For many years I have dreamed of doing something to help students find a better way to pay for college.
The short-comings of federal grants, the rising cost of tuition, and the prevalence of student loans have made it very apparent that something more needs to be done.
Scholarships are one of the most powerful sources of financial aid. They are “free money” that are not required to be repaid. They are also funded and sponsored by an organization that takes a personal interest in the students they support. Often there are award ceremonies, follow up letters, and personal involvement between the donor and the recipient.
This interaction is very powerful in the life of a student, and can be instrumental to their success. Having the backing of an involved scholarship organization often gives students the extra drive that they need to be successful.
With that in mind, my goal is to start a non-profit scholarship organization focused on rewarding college students for excellent in personal finance.
Scholarship Money = Powerful Motivators
Money is one of the most powerful motivators for college students. They need money to go to school, to put gas in their vehicles, to eat out, to eat at all, to take a girl out on a date, to buy textbooks, or to do just about anything else on campus.
By harnessing this powerful motivator, and linking it with personal financial and financial literacy, I will be able to reward students for their personal finance prowess, and encourage them to retain it as a life skill.
Awarding the scholarships and hearing about the success stories is the fun part, and my ultimate goal, but I have a long road before I can get to that point.
Creating my Non-Profit Scholarship Company
Before I get too far ahead, let me be clear. I have not filed any paperwork yet. My non-profit is not official. It is very much in the planning stages.
There is a lot involved with starting a non-profit organization, as I am finding out.
Formulate a Mission Statement
The first step to creating a nonprofit company is to create a mission statement. This is often just the official slogan that explains the idea you have in your head. For example, a sample mission statement for my scholarship organization might be [box] “To provide scholarships to deserving students who demonstrate financial need, and a desire and proficiency to apply personal finance principles in their daily lives. Our organization is dedicated to helping students succeed by providing them with financial benefits to ease the rising cost of a college degree”.[/box] This mission statement will guide the rest of the formation steps of your non-profit organization.
Form a Board of Directors
Your non-profit will not be successful unless it has quality leadership. Even if you plan to remain a very small organization, the quality of your leadership will determine the overall success of your organization and it’s ability to reach and exceed goals. You should seek out a board of directors that has experience in the market or genre that your non-profit is being established in.
In my non-profit, I will likely look for people who have experience in higher education, or in personal finance. I might seek out financial aid professionals, higher education administrators, or possibly even personal finance bloggers (want to be on my board of directors???). The quality of your leadership will determine the quality of your vision and execution, and therefore the overall success of your organization.
- File Articles of Incorporation with State Secretary
- Write the Bylaws
- Apply for Non-Profit status with the IRS
- Apply for State Tax Exempt Status
Once you have started the vision for your non-profit and found your leadership, you will need to satisfy all of the legal requirements of a non-profit, and begin taking real steps towards making your non-profit a reality. You will first need to file Articles of Incorporation within your state. This is your formal introduction as a company, and will let your state, and the world, know that you exist.
Next, you will need to write the bylaws of your non-profit. Your bylaws are the guiding rules of your organization. They will cover things like who will lead the organization on a daily basis. How many employees will you have and how will they be hired. How will the salaries be determined and where will the money come from.
Next comes applying for non-profit and tax exempt status from both the IRS and your state’s tax revenue agency. This is a crucial step as one of the main benefits of a non-profit is your tax exempt status. This allows you to pour all of your profits towards reaching the goals that you have set for your organization in the mission statement.
Take the First Step
Organizing a non-profit company or organization is not an overnight process. There are obviously lots of steps involved, and it can be a fairly lengthy process.
As with moth major projects, it helps to have a game plan to begin. That is why creating a mission statement should be your critical first step. It serves to give you a road map of where you want your non-profit to end up, and it also gives you motivation to see it through to completion.
As I work to finalize my mission statement, I would love to hear if anyone else is involved with a non-profit company!