The process to start a scholarship seems daunting, but it is pretty straightforward as long as you follow the seven steps outlined below.

Following the steps below is an easy way to start a scholarship and ensure no critical steps are missed in the process. People who try to start a scholarship by themselves often miss a step or two in the process and end up creating more work for themselves in the long run.  

1. Determine the Budget

Starting a scholarship isn’t as easy as awarding a scholar money. In addition to the money being awarded to the recipient, there are behind-the-scenes administrative costs people who want to start a scholarship need to consider.  

Other costs associated with starting a scholarship include:

  • Setting up the program
  • Tracking applicants
  • Keeping track of recipients 
  • Promoting the scholarship
  • Marketing to donors

The final thing to consider when figuring out the budget is whether to manage the scholarship yourself or enlist the services of a scholarship management software like Scholar’s App.

A scholarship management system helps manage everything associated with the scholarship being started, including the administrative work.

Using a scholarship management service removes many barriers and confusion from starting a scholarship, especially if it is a person’s first time starting a scholarship.  

2. Find Funding

Now that the budget is set, it is time to find money to fund the scholarship.  

Common ways to fund a scholarship include:

  • Setting up a trust
  • Creating a non-profit organization
  • Using personal funds

It is essential for everybody starting a scholarship to speak to a tax expert and seek advice on the best way to fund the scholarship. Each funding option has different tax implications, and only a tax expert can help people determine the right way to fund their scholarships.  

3. Determine Who the Scholarship Helps

58% of American families use scholarships to help pay for college. A scholarship helps people avoid massive amounts of student loan debt.   

When starting a scholarship, it is essential to determine who your scholarship is going to help. Each scholarship needs to set guidelines on who is eligible and how the recipient will be chosen. 

Scholarships are commonly awarded to recipients based on one of the following criteria:

  • Academic standing
  • Financial need
  • Athletic ability
  • Creative content
  • Skills
  • Area of study
  • Philanthropic endeavors 

The criteria used to award a scholarship must be non-discriminatory and broad enough to be considered a charitable class.  

There are government rules and guidelines for scholarship criteria. Anybody setting up a new scholarship should review state and federal guidelines to ensure their scholarship is legal and meets every requirement. 

4. Define the Parameters

Once you have determined who the scholarship is intended to help, it is time to define the parameters of the scholarship.  

This includes deciding on eligibility requirements based on who the scholarship is designed to help, when and how often the scholarship will be administered, and how many recipients will receive an award.  

It can be challenging to figure out what parameters to add to a scholarship. Using a scholarship management service can make it easier.  Scholar’s App is a service that helps scholarship donors set parameters that fit their scholarships. 

5. Promote the Scholarship

It is common to think that it is easy to find scholars to award money once a scholarship is created. 

However, there are countless scholarships available to students, and a scholarship has to be appropriately marketed to find the perfect recipient.  

The three best ways to promote a scholarship are:

  • Word of mouth
  • Digital marketing
  • Scholarship management system

Using a scholarship management system like Scholar’s App helps connect qualified candidates with scholarships. A scholarship management system serves as an online directory for scholarships and is a means for collecting, sorting, and reviewing applicants. 

It makes it easier for students to find scholarships they qualify for and helps scholarship providers market their scholarships and find the best applicants. 

6. Select Winners

Selecting a winner is one of the most exciting parts of starting a scholarship. Still, it isn’t easy to have an unbiased review process

It is essential that the selection committee uses the same rubric and criteria for every applicant and that consistency exists amongst the selection committee.  

A scholarship management service takes a lot of the implicit bias out of the review process. To help in the selection process, a scholarship management service can:

  • Randomize assignments
  • Remove applicant information and make them anonymous
  • Compile peer review comments
  • Keep all applicants and relevant information on one easy to use platform

7. Award the Scholarship

The final step is to award the scholarship to the applicant selected. As part of the scholarship creation process, it would have been decided how the funds are disbursed: directly to the student or the school.  

No matter how the funds are disbursed, it is important to state how the recipient can use them. A scholarship is typically awarded to help with tuition expenses. Still, sometimes recipients are allowed to pay for part of their living expenses with the scholarship.  


Starting a scholarship is easy once people understand the process they have to go through. It is better to follow each step and create the scholarship the right way without learning from mistakes first. 

It can be a lot of work to start a scholarship, but using a scholarship management service eliminates the time-consuming tasks and helps connect the best applicants with the scholarship.

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