Guide for Establishing an Endowed Scholarship
The following are step-by-step instructions for establishing an ECE endowed scholarship fund at the University of Maine Foundation. An endowed scholarship fund is different from a regular scholarship fund in that, usually, only the interest from the fund is used to achieve the donor’s objectives. A portion of the fund income is retained to build or maintain the fund. Although $3,000 is necessary to establish a named fund, the Foundation suggests that scholarship funds be built to $10,000 to produce an annual scholarship of roughly $500. The Foundation distributes 5.75% of the fund’s income to the Department for the purposes designated in a fund description. In today’s market, fund are earning significantly more than 5.75%. Nearly all the difference between the 5.75% payout and the actual fund’s earnings is returned to the fund to grow the fund’s principal. A sample fund description is given below. Note that this income may be used for a variety of purposes, ranging from awarding scholarships to providing funds for student projects.
- Determine if there is an existing fund that will serve your purpose. Contributing to an existing fund increases its capacity to support students but does not provide name recognition and may not represent the specific conditions you want to apply.
- Determine the amount and conditions of the fund. Conditions might include:
- minimum grade point average
- class level (i.e. first year, sophomore, junior, senior)
- financial need
- area of interest
- whether a co-op assignment accompanies the award
- for student project purposes
- Draft a fund description. The Foundation endeavors to work with the Dean, the Chair, and the donor to develop a fund description which truly meets the donor’s interest. Funds can be fully endowed or “quasi-endowed”. The prinicipal of a quasi-endowed fund may be paid out, along with the fund’s interest income. The following is a possible template for a quasi-endowed fund:XYZ SYSTEMS, INC. QUASI-ENDOWMENT FUND
The (XYZ Systems, Inc.) Quasi-Endowment Fund was established at the University of Maine Foundation in 1999 for the benefit of the University of Maine, Orono, Maine with a gift from XYZ Systems, Inc. at the direction of (its Vice President, John Doe, a member of the Class of 19xx).
The fund shall be used at the discretion of the Chair of the Department of Electrical and Computer Engineering to provide support for student projects or to provide scholarship assistance for undergraduate students attending the University of Maine and majoring in Electrical and Computer Engineering. If the fund is used for the support of student projects, the Chair of the Electrical and Computer Engineering Department shall administer the project funds.
If the fund is used for scholarship aid, the recipients shall maintain good academic standing, and a preference will be given to those students who demonstrate an interest in studying (subject area). The Chair of the Electrical and Computer Engineering Department and a committee of ECE faculty will make selection of the recipients in consultation with the Office of Student Financial Aid. The Office of Student Financial Aid shall administer the income from the Fund.
Should it ever become impossible or impractical to carry out the purposes of this fund as described above, an alternative purpose which best fits the donor’s intent and wishes shall be designated by the Chair of the Electrical and Computer Engineering Department in consultation with the Board of Directors of the University of Maine Foundation.
XYZ Systems, Inc.
- You should address questions, request more information, and forward the endowed scholarship fund check to:
University of Maine Foundation
80 Exchange Street/ Fleet Center
PO Box 2220
Bangor, Maine 04402-2220
tel. 800/982-8503 | 207/947-5100 | 207/947-6193 fax
In the letter you should state your intent, (i.e. establish an endowment fund to etc.) The Foundation will send a receipt for income tax charitable deduction purposes as soon as the check is received. The check must be made out to: “University of Maine Foundation”.
It’s possible to give funds through either current or deferred giving vehicles. The Foundation can help you explore any of the following gift options:
- Cash Gifts
- Appreciated Securities
- Charitable Gift Annuity
- Real Estate
- Tangible Personal Property
- Pooled Life Income Funds-Life Income Plan
- Charitable Lead Trust
- Charitable Remainder Trusts-Life Income Plan
- Life Insurance Endowment Program
- Gifts of Closely-Held Stock
For more information about these alternatives and the University of Maine Foundation, please access their web page at: www.umainefoundation.org