aligns with their interests and values. This allows them to support causes they care about while leveraging an already active and impactful fund structure. 

Beyond accessibility, funds like our Community Scholarship Fund are often the least restrictive, allowing the Foundation to remain nimble as the educational landscape and community needs change over time. By contributing to a collective fund, clients ensure their generosity joins with others to provide significant, life-changing support that adapts to the highest-need areas in our region. 

How We Partner with Advisors

We handle the heavy lifting, from promoting scholarship opportunities, accepting applications, verifying students’ eligibility, and processing scholarship payments. We can also set up designated scholarship funds which provide annual payments to the educational institution(s) of their choice, within the US. Our options allow your clients to experience the “joy of giving” while you ensure the gift is integrated seamlessly into their broader financial or estate plan. 

Scholarship Tips for Advisors:  

Scholarships are an excellent vehicle for Qualified Charitable Distributions (QCDs) or for clients looking to offset a significant tax event, such as the sale of a business or real estate. 

We can join you as a resource at meetings with your client, maximizing their time and yours at no additional cost. 

Our fund options provide flexibility for your client: 

• Traditional Scholarship Fund
  • Minimum: $50,000  
  • Flexible criteria; managed by our scholarship team  
• Designated Scholarship Funds  
  • Minimum: $25,000  
  • Provide annual award funds to specific institution(s)  
• Community Scholarship Fund  
  • No minimum to contribute  
  • Broadest reach; supports highest-need students annually 

Ready to start the conversation?

Contact Kara Dwyer at kdwyer@racf.org or 585-341-4408 to schedule a joint meeting with your client.

Want to read more about how scholarships are expanding possibilities in our community?

Read about single parents going back to school with the Do It 4 Ur Kidz Scholarship and students like Camilo Martínez, a graduate of East High School in Rochester, who applied to more than 60 scholarship opportunities through one application.