With the help of a college or community foundation, you can establish a scholarship in the name of a loved one to help students in perpetuity. Getty Images By Kimberly Lankford, Contributing Editor May 25, 2018 Editor's Note: This column, originally published in 2018, remains a useful guide to establishing or contributing to a scholarship fund to honor a hero in your life. We like to share this resource with our readers on Memorial Day and encourage you to do the same. QMy family would like to establish an engineering scholarship in memory of my late uncle, who was an engineer and a veteran of World War II. How do we set up a scholarship, and how much do we need to contribute?AYou can set up a scholarship directly with a college or through a charitable organization, such as a community foundation. Either can award the scholarship to students who meet general criteria you specify, such as local engineering students. You'll generally need to contribute at least $25,000 or $50,000 to set up an endowed scholarship, which will provide an award every year in the future. "That can be a wonderful way to leave a lasting legacy," says Tod Pritchard, of the Wisconsin Foundation & Alumni Association. Or you may be able to contribute a smaller amount and provide scholarships for a few years. Sponsored Content SEE ALSO: 20 Things You Need to Know About Getting Into a Military Service Academy It's usually easiest to work directly with a college. Contact the development department to find out about its minimum contribution requirements, how many of the criteria you can specify and details that might make the biggest impact. At the University of Wisconsin-Madison, for example, you need to contribute at least $25,000 to endow a scholarship, but you can spread that payment over several years. An endowment of that size would only pay out a small amount every year (about $1,125), but an endowment of $125,000 would create an annual scholarship of about $5,600 in perpetuity. "That scholarship would cover half of a student's in-state tuition costs each year, which is a tremendous gift to UW's promising students who have financial need," says Pritchard. Advertisement At the University of Wisconsin, donors may specify many award criteria, such as a field of study, geographic area and other possibilities. "In some cases, we encourage donors to limit the number of criteria for a scholarship to ensure that there will be a large enough pool of students who meet those criteria," Pritchard says. Sometimes, for example, donors will consider awarding based on financial need alone. At San Diego State University, you need to contribute at least $50,000 to set up a scholarship that will last in perpetuity. Or you can set up a scholarship named for your uncle that will pay out over several years with a commitment of at least $5,000 per year over five years. Scholarships at SDSU need to support University-approved scholarship priorities, which include merit, financial need, leadership and international study. The donor can recommend the award value, number of awards, minimum grade-point average, academic major and class level. For example, you could set up a scholarship named for your uncle to be awarded to engineering students. Another option is to work with a community foundation to set up a scholarship that isn't tied to a particular school. For example, the scholarship can aid local high school graduates who plan to study engineering in college. See the Community Foundation Locator to find one in your area. Some community foundations have more experience than others with managing scholarship funds. Ask about how the scholarship will be advertised, how the recipient will be selected and how the money will be managed. The Arizona Community Foundation, for instance, manages many memorial scholarships. You need to contribute at least $50,000 to set one up. The money could be awarded over several years, or a scholarship amounting to 4.25% of the total endowment could be given out annually in perpetuity. You can set the award criteria for the scholarship yourself, or you could contribute to an existing scholarship fund. "Donors should check with community foundations and colleges to see if a fund is already established for a particular group, such as veterans or first responders, that they may contribute to," says Jennifer Foley, of the Arizona Community Foundation. "This can be done in memory of a loved one but would not result in a named fund or be subject to annual minimum balances or fees." Advertisement You may also be able to set up a scholarship fund or support educational programs through a charity that specializes in helping veterans and their families. Check out the charity first; some are much more effective than others. See Charity Navigator's list of highly rated charities that support veterans and active duty service members, including charities specializing in wounded troops' services, military social services and military family support. You can also look up charities at www.give.org and www.guidestar.org. If you have a donor-advised fund, you may have access to additional resources to check out charities. You can give money from a donor-advised fund to a charitable organization to set up a scholarship. This can be a good way to build up the funds to meet the minimum funding requirements of a college or organization. (Whether you use a donor-advised fund or donate directly to a college or foundation, you will get a tax deduction if you itemize.) For more information, see Fidelity Charitable's Funding Education guide for supporting scholarships through a donor-advised fund. For more information about donor-advised funds, see Charitable Giving Can Begin at Home With a Donor-Advised Fund. Another option is to donate to a military emergency relief fund that provides financial support for service members and their families and helps with educational expenses, too. Army Emergency Relief, for example, provides scholarships to military spouses and children, in addition to other financial assistance. Each branch of the military has an emergency relief fund or aid society (see the Air Force Aid Society, the Navy-Marine Corps Relief Society and Coast Guard Mutual Assistance to find out more about making a donation in memory of your uncle). For more information about the new rules and strategies for charitable tax breaks, see Charitable Giving Under the New Tax Law. SEE ALSO: 10 Best Financial Benefits for Military Families Got a question? Ask Kim at firstname.lastname@example.org.