How Foundations Can Create Meaningful, Mission-Driven Scholarships

---

For a student looking to take the next step in their education and career journey, a scholarship can be a truly life-changing intervention.

According to the most recent Sallie Mae/Ipsos How America Pays for College survey, 61% of students received some kind of scholarship in 2025-2026, with an average award of $8,291; scholarships and grants covered approximately 27% of total college costs for undergraduate families.

But scholarships are much more than just a financial award. A scholarship can be a catalyst for opportunity, providing a path to a brighter future and making a long-term impact on students, families and the workforce.

And scholarships aren’t just for “traditional” students going from high school to a four-year college. Increasingly, scholarship funders are investing in two-year and technical college students, adults returning to higher education, skilled trade workers, registered apprentices and white-collar workers seeking upskilling and certification.

Scholarships, particularly those open to a wide variety of students and institutions, are a powerful and flexible way to invest in individual potential. More than that, as private foundations work toward measurable, impactful change in their communities, a scholarship program is an important complement to broader social impact work—if it’s designed as part of your overall mission.

Starting with the Change
Foundations are uniquely positioned to create meaningful scholarships, because the best programs don’t exist on their own. Instead, scholarships should be part of a broader philanthropic vision that addresses change beyond “I want to help kids go to college.”

To establish a scholarship with identity, intention and impact, start with a wider question: “What is the change that we’re trying to make, and how can educating students help us make it?” By starting with an ambitious social goal in mind, you can work toward a scholarship program that provides benefits far beyond financial aid.

As an example, Cincinnati’s Charles L. Shor Foundation focuses on providing quality-of-life improvements for people living with epilepsy. When they decided to fund a scholarship, they worked with Scholarship America to ensure their program would meet the unique needs of students with epilepsy, and that it would become the foundation of a support system to help them address challenges beyond tuition.

At the Chicago Community Trust, funding from Cboe Global Markets led to the creation of the Cboe Empowers Fund, designed to help students from underserved communities pursue their potential. Cboe Empowers is a long-term community engagement program, providing mentorship, internships, scholarship support and unique career exposure opportunities to students starting in fifth grade; the renewable, full-ride Cboe Empowers scholarship is an integral component to this mission.

In both cases, the scholarship wasn’t established as an end in itself, but as part of a vision for community support and positive change.

Focus on Your Vision, Then Consider the Details
Of course, once a foundation has its “why” for establishing a scholarship, the hard work of the “how” begins.

First and foremost, it’s crucial to create a program that meets IRS standards. If your foundation is involved in the selection of recipients, IRS pre-approval is required to ensure:

• A selection process that is objective and nondiscriminatory;
• A large selection pool of potentially eligible individuals known as a “broad charitable class;”
• Selection criteria that aligns directly with the charitable purpose of the scholarship program; and
• Systems to monitor recipients’ use of the funds and the progress made toward achieving the grant purpose.

Beyond regulatory and compliance questions, impactful scholarship design then considers a handful of design questions that determine whether a scholarship actually delivers on its mission over time. Ask yourself, or a partner like Foundation Source or Scholarship America:

• What is the program budget, and how does it map to the number and size of awards? The same budget can become one or two large awards, or a number of smaller ones—what works best for the students you’re trying to impact, and the size of the applicant pool? (And don’t forget, there are costs beyond just the award check.)
• How will recipients be selected and notified? If your foundation is handling evaluation, strict IRS rules apply; if you’re working with a third-party administrator, it takes time to communicate your priorities and connect with your awardees.
• What is the timing of key activities, from application to award? You’re busy, and so are students. Make sure your program works with your schedule and theirs.
• How will awards be distributed? Electronic payments are faster, easier and more secure than paper checks, but also require more setup and bandwidth.
• What eligibility criteria reflect the foundation’s vision? This is a direct application of your “why”—knowing the change you want to see, who are the students who can make it happen with your support?
• What support, if any, extends beyond the award itself? The more you can incorporate mentorship, career preparation or internship opportunities, the more effective your program will be.
• How will the program be marketed and communicated? Getting the word out isn’t always easy, especially if you’re trying to reach audiences outside your community or beyond the “traditional” student profile.
• Will awards be renewable, and under what terms? Multiple-year scholarships make a huge impact on student persistence, but they also require more tracking and follow-up work.

Depending on the size of your foundation and the scope of your scholarships, answering these questions and managing the day-to-day work of the program can be a full-time job. The Pittsburgh Foundation turned to Scholarship America for the administration of their portfolio of more than 100 scholarship awards; corporate sponsors like the United Health Foundation and PepsiCo Foundation have done the same.

Making a Generational Impact
Regardless of the solution that works for your foundation, a scholarship program can be a multi-generational contributor to your mission and vision.

Uniquely, scholarships create opportunities for individuals at one of the most formative moments in their lives. They remove barriers, expand access to education and training, and help members of your community pursue futures that might otherwise remain beyond reach. The impact of that investment can change the trajectory of a student’s life—and it extends well beyond the individual recipient.

Higher educational attainment, at any age, is closely linked to greater economic mobility, stronger workforce participation, increased civic engagement, and healthier communities. Scholarship recipients become mentors, supporters and investors. And the feedback loop created by their success means more progress toward your foundation’s mission.

You can learn more at scholarshipamerica.org.

Want to contribute to our Outside Perspectives Series and share your philanthropic insights?
Write to us at  for a chance to be featured in an upcoming blog!

Want to learn more about the ways we support donors, advisors and nonprofits?
Our philanthropic specialists are here to help! To learn more, schedule a call with us or reach us at 800-839-0054. Together, let’s #begiving.

 

About Scholarship America
Scholarship America is a non-profit organization that eliminates barriers to educational success so that students can pursue their dreams. Since 1958, Scholarship America has distributed $6 billion to more than 3.5 million students.

The organization’s partners include nearly half of the Fortune 500, and 40 of America’s 50 largest companies. On behalf of our corporate, foundation and individual sponsors, Scholarship America administers academic, workforce, upskilling, emergency aid and other scholarship supports that students need to succeed.  Learn more at scholarshipamerica.org.