Scholarship questions

[kibba]

My understanding is that once a foster child is adopted they lose allot of benefits that the city/state offers. I know from reading that many teenagers want to be adopted and to have that permanent feeling of having a family. I'm wanting to start a scholarship to offer to these teenagers to be used towards college, but want to find out more facts about the system in general and how it works when people are given a scholarships. Also how do I give the money out? Do I write a check directly to the college? How do I guarantee the money is going to the college and not into anyones pocket. Also how would I determine WHO gets the money? I was thinking an essay but hate for kids to have to get so personal about their life. Also how would I get the word out, a website? Last question...how much in general are scholarships? I know they probably vary but I'm guessing there's a general amount. Any advice/help would be greatly appreciated.

[Roar]

My suggestion would be to work with an existing program that has already researched what is needed and knows what would be most helpful. This would be a place to start: http://orphan.org/what-we-do/scholarships-and-grants/ Note with a donation of $2,500 or more you can name a scholarship after your family. 100% of the money goes directly to student scholarships. http://orphan.org/what-you-can-do/

[MeepyCat]

While teenagers who are adopted may miss out on benefits offered by the social welfare system, I doubt that they feel that they're losing.
1. Very few children are adopted as teens. Those that are have the resources of their new families to draw on.
2. The resources of the social welfare system for ex-foster kids who have aged out of the system are *terrible*.

There isn't a general amount for scholarships. I've seen scholarships as small as $50, and as large as full tuition, plus room and board at a top tier private university, plus a personal stipend. How much is up to the organization granting them - and if you want to do this, I strongly suggest starting a registered non-profit. Otherwise, it's just you giving gifts to selected strangers, it may have gift tax implications (depending on how you do it), and you don't get a tax deduction.

Also, if the scholarships are granted by an independent entity, that entity can be given money or other assets in your Will, and can continue to fund scholarships after you die. This may seem like long-term thinking, but if it's just you, and you get hit by a tomato truck, some poor kid who was relying on your money may very well not get it.

Alternatively, as suggested, you could work with an existing organization. That would take a lot of work and worry off of your hands.

Different scholarships work different ways. Some scholarships are given as personal checks written directly to the student - the logic there is that money charged by the school isn't the only cost of an education. A scholarship can help a student buy books and supplies, cover living expenses (so that they can work less and have more time to focus on their schoolwork), get tutoring, or pursue educational opportunities like attending a conference in another city, or spending time in a foreign country learning the language.

Other scholarships are paid directly to the school, on behalf of the student.

If you do this, how it's done is up to you. However, please be aware that if you, as an individual, write a check to pay someone's tuition directly to the school, then you don't have to pay gift taxes on the transfer. If you write the check to the student, depending on how much you give, there may be gift tax implications.

In terms of selecting students: essays need not be about the student's life. They can be about the student's plans. They can be about the student's favorite television show. Either get some personal information (via interviews or essays or what you will) or pick names out of a hat. Up to you.

[kibba]

Thank you for the valuable information!! As much as I would love to hand the money over to someone I am looking forward to this journey of finding out more information and helping. I'm thinking in regards to about 6,000 so prefer to handle it myself then give that money to an organization.

[MeepyCat]

Kibba, I cannot say enough that if you intend to do this, you should start a non-profit organization of your own. Talk to an accountant, and set the thing up so that you donate the funds to the organization. You can be in charge of the organization, and decide yourself who gets the money - the organization can be, basically, all you. But starting an "organization" - even a small one - and registering it as a non-profit with the appropriate authorities, will make it possible for you to get tax deductions and avoid gift tax implications. It's worth doing.