Alternate Scholarship Funds
1. Current-Use Scholarship Fund
If you are new to sponsoring a scholarship, a current use scholarship may suite you well.
As a Sponsor you allow donors give money for a scholarship, and the Education Network Society awards those funds during the same year or within a defined scholarship cycle. The fund is restricted for scholarships, but it is not permanent like an endowment.
Best for: A new sponsor that wants to show immediate impact.
Example:
ENS raises $50,000 in 2026 and awards $40,000 in scholarships, keeping $10,000 for program costs, reserves, and the next award cycle.
2. Scholarship Reserve Fund
This is a middle ground between a current-use fund and an endowment. The organization keeps a reserve, such as 6–24 months of expected scholarship awards, but the money is not legally locked up forever.
Best for: Stability without restricting the sponsor or the organization too much.
Example:
ENS keeps $25,000 in a scholarship reserve so it can continue awarding scholarships even if donations slow down.
3. Endowment Scholarship Fund
A endowment scholarship fund is a permanent, donor-restricted fund where the sponsor-donor gives money to Education Network Society with instructions that the original gift — often called the principal, corpus, or endowment principal — must be invested and preserved long-term. ENS may only spend the amount allowed under the sponsor-donor agreement, investment policy, and applicable endowment law, which is a percentage of the fund or investment earnings. A true endowment is different from the board-created reserve or quasi-endowment because the restriction comes from the sponsor-donor, not just the ENS board.
Example:
A donor gives Education Network Society, Inc. $500,000 and signs an endowment gift agreement stating:
“This gift shall establish the Education Network Society Permanent Scholarship Endowment Fund. The principal shall be held and invested in perpetuity. Annual distributions from the fund shall be used only to provide scholarships to eligible students selected under the organization’s approved scholarship policy.”
The ENS invests the $500,000. The board follows its spending policy allowing 4% per year to be used for scholarships.
So in the first year:
Endowment principal: $500,000
Annual spending rate: 4%
Amount available for scholarships: $20,000
Principal preserved: $500,000 remains invested
ENS would then award, for example:
4 scholarships of $5,000 each, or
10 scholarships of $2,000 each
4. Board-Designated Quasi-Endowment
A quasi-endowment is money the board chooses to invest for long-term support, but unlike a true endowment, the board can later vote to use principal if needed.
Best for: ENS when it wants investment income but does not want the restrictions of a permanent endowment.
This is ENS’ initial fund prior to the the true endowment to allow the board flexibility.
5. Sponsored Scholarship Fund
A donor, business, family, church, or civic group funds a named scholarship, but Education Network Society controls the application, selection, award process, and compliance.
Best for: Attracting donors who want naming recognition, no administrative overhead, scholarship design services, and skilled expertise.
Example:
“The Smith Family First-Generation College Scholarship” is funded by the Smith family, but Education Network Society uses its own neutral selection committee and objective criteria.
This is important because scholarship awards should be made using objective, nondiscriminatory standards and should not privately benefit insiders or predetermined individuals. The IRS states that 501(c)(3) organizations must operate for exempt purposes and cannot be operated for private interests or allow net earnings to inure to private individuals.
6. Donor-Advised Scholarship Support
As a Sponsor and donor, you can place money in a donor-advised fund and recommend grants to the Education Network Society, who will then runs the scholarship program. Sponsors/donors do not control who receives the scholarship.
Best for: Sponsors who already have donor-advised funds or want an immediate charitable deduction while supporting your scholarship program over time.
Education Network Society Endowment Structure
1. Our Main Operating Scholarship Fund
A current-use restricted fund for annual scholarships.
2. A Scholarship Reserve Fund
A board-approved reserve to protect future scholarship cycles.
3. Named Sponsored Scholarship Program
We allow donors and companies to sponsor named scholarships, but require all awards to go through our independent scholarship policy and selection committee.
4. A Projected Quasi-Endowment
Once annual donations become consistent, the board will create a board-designated quasi-endowment for long-term growth.
5. A Future True Endowment Once the Quasi-Endowment reach a board specific funding goal, the board will create a true endowment for permanent growth.
